In your first concern about marketplaces performing in dual-mode, you mention that these platform owners obtain user data to compete with other 3P sellers on the platform.
In my perspective, these marketplaces create brands ("Amazon Basics") and leverage user data to increase their offerings on the platform, creating a better shopping experience; in other words, they use data to improve their service/product. This results in more customers.
Can we consider this as a "data network effect"? If not, why? They can even use algorithms to analyze customer (buyer) preferences through image recognition and offer the most preferred products/types under their own brand.
Having built my entire career as a 3rd party Amazon seller, I can tell you these “harms” of self-preferencing and third-party data are NOT major concerns of 3rd party sellers.
The very nature of a dual marketplace such as Amazon is to create a more honest and fair marketplace and shopping experience for customers by enabling the widest variety of competition as possible. Enacting these new regulations would undoubtedly force Amazon to remove 3rd party sellers from their marketplace and themselves attempt to become the sole seller of millions of diverse products which are sourced from all over the world. The inevitable ramifications of this would be:
- Complete monopolization of the biggest marketplace in the world, leading to unfair & subjective prices since there is no competition.
- An astronomical decrease in product options and product differentiation, leading to severely limited options for customers and a significant decrease in product quality since there is no influential reason to improve.
It’s hysterical how blatantly counterproductive these proposed “anti monopolies” and “anti trust” regulations would be—but I forget there are some really stupid people in this world who don’t have a lick of experience building and running a business but want to tell everyone else how to do it.
The not so hysterical part is that if these proposed laws go through, it will obliterate countless individual’s and family’s well-being who spent hundreds and thousands of hours building their businesses and careers as a 3rd party seller just to have it all ripped out from under our feet…and done so by ignorant, small minded people who are so ridiculously disconnected from the very issues they’re trying to solve.
Thanks for the long note, Chad. We tend to agree that the currently proposed "anti monopoly" policy proposals aimed at dual marketplaces like Amazon do not make much sense. In fact, I think there is already some evidence from India that banning the dual mode is not working out great for consumers.
Hello Sir,
Great paper. I have one question, though.
In your first concern about marketplaces performing in dual-mode, you mention that these platform owners obtain user data to compete with other 3P sellers on the platform.
In my perspective, these marketplaces create brands ("Amazon Basics") and leverage user data to increase their offerings on the platform, creating a better shopping experience; in other words, they use data to improve their service/product. This results in more customers.
Can we consider this as a "data network effect"? If not, why? They can even use algorithms to analyze customer (buyer) preferences through image recognition and offer the most preferred products/types under their own brand.
Having built my entire career as a 3rd party Amazon seller, I can tell you these “harms” of self-preferencing and third-party data are NOT major concerns of 3rd party sellers.
The very nature of a dual marketplace such as Amazon is to create a more honest and fair marketplace and shopping experience for customers by enabling the widest variety of competition as possible. Enacting these new regulations would undoubtedly force Amazon to remove 3rd party sellers from their marketplace and themselves attempt to become the sole seller of millions of diverse products which are sourced from all over the world. The inevitable ramifications of this would be:
- Complete monopolization of the biggest marketplace in the world, leading to unfair & subjective prices since there is no competition.
- An astronomical decrease in product options and product differentiation, leading to severely limited options for customers and a significant decrease in product quality since there is no influential reason to improve.
It’s hysterical how blatantly counterproductive these proposed “anti monopolies” and “anti trust” regulations would be—but I forget there are some really stupid people in this world who don’t have a lick of experience building and running a business but want to tell everyone else how to do it.
The not so hysterical part is that if these proposed laws go through, it will obliterate countless individual’s and family’s well-being who spent hundreds and thousands of hours building their businesses and careers as a 3rd party seller just to have it all ripped out from under our feet…and done so by ignorant, small minded people who are so ridiculously disconnected from the very issues they’re trying to solve.
Thanks for the long note, Chad. We tend to agree that the currently proposed "anti monopoly" policy proposals aimed at dual marketplaces like Amazon do not make much sense. In fact, I think there is already some evidence from India that banning the dual mode is not working out great for consumers.