Following the news of Amazon’s lawsuits and after skimming through the complaints, here are my thoughts.
price do go up | 羊毛出在羊身上
There’s no free lunch. While prices may seem lower on Amazon, the market is interconnected. Amazon’s attempt of achieving lower price would backfire.
Amazon’s power forces sellers to comply with its Buy Box rules, meaning they must keep prices equal or higher across all channels to access Amazon’s vast demand. However, because Amazon charges high commissions, sellers often decide to raise prices across the board.
In the end, Amazon might clenched higher market share because they have lowest price sellers. However, consumers pay more, and overall welfare declines.
Buy Box Transparency
A key criticism in the lawsuits is that Amazon intentionally obfuscates the Buy Box mechanism, but this argument is weak.
The situation is similar to Google search. Both platforms rank participants (websites for Google, sellers for Amazon) based on certain ‘signals’. Players have strong incentives to climb these rankings, as even a small bump can mean significant profits. However, ranking rules can’t be fully transparent—otherwise, players would game the system, undermining quality and fairness.
If Amazon’s Buy Box formula, for example, gave the edge to the lowest-priced seller, algorithms would undercut prices in a race to the bottom, creating a chaotic price loop. Google admits its ranking algorithms will never be fully public, and for good reason. Amazon, with its algorithmic pricing, operates similarly, letting sellers pay to boost visibility through sponsored listings.
Amazon’s Role
I think, Amazon can design the Buy Box to favor sellers with lower prices on its platform. However, it shouldn’t harm user experience by making it harder to buy from outside sources.
The Buy Box should present the best option and help customers avoid sifting through dozens of sellers. It shouldn’t be used to manipulate competition, tightening sellers’ options or frustrating buyers with unnecessary screening obstacles becore purchase. Amazon could make its platform more inclusive and user-friendly without sacrificing surplus, and sometimes, welfare and fairness.