Post

Merchants don't have 51-60% margins they can afford to turn over to Amazon. To remain viable while selling on Amazon, they have to raise prices.

Amazon doesn't mind if prices go up, so long as Amazon's price remains competitive. So Amazon imposes a requirement on its suppliers called "most favored nation," which requires sellers to offer their best price on Amazon: pluralistic.net/2026/02/25/m...

Practically speaking, that means that when you raise your price on Amazon, you *must* raise your prices *everywhere* by the same amount, which means that no matter where you shop (Target, Walmart, the corner store or direct from the factory), you pay the Amazon Tax.

The Amazon Tax is a prime (you should forgive the expression) example of enshittification, in which an *intermediary* (a business that sits between buyers and sellers, AKA, "a platform") screws *both* customers *and* sellers to benefit itself.

But Amazon isn't the only example of a powerful digital intermediary that has used its market power to impose an economy-wide tax.

Wherever you look online, you find digital giants who grew the way Amazon grew (buying all of their competitors) and then did what Amazon did (squeezing buyers and sellers, making prices higher everywhere).

That's what happened with Expedia. Almost every travel site you can find online has been purchased by Expedia (Hotels.com, Travelocity, and Orbitz), and the ones that aren't Expedia subsidiaries were acquired by its main rival, Priceline (Booking.com, Kayak, Agoda and even Opentable).

Nearly all the hotel rooms are booked by a tiny minority of travelers - largely that same top decile that Amazon has so thoroughly captured and locked in - and hoteliers can't live without their business, and they're almost all Expedia and/or Priceline customers.

Expedia accounts for *80%* of all hotel bookings by dollar value.

Expedia's position, in other words, is basically Amazon's position, so Expedia is doing exactly what Amazon is doing: they charge huge fees to hotels, and then force the hotels to raise their prices everywhere through a "most favored nation" deal: storage.courtlistener.com/recap/gov.us...

But - as Lee Hepner writes for the BIG newsletter - Expedia has figured out ways to out-Amazon Amazon. They've copied one of Amazon's sleaziest businesses, and *made it worse*: www.thebignewsletter.com/p/how-expedi...

Here's Amazon's sleaziest commercial practice: when you search Amazon, the top results for your search aren't the best matches for your queries; they're products sold by the companies willing to pay the most for search placement, in a "real-time auction" that runs every time you search.

The cost of winning that auction comes out of your pocket through higher prices: the first result for an Amazon query is, on average, 29% more expensive than the best match. The top row is *25% more* expensive.

On average, the best match for your query is *17* positions down the screen, on the second page, where almost no one ever bothers to scroll: pluralistic.net/2023/11/03/s...

This rip-off is Amazon's *most* profitable line of business, more profitable than AWS or Prime. It makes the company more than *$80b/year*. And - incredibly - Expedia's found a way to make it even worse.

Like Amazon, Expedia auctions off its search results. They call this their "VIP listing" program.

Practically speaking, hotels *have* to pay for this, because it boosts booking rates by 42% (the first ten results on an Expedia search-results page get 62% of the clicks). VIP listing is expensive for the merchant - but it's even more expensive for you and me.

That's because Expedia requires hotels in its VIP listings programs to *raise their prices on non-Expedia sites by 10-25%...INDEFINITELY.*

Let me repeat that: to stay in business, hotels need to be on Expedia. To stay in business on Expedia, hotels have to raise their prices to pay Expedia's junk fees, but they have to raise their prices everywhere else.

But to *really* stay in business on Expedia, hotels have to use the VIP program, which is even *more* expensive. And - one more time - hotels in the VIP program have to jack up their prices *everywhere else, INDEFINITELY*.

This goes a long way to explaining why US hotel rates rose *58%* from a 2020 average of $103/night to a 2025 average of $162/night. It explains why hotel prices rose by 5% *last year*, which is *double* the rate of inflation.

And this is why Expedia stock is up 65% since the start of the Iran war, a fact that Expedia CEO Ariane Gorin attributes to "higher margins" from "higher prices": s202.q4cdn.com/757635260/fi...

In his coverage of the Expedia lawsuit - which brought many of these details to light - Hepner notes that hotels themselves have undergone near-total cartelization.