from the you-need-to-opt-out-of-being-taken-advantage-of dept.
Arthur T Knackerbracket has processed the following story:
Amazon and Meta have agreed to not use data collected from their marketplaces to unfairly benefit themselves, the UK's Competition and Markets Authority announced on Friday.
The monopoly watchdog launched separate investigations into both internet giants' business practices, and accused the Big Tech duo of not only gathering up information about sellers using their respective online souks, they also - surprise, surprise - exploited that info to get a commercial advantage.
In Amazon's case, the e-commerce giant used vendors' sales figures to decide which items it should sell, and how much to price products to get an edge over everyone else. The internet behemoth also promoted its own products with its Buy Box feature and it further cut into retailers' margins by charging extra costs if they wanted to use Amazon's Prime delivery services, the CMA said.
Now Amazon has committed to doing less of that. The CMA said the online souk will be prevented from using third-party seller data that gives it an unfair commercial advantage, and will allow rivals to negotiate rates with independent delivery contractors working on behalf of Amazon.
[...] Meanwhile, similar agreements have been negotiated between the CMA and Facebook's parent biz Meta too.
The social media mega-corp was accused of exploiting advertisers hawking wares on Facebook Marketplace, and using competitors' data to improve its own products or services.
"Going forward, competitors of Facebook Marketplace that advertise on Meta platforms can 'opt out' of their data being used to improve Facebook Marketplace. Without these measures in place, Meta risks having an unfair competitive advantage that could distort competition," the CMA said.
"Having assessed the commitments and the feedback received, including from sellers, advertisers and customers, we believe both sets of commitments address the specific competition concerns we had here in the UK," Ann Pope, the watchdog's senior director for antitrust enforcement, concluded.
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Tim O'Reilly, Mariana Mazzucato, and Ilan Strauss have three working papers focusing on Amazon's ability to extract unusual profits from its customers nowadays:
The papers are:
- Algorithmic Attention Rents: A theory of digital platform market power
- Amazon's Algorithmic Rents: The economics of information on Amazon
- Behind the Clicks: Can Amazon allocate user attention as it pleases?
The core idea in all three is that Amazon has become the default place to shop online for many. So, when Amazon changes their site in ways that make Amazon higher profits but hurt consumers, it takes work for people to figure that out and shop elsewhere.
The papers criticize the common assumption that people will quickly switch to shopping elsewhere if the Amazon customer experience deteriorates. Realistically, people are busy. People have imperfect information, limited time, and it is effortful to find another place to shop. At least up to some limit, people may tolerate a familiar but substantially deteroriated experience for some time.
[...] I think one model of customer attrition is that every time customers notice a bad experience, they have some probability of using Amazon less in the future. The more bad experiences they have, the faster the damage to long-term revenue. Under this model, even the level of ads Amazon has now is causing slow damage to Amazon. Amazon execs may not notice because the damage is over long periods of time and hard to attribute directly back to the poor quality search results, but the damage is there. This is the model I've seen used by some others, such as Google Research in their "Focus on the Long-term" paper.
Another model might be that consumers are captured by dominant companies such as Amazon and will not pay the costs to switch until they hit some threshold. That is, most customers will refuse to try alternatives until it is completely obvious that it is worth the effort. This assumes that Amazon can exploit customers for a very long time, and that customers will not stop using Amazon no matter what they do. There is some extreme where that breaks, but only at the threshold, not before.
The difference between these two models matters a lot. If Amazon is experiencing substantial but slow costs from what they are doing right now, there's much more hope for them changing their behavior on their own than if Amazon is experiencing no costs from their bad behavior unless regulators impose costs externally. The solutions you get in the two scenarios are likely to be different.
Related:
- Amazon And Meta To Stop Using Third-Party Data From Rivals
- Amazon's Smart Speakers Collecting Kids Data May Lead to Government Lawsuit
- Amazon Offering Customers $2 Per Month for Letting the Company Monitor the Traffic on Their Phone
(Score: 3, Interesting) by looorg on Wednesday November 08 2023, @11:33AM (1 child)
Considering that both of them are, probably, already drowning in their own data I don't see them needing much outside or rival third-party data. If they do they'll just crank up their own collection and if that just isn't enough they are large enough to just buy the third-party company for their data, then it's no longer third-party data but primary data since they now own that company to.
But will they? What effect will it have if they do? Back of the line? They become like invisible at the market place etc?
(Score: 2) by PiMuNu on Thursday November 09 2023, @09:04AM
Agreed. It looks absolutely like the UK people have caved in.