Data-driven personalized ads are the lifeblood of the internet. To a growing number of lawmakers, they’re also nefarious
Earlier this month, the European Union Parliament passed sweeping new rules aimed at limiting how companies and websites can track people online to target them with advertisements.
Targeted advertising based on people’s online behavior has long been the business model that underwrites the internet. It allows advertisers to use the mass of personal data collected by Meta, Google, and other tech companies as people browse the web to serve ads to users by sorting them into tens of thousands of hyperspecific categories.
But behavioral advertising is also controversial. Critics argue that the practice enables discrimination, potentially only offering certain groups of people economic opportunities. They also say serving people ads based on what big tech companies assume they’re interested in potentially leaves people vulnerable to scams, fraud, and disinformation. Notoriously, the consulting firm Cambridge Analytica used personal data gleaned from Facebook profiles to target certain Americans with pro-Trump messages and certain Britons with pro-Brexit ads.
The 2016 U.S. presidential election and the Brexit vote, according to Jan Penfrat, a senior policy adviser at European digital rights group EDRi, were “wake-up calls” to the Europe Union to crack down. Lawmakers in the U.S. are also looking into ways to regulate behavioral advertising.
What Will the European Parliament’s New Regulations Do?
There’s been a long back and forth about how much to crack down on targeted advertising in the Digital Services Act (DSA), the EU’s big legislative package aimed at regulating Big Tech.
Everything from a total ban on behavioral advertising to more modest changes around ad transparency has at some point been on the table.
The bill also includes a ban on so-called dark patterns —“design choices that steer people into decisions they may not have made under normal conditions—such as the endless clicks it takes to opt out of being tracked by cookies on many websites.”
That measure is critical, according to Alexandre de Streel, the academic director of the think tank Centre on Regulation in Europe, because of how tech companies responded to the General Data Protection Regulation (GDPR), the EU’s 2016 tech regulation.
In a study on online advertising for the Parliament’s crucial Committee on the Internal Market and Consumer Protection, de Streel and nearly a dozen other experts documented how “dark patterns” had become a major tool used by websites and platforms to persuade users to provide consent for sharing their data. Their recommendations for the DSA—which included more robust enforcement of the GDPR, stricter rules about obtaining consent, and the dark patterns ban—were included in the final bill.
“We are going in the right direction if we better enforce the GDPR and add these amendments on ‘dark patterns,’ ” De Streel told The Markup.
German member of European Parliament Patrick Breyer joined with more than 20 other MEPs and more than 50 public and private organizations last year to form the Tracking Free Ads Coalition. Though its push for a total ban on targeted advertising failed, the coalition was behind many of the more stringent restrictions. Breyer told The Markup the new rules were “a major achievement.”
“The Parliament stopped short of prohibiting surveillance advertising, but giving people a true choice [of whether to be targeted] is a major step forward, and I think the vast majority of people will use this option,” he said.
Despite passing the European Parliament, the DSA is far from settled. Due to the EU’s unique law-making process, the legislation must now be negotiated with the European Commission and the bloc’s 27 countries. The member states, as represented by the European Council, have adopted an official position considerably less aggressive—opting for only improved transparency on targeted advertising—and, according to Breyer, are “traditionally very open to [industry] lobbying.”
Whether the DSA’s wins against targeted advertising survive this process “will depend to a large degree on public pressure,” said Breyer.
How Has Big Tech Responded?
So far, Big Tech companies have publicly tread lightly in response to the European push to limit targeted advertising.
In response to The Markup’s request for comment, Google spokesperson Karl Ryan said that Google supports the DSA and that it shares “the goal of MEPs to continue to make the internet safer for everyone….”
“We will now take some time to analyze the final Parliament text to understand how it could impact us and our different users,” he said.
Meta did not respond to a request for comment.
But privately, over the last two years, Google, Facebook, Amazon, Apple, and Microsoft have ramped up lobbying efforts in Brussels, spending more than $20 million in 2020.
The advertising industry, meanwhile, has been public in its opposition. In a statement on the recent vote, Interactive Advertising Bureau Europe director of public policy Greg Mroczkowski urged policymakers to reconsider.
“The use of personal data in advertising is already tightly regulated by existing legislation,” Mroczkowski said, apparently referencing the GDPR, which regulates data privacy in the EU generally. He further noted that the new rules “risk undermining” existing law and “the entire ad-supported digital economy.”
On Wednesday, the Belgian Data Protection Authority found IAB Europe–which developed and administered the system for companies to obtain consent for behavioral advertising while complying with GDPR—in violation of that law. In particular, the authority found that the pop-ups that ask for people’s consent to process their data as they visit websites failed to meet GDPR’s standards for transparency and consent. The pop-up posed “great risks to the fundamental rights” of Europeans, the ruling said. The authority ordered IAB to delete data collected under its Transparency and Consent Framework and has six months to comply.
“This decision is momentous,” Johnny Ryan, a senior fellow at the Irish Council for Civil Liberties, told The Markup. “It means that digital rights are real. And there is a significance for the United States, too, because the IAB has introduced the same consent spam for the CCPA and CPRA [California Consumer Privacy Act and California Privacy Rights Act].”
In a statement to Tech Crunch, IAB Europe said it “reject[s] the finding that we are a data controller” in the context of its consent framework and is “considering all options with respect to a legal challenge.” Further, it said it is working on an “action plan to be executed within the prescribed six months” to bring it within GDPR compliance.
Google and Meta may be preparing for whichever way the wind is blowing.
A handful of European companies like internet security company Avast, search engine DuckDuckGo (which is a contributor to The Markup), and publisher Axel Springer see tighter rules around data privacy as a means to push the industry toward contextual ads or tech that matches ads based on a website’s content, and to therefore break the Google-Meta duopoly over online advertising.
What’s Happening in the U.S.?
On Jan. 18, Reps. Anna Eshoo (D-CA) and Jan Schakowsky (D-IL) and Sen. Cory Booker (D-NJ) introduced legislation to Congress to prohibit advertisers from using personal data to target advertisements—particularly using data about a person’s race, gender, and religion. Exceptions would be made for “broad” location information and contextual advertising.
“The hoarding of people’s personal data not only abuses privacy, but also drives the spread of misinformation, domestic extremism, racial division, and violence,” Booker said in a statement announcing the bill in January.
While there is bipartisan desire to rein in Big Tech, there is no consensus on how to do it. The bill most likely to pass the divided Congress is designed to stop Amazon, Apple, Google, and other tech giants from privileging their own products. Congressional action on targeted advertising does not appear likely.
Still, it is possible the Federal Trade Commission will take action.
Last summer, President Biden issued an executive order directing the FTC to use its rulemaking authority to curtail “unfair data collection and surveillance practices.” In December, the FTC sought public comment for a petition by nonprofit Accountable Tech to develop new data privacy rules.
Meanwhile, many U.S. digital rights activists, such as nonprofit Electronic Frontier Foundation, are hopeful that new rules in Europe will force changes globally, as occurred after the GDPR. “The EU Parliament’s position, if it becomes law, could change the rules of the game for all platforms,” wrote EFF’s international policy director Christopher Schmon.
It’s still early days, but many see the tide turning against targeted advertising. These types of conversations, according to Penfrat at EDRi, were unthinkable a few years ago.
“The fact that a ban on surveillance-based advertising has been brought into the mainstream is a huge success,” he said.
The online giant gives a leg up to hundreds of house brand and exclusive products that most people don’t know are connected to Amazon
It took Robert Gomez about five months to get his Kaffe coffee grinder to the big leagues in e-commerce: among the first three search results for “coffee grinder” on Amazon.com.
Gomez, founder of Atlanta-based consumer goods startup 4Q Brands, said he obsessively refined his photos and description, amassed reviews from happy customers, and paid Amazon $40,000 a month on advertising to boost sales, one of the elements Amazon tells sellers will increase search ranking.
Then Amazon introduced a competitor from house brand Amazon Basics and another from a brand that sells exclusively on Amazon, DR Mills.
“They ranked well right away,” Gomez said, each of them appearing among the top-three results for “coffee grinder” searches immediately. The reason, he said, was clear: “Their search ranking is high because they’re an Amazon brand.”
An investigation by The Markup found that Amazon places products from its house brands and products exclusive to the site ahead of those from competitors—even competitors with higher customer ratings and more sales, judging from the volume of reviews.
We found that knowing only whether a product was an Amazon brand or exclusive could predict in seven out of every 10 cases whether Amazon would place it first in search results. These listings are not visibly marked as “sponsored” and they are part of a grid that Amazon identifies as “search results” in the site’s source code. (We only analyzed products in that grid, ignoring modules that are strictly for advertising.)
When we analyzed star ratings and number of reviews, neither could predict much better than a coin toss which product Amazon placed first in search results.
Amazon told Congress in 2019 that its search results do not take into account whether a product is an Amazon-owned brand.
Sellers say it doesn’t seem that way to them. Gomez said Amazon’s brands have “unfair advantages” that make it harder for small merchants like him to compete” on its open marketplace. “Who bears the cost are those entrepreneurs and small businesses that don’t have the means to fight.”
The Markup found Amazon placed its Happy Belly Cinnamon Crunch cereal, with four stars and 1,010 reviews, in the number one spot ahead of cereals with better and more reviews including Cap’n Crunch (five stars, 14,069 reviews), Honey Bunches of Oats (five stars, 5,205 reviews), and Honey Nut Cheerios (five stars, 11,702 reviews). A vacuum cleaner from Amazon’s exclusive Noisz brand was placed on top, ahead of models from Bissell, Eureka, and Hoover with higher ratings and more reviews. And the Amazon-exclusive Concept 3sneaker from Skechers placed number one, four spots ahead of a similar but not exclusive to Amazon Skechers sneaker with the same star rating but 77 times more reviews.
A former Amazon employee told The Markup that the company used to give its new house brand products an unearned place at the top of search rankings when they first launched. He said the practice has since stopped.
However, we found that Amazon brands and exclusive products overall received an outsized portion of the top spot on search results, one that was far out of line with their proportion of the sample.
That’s not what shoppers expect.
In a national survey we commissioned from YouGov, only 17 percent of respondents said they assumed Amazon put its own products first. Half said they expected the first nonsponsored product on Amazon’s search results page to be the cheapest, highest rated, or bestselling.
By giving its brands top billing, Amazon is giving itself a significant leg up in sales. The first three items on the search results page get 64 percent of clicks, according to one ex-Amazon-employee-turned-consultant.
In a short, written statement, Amazon spokesperson Nell Rona said that the company does not favor its brands in search results and declined to answer any of the dozens of specific questions posed by The Markup.
She said the company identified its brands to shoppers by adding “Amazon brand” to the list of product features on the product page and sometimes to the listing title as well. We only found this to be the case in 23 percent of products in our sample that were Amazon-owned brands. She said brands that are exclusive to Amazon would not carry the disclosure because they are not owned by the company.
Invisible Tags
A signal, invisible to the public but coded into the listings, suggests that most of the Amazon brand and exclusive products that were listed first were ads. In 87 percent of cases, the listing’s source code identified them as “sponsored”—though that label isn’t shown to the public. Instead, Amazon labels the products “featured from our brands.”
Rona, the Amazon spokesperson, said the company considers “featured from our brands” listings “merchandising placements” and not “search results,” despite their presence in the search results grid. She also said they are not ads, despite the “sponsored” label in the source code. Rona said they are “clearly labeled to distinguish them from search results” but did not respond to questions about whether the company believes such disclosures were clear enough under Federal Trade Commission requirements.
Mary Engle, who retired as the FTC advertising practices associate director last year, said that what Amazon calls “merchandising” is actually advertising.
“Amazon’s placement of its own products on its own site is advertising, whether or not money changes hands,” she said. She said it would require an investigation to determine whether “featured from our brands” is sufficient disclosure under the FTC’s rules.
Bill Baer, a former assistant attorney general in charge of the antitrust division of the U.S. Department of Justice and former director of the Bureau of Competition at the FTC, said if consumers expect Amazon’s product search results to be neutral, but they are not, and the site is essentially a monopoly, that could be a violation of the FTC Act of 1914, which prohibits unfair competition and unfair or deceptive practices in commerce, or the U.S. Sherman Antirust Act, which prohibits monopolies from using their market power to harm competition.
“If basically you’ve got somebody with market power that is restraining competition both in terms of site access or where things appear on the site,” he said, “that is potentially problematic.”
Amazon’s online marketplace garners more than five times more sales than its closest online competitor, Walmart, which also allows third-party sales.
Congress is considering a package of anti-monopoly bills aimed at big tech, including the Ending Platform Monopolies Act, which would make the practice of platforms giving their brands a leg up explicitly illegal.
Amazon refers to its own brands and brands developed by others that sell exclusively on Amazon as “our brands.” They peddle everything from snack chips and vitamins to fashion and furniture.
Using public records from the U.S. Patent and Trademark Office and Amazon’s own statements, we identified more than 150 brands registered by or owned by Amazon. These include both brands with an obvious connection, such as Amazon Basics and Amazon Commercial, and those that are generally known to be owned by the company, including Kindle and Zappos. But they also include dozens more, such as Happy Belly, Daily Ritual, and Society New York, where the connection to the company is not obvious. Those are in addition to the estimated hundreds of third-party brands that are exclusive to the site.
We analyzed search results on Amazon for 3,492 popular internet product queries in January 2021 and looked closely at what Amazon placed in the first spot. In 60 percent of cases, Amazon sold this spot to an advertiser and added a public label indicating the listing was “sponsored.” Of the rest, Amazon gave half to its own brands and brands exclusive to the site, and the other half to competing brands. But Amazon brands and exclusives made up only 6 percent of all products in the sample, and competitors made up 77 percent. In short, Amazon was hogging the top spot.
In more than a quarter of searches in which Amazon gave its brands the top spot, it placed its products above competitors that had both better ratings and more reviews than the Amazon brand or exclusive product.
‘They Would Shut Us Down’
Sellers said there’s no mistaking the effect on sales of Amazon’s choices in search results.
“If the customers are not seeing [our products] in the top five offers, then it makes it really hard for us to reach customers,” said Gabriela Mekler, a Miami mom who co-founded the organizational products company Mumi in 2014.
Mumi’s top product—a set of color-coded packing cubes—struggles for visibility on Amazon, even after more than two years on the site. She said the coronavirus pandemic decimated her sales—they dropped by more than 68 percent—costing the company a hard-won “Amazon’s Choice” badge on its packing cubes.
Mumi has not placed on the first page of our search results for “packing cubes” for months. At the time of this writing, Amazon Basics took up eight spots on the first page; one was labeled “featured from our brands.” None were visibly marked “sponsored.”
“Their product will always show before yours,” Mekler said.
One Mumi product has still been selling well despite the pandemic, she said: reusable pill pouches. For now, there is no Amazon Basics pill pouch, and Mekler hopes there won’t be anytime soon.
“We’re a small company,” she said. “They would shut us down.”
The National Association of Wholesaler-Distributors, which represents more than 30,000 distributors, submitted a letter to members of Congress in July 2020, complaining that Amazon “abuses its position” to give preferential treatment to its house brands.
But when The Markup asked to speak to some of the sellers the group had quoted anonymously, NAW’s vice president of government relations, Blake Adami, demurred.
“Our members are still very hesitant to speak out against Amazon for fear of retaliation,” he said in an email, “even anonymously.”
Many sellers whose products we found were placed below Amazon products with fewer sales or ratings also declined a reporter’s request to be interviewed for this article, saying they were concerned it would negatively affect their livelihoods.
“Everybody’s so scared of Amazon,” said Paul Rafelson, executive director of the Online Merchants Guild, which represents Amazon sellers. “Their whole livelihood relies on them.”
‘This Was a Knockoff’
Some of Amazon’s competitors have accused the company of knocking off their products to sell under its house brands.
Williams Sonoma settled a lawsuit that included the claim that Amazon was copying West Elm furniture and selling it under the Amazon house brand Rivet. Allbirds co-CEO Joey Zwillinger wrote an open letter to Jeff Bezos when Amazon’s 206 Collective brand copied his company’s wool sneaker, urging Amazon to adopt Allbirds’ sustainability practices in addition to its design.
In March, Amazon Basics started selling the Everyday Sling, a camera bag with a similar design, the same name but a much lower price than a product from Peak Design.
“It wasn’t like they took some styling cues from it. This was a knockoff,” CEO Peter Dering said in an interview. The smaller company produced a parody video that now has 4.6 million views on YouTube. Within hours, Amazon changed the product’s name.
Dering said he wasn’t worried about losing sales because Peak Design mainly targets wholesalers and customers who want a high-end brand. Still, he said he found the move “highly distasteful.”
Rona, the Amazon spokesperson, said the company “did not infringe” on Allbirds’ or Peak Design’s “design rights” and “strictly prohibit[s] our employees from using nonpublic, seller-specific data to determine which store brand products to launch.”
Hard to Spot
Identifying all of Amazon’s brands and brand exclusives to the site for this investigation was cumbersome. The company does not provide a complete list. The Markup’s reporting team used various filters on the site, reviewed the U.S. Patent and Trademark Office records, and reviewed Amazon bestseller lists—but even then we likely missed some.
Consumers would have an even harder time. We found Amazon does not consistently label its brands and exclusives.
Of the products in our sample that Amazon considered “our brands,” about two in five were not labeled as such in search results nor did they carry a name that many people would understand was connected to the company, such as Amazon Basics, Kindle, or Whole Foods.
Inconsistent labeling, combined with an almost endless stream of its own private brands, leaves customers in the dark to decide whether Amazon highly ranked a particular product because it was a good buy or because it benefited the company’s bottom line.
Nine in 10 respondents to the national survey The Markup commissioned in July didn’t know that Amazon’s highest-selling house brands, apart from Amazon Basics, were owned by the company.
Even there, 24 percent of respondents could not identify Amazon Basics as an Amazon brand, and half didn’t know Amazon owned Whole Foods.
Alex Harman, competition policy advocate at Public Citizen who has studied Amazon’s marketplace, said that to him, the strategy of creating a stream of brands without a clear affiliation to Amazon feels “deceptive.”
Large brick-and-mortar retailers also have house brands. Costco has Kirkland Signature. Target has Up&Up, among others. Historically, he said, when large stores create brands they have been clearly affiliated with the store.
And Amazon’s search results are different from a store shelf.
“Unlike a retail store where you see everything on the shelf, the platform may be in a position to elevate its goods in a way that is harder to do in a retail outlet,” said Baer, the former FTC official and assistant attorney general at the Justice Department.
By creating more than a hundred trademarked brands, most without an obvious connection to the company, Amazon can preserve its reputation if one of its homegrown products flops. This happened in 2015 when customer reviews for its newly launched Amazon Elements diapers included complaints about leaks and “sagginess.” Amazon pulled the products after just seven weeks to make “design improvements.”
Stacy Mitchell, co-director of the small business advocacy group Institute for Local Self-Reliance, and a frequent Amazon critic, said that as Amazon’s brands squeeze competitors, those competitors have less money to spend on innovation—and consumers lose.
“Consumers don’t even know what’s missing,” she said.
Case in point: Brandon Fuhrmann, who runs the New York Amazon Seller Meetup. He was considering expanding his kitchenware brand into a new type of dishware. While checking trademark registrations and U.S. import logs for sellers with similar products, he realized that the majority of his competition would come from Amazon brands.
“When that happened, we realized we couldn’t even compete,” he said. He decided not to launch the product.
Rise of Amazon Brands
Amazon has continually set its sights on dizzying growth.
It launched in 1995, with the goal of becoming “Earth’s Biggest Bookstore.” Four years later, it declared its intention to become “Earth’s Biggest Selection.”
To reach this point, it took a page from rival eBay’s playbook, inviting individuals and business owners to list rare, used, and collectible items—which quickly transitioned to third parties selling mainstream, new wares on Amazon.
In 2003, Jason Boyce got a call from Amazon asking him to list his company’s basketball products on the nascent marketplace.
“We’re like, what are you talking about? You guys sell books,” he said. “What do you mean you’re selling sporting goods?”
Boyce took the plunge and his company’s basketball sales took off on Amazon.
By 2018, third-party sellers like Boyce were responsible for 58 percent of physical goods sales on Amazon. They helped boost Amazon’s North American sales by more than an order of magnitude, from $24.5 billion in 2009 to $386.1 billion in 2018.
The volume created fortunes for small businesses across the world. It also created a deep reliance on Amazon. A 2021 report by JungleScout, which provides software for Amazon sellers, found that Amazon was the only source of income for 22 percent of Amazon’s third-party sellers.
“Within two years of getting on Amazon, most of my clients, whether they want to or not, it becomes their single biggest sales channel,” said James Thomson, who was a manager at Amazon from 2007 to 2012 and now works at the e-commerce consulting firm Buy Box Experts.
And these new third-party sellers had lots of competition, eventually from Amazon itself.
Boyce said Amazon started undercutting his business, selling the same sporting goods—Spalding basketballs, for example—for less.
Unable to compete with Amazon on price for brand-name products, Boyce and his brothers launched their own brand, Harvil, in 2007, to sell sporting goods and home recreation equipment on Amazon. They figured Amazon couldn’t undercut their prices if he and his brothers owned the brand.
They had no idea Amazon was also beginning to launch its own brands and to enter into deals with companies to develop brands exclusive to the platform.
Among the first Amazon brands was Pinzon (a likely nod to the first conquistador to stumble across the Amazon River), which Amazon registered as a trademark in 2007 to sell bedding. Then came Denali for tools, and Amazon Basics for a slew of products, including household appliances and office supplies.
Sometime in 2017, Boyce was searching keywords related to his products on Amazon—”bocce ball,” “air hockey table”—when he noticed a new brand, Rally and Roar, peddling very similar products to his own. They showed up at the top of search results.
Rally and Roar is exclusive to Amazon, labeled as “our brands.” The company was moving in on his territory, again.
The speed of Amazon’s expansion of its own brands has been accelerating, according to several e-commerce and retail research firms. TJI Research counted 598 Amazon-exclusive brands in 2019. Coresight Research said Amazon brand products on the site tripled in the two years between 2018 and 2020 alone.
Amazon invites companies and individuals to join its “our brands” family through programs like Amazon Accelerator, which promises increased exposure for products sold exclusively on Amazon in exchange for extra fees, and sets a sales price if Amazon chooses to later buy the brand.
Boyce and his brothers had already been talking about getting off Amazon’s platform when they noticed Rally and Roar pop up. That settled it.
“We’re like, we’re not going to sit around and wait for Amazon to knock off the rest of our private-label products as well,” he said.
They sold the business.
A Leg Up
For years, Amazon gave items from its own brands multiple advantages when they first launched, said JT Meng, a former house brand manager at Amazon—though he said the practice has since stopped.
Employees manually applied the Amazon’s Choice label to a new Amazon brand product, even if it didn’t meet the usual criteria, he said.
And instead of starting from scratch in search results with zero reviews, sales, and stars, Meng said employees used a tactic called “search seeding” for new products, “cloning” a competing product’s search ranking and allowing the new Amazon product to appear immediately below that competitor in search results.
“We would use that for all of our products from the get-go for the first six months or longer,” he said.
Meng worked on the launch for Amazon Elements baby wipes, which he said were seeded against similar products from Huggies, Pampers, and others.
Sales spiked so quickly that his team had to stop promoting the Amazon Elements wipes so they didn’t take too much market share, he said.
Once a new house brand product was established, Meng said employees would turn off search seeding. “Without fail, your product would drop in ranking,” he said, “but the hope was that it would drop a small amount.”
By the time Meng left Amazon in 2016, he said search seeding and adding the Amazon’s Choice label to new Amazon brand products were no longer allowed.
Sellers who do try to compete with Amazon brands today said they feel compelled to pay for sponsored listings in order to get a higher result for nonsponsored listings on Amazon. On its Seller Central site, Amazon underlines to sellers how important sales are, stating that “better-selling products tend to list towards the beginning of search” and that as sales increase “so does your placement.”
“You can’t not advertise anymore,” said Boyce, who after selling his sporting goods line founded a consulting firm, Avenue7Media, which advises companies and individuals who want to sell on Amazon.
“You turn off the ads and you lose organic rank within days,” Boyce said. “It’s pay to play.”
Lots of companies are paying.
We found that inside the search results alone, 17 percent of products were paid listings. That doesn’t include entire rows of sponsored products that appear as special modules on about a third of search result pages. (Including those would roughly double the ad percentage on the first results page.)
Amazon is the third-largest seller of online advertising in the U.S., after Google and Facebook, and is growing fast. “Other” revenue, which the company says “primarily includes sales of advertising services,” jumped 52 percent from 2019 to 2020, to $21.4 billion a year.
Struggling for Visibility
“If you’re willing to spend a ton of money, you can sell a ton of product,” said Evan Patterson, vice president of business development at California-based Linco, which is one of Boyce’s clients.
The 47-year-old family-owned institution makes casters, the small wheels that attach to office chairs and industrial gear—and has a solid reputation in the offline world for premium products. It competes against a product from Amazon Commercial, among others.
It’s so well known in industrial circles that Linco’s competitors advertise against its name within Amazon’s search results, Patterson said.
Still, Linco hasn’t consistently listed on the first page of search results for “caster wheels,” despite selling on Amazon for years. It will appear on the first page for Patterson, but did not in repeated searches by The Markup.
The only thing that seems to help Linco’s search ranking, Patterson said, is to spend more money for paid listings on Amazon. The company now pays about $10,000 a month for advertising.
“Our search ranking has improved dramatically,” Patterson said.
But it still has a ways to go. When The Markup searched for “caster wheels” at the time of writing, Linco appeared in the middle of the fifth page.
As the title indicates, the original review finds the documentary important and more than worth viewing, even to the extent that it should be considered as something that’s important beyond the entertainment value. And while nothing in that article needs, from our perspective, to be altered and still stands, there is an omission that has grown in importance over the intervening weeks and months.
The omission was not only in the review, and virtually every other review we’ve seen, but also is a glaring one in the film itself. As a matter of fact that omission is so large and so glaring that it warrants a deeper look. Hence the title of this piece: The Social Dilemma 2.0: Follow the Money Edition.
Why “Follow the Money”? Because the film, in its admittedly excellent execution, chose to follow a personal, social and psychological thread in its storytelling arc, and, out of necessity, since the subject matter is so huge and complex, took the comments from the “insider experts” who comprised the on-camera interview segments, and featured mainly those that reinforced the personal, family and social perspective.
Indeed, the film included a fictional family, presumably meant to show how, mainly social media platforms such as facebook, were negatively affecting individuals and society as a whole, through fake news and internet-addictions fostered by the software and algorithm designs.
And this “slant” was carried almost to the point, by the very end of the show, of connecting the software based social media designs and corporate behavior of Facebook and others, to the larger growing malaise in society and the world at large.
Unfortunately, by using the fictional family, trying to show how both young and old are impacted, the scope, depth and severity of the underlying problem was, in essence, minimized.
Based on online public comments people seemed to take away that the idea that the film was accusing social media and facebook in particular of, was of causing people to become addicted to social media, for greed and profit, and that this was pretty much the center of the problem.
Google, Amazon and others were only mentioned in passing and the greed and economic problems associated with big tech was touched on and passed over in order to make the case, inadvertently, but nevertheless, that this was an individual, social and personal problem, and one that could be blamed on social media technology.
Arguments and rebuttals arose over the finer points of addictive behavior in general and how social media or internet addiction was just one of many human foibles, and how no hard proof could be compiled to link facebook or any other online platform indisputably to any particular individuals behavior, blah, blah, blah.
All of this became an easy, knee-jerk way to dismiss, out of hand, all the deep and serious problems that were hinted at in the groundbreaking documentary and thereby stop, effectively, any possibility for the film to become a general wake-up call to all who want to isolate and identify the massive, expanding and world destroying effect these monolithic tech behemoths are having on life on this planet.
Which is what the film aspired to and had to potential to be a beginning of.
In our original review we made an attempt to shift some of the focus, away from the more narrow one of looking at individual personal problems and affronts that are being perpetrated, bad as that is, toward a more global and economically based set of concerns.
To that end we cherry picked quotes from the on-camera interviews in the film in order to point out that there was a larger, even more dangerous set of issues at stake that were only hinted at in the film. (We have reprinted a few of them interspersed below)
“Companies like Google and Facebook are some of the wealthiest and most successful of all time. They have relatively few employees. They just have this giant computer that rakes in money, right? Now, what are they being paid for? That’s a really important question.”
-Jaron Lanier, founding father of virtual reality, computer scientist
This quote is and inquiry into the deeper issue; one that is car larger than the question of whatever dangers there may be for individuals who may experience negative symptoms of “internet and social-media addiction”.
Focusing on the personal problems of users of social media in this context is like looking at a planet whose economic system is based on brutal exploitive human slavery and wanting to discuss the food, or living conditions or wardrobe choices offered to the 7 billion slaves.
“This is a new kind of marketplace now. It’s a marketplace that never existed before. And it’s a marketplace that trades exclusively in “human futures”. Just like there are markets that trade in pork belly futures or oil futures. We now have markets that trade in human futures at scale. And those markets have produced the trillions of dollars that have made the internet companies the richest companies in the history of humanity”
-Shoshanna Zuboff PhD., Harvard Business School Professor, emeritus and author of “The Age of Surveillance Capitalism”
Like tobacco companies in the US 50 or more years ago the tech giants need helpless, addicted, impoverished victims to hold up their empire. And, just in the same way, the cost of using the “product” of big tech is pain, suffering and eventually death. And ultimately, just like with Big Tobacco , when the customer base “wakes up” all the empires will collapse, seemingly in a heartbeat.
In the meantime, unfortunately, misdirecting the scope and center of the problem is helping to maintain the empires and poses no threat to them, managing only to confuse and obfuscate the size and severity of the real problem that has emerged.
Above: Photo / Netflix
The real problem with having four companies control a massive percentage of the economy with virtually unlimited profit margins and almost no employees
As the quote above states. These “internet” firms are raking in trillions of dollars in a business model that is based on various forms of exploitation and virtual human trafficking.
This is where we diverge from, and must go far deeper into the problems, than the documentary was able to go.
Firstly, it was left unclear who exactly the firms are that are being singled out in the film. By calling the film “The Social Dilemma” which echos “The Social Network” film based on the origin story of Zuckerberg and Facebook, there’s an implication that Facebook is the “main” problem.
Naturally this choice was logical given that ex-Facebook and ex-Google heavyweights were represented in the interviews. However this is a huge, misleading and erroneous perspective.
Of the huge tech monopolistic-monoliths Amazon, Facebook, Google and Microsoft are the most dangerous. (Apple, in an exception, however, for example, as it designs and builds actual physical products, although it is often unfairly combined with the other 4).
For the sake of simplicity, Microsoft, appearing, deceptively, like harmless-looking old grandfather by comparison, would be a complicated choice to tie into any exposé, therefore was never mentioned. (that we are aware of).
As a matter of fact, Amazon could have had a whole separate yet equally disturbing documentary assigned to its “alleged” crimes and misdemeanors, but ex-Amazon employees would be unlikely to come forward, potentially due to fear of retribution and possible bodily harm.
Thus, one is left with Facebook & Google and then Google becomes partially let off the hook, in the documentary, by focus on “social media”.
The Real Crimes are Economic and based on Inherently Evil Business Models that can not be Removed without causing the Giants Themselves to Collapse
And that’s why they can not be “reformed”. Like a somnambulistic slave population from some kind of dystopian sci-fi fantasy, within a short span of around twenty-five years of internet life, we have seen the emergence of an entirely new and, unfortunately ugly, economic system.
This new system created Jeff Bezos’ obscene, circa 200 billion fortune, as well as the behavioral diseases explored covered extensively in “The Social Dilemma”. The system has also created the sick twisted saga of WeWork and the exploitative business models of companies like Uber and Grub-hub and the like, thereby creating the “gig economy”.
The pandemic that began in 2020 has massively accelerated this highly problematic “new economic order” until Amazon is closing in on being the largest single employer in the USA. (currently #2 with over 750,000).
Why is that not something to applaud? Doesn’t that make them “ok” while Facebook is the real villain?
To the contrary, it can be argued that Amazon’s business model is even more destructive than Facebooks, with it’s vast system of not only exploiting workers but maintaining a serfdom of suppliers and small business “marketplace partners” who are eaten-up and spat-out with a viciousness no historical dictator could ever hope to match.
It is an historical fact that all of the (non-amazon) retail trade is seen by Amazon as an enemy to be eliminated, and that their explicit goal is to destroy the possibility of any economic transaction taking place, in countries where they operate, without Amazon earning a cut – a kind of Amazon-tax on all transactions. “Your margin is my opportunity” as Bezos famously cackled.
This mirrors, in products and computer services, the model of Facebook and Google have in online traffic and ad income, whose goals are to control and take a massive profit from at least 99% of all “digital” advertising revenues. These already represent the majority of all advertising and are growing in total amount and percentage every year.
“In 2019, digital will account for 50.1% of total media ad spending worldwide thanks to strong growth from major digital ad sellers like Google, Facebook, Alibaba and Amazon.” (emphasis mine)
The turning point we have reached, in other words, is one where the sheer size, power and dominance of these firms threatens to overwhelm our entire economy (what’s left of it after the pandemic).
And further, to succeed in controlling it, so totally, as to raise the likelihood that their cancerous behaviors and business models will ultimately cripple and kill the economy itself. Just in time for Global Warming to hit home.
The reason for such pessimism (shared incidentally by those insiders interviewed in “The Social Dilemma”)? Isn’t this all just “good ol’ capitalism”? Isn’t complaining about it just the “whining of losers”?
The problem lies in the self-destructive and totally out of control algorithmic dictatorship systems that these “genius” firms have built.
Take Amazon, again, for example. It’s power and dominance is based on bilking it’s marketplace parters (which have, during the life of the company, contributed the lion’s share of the revenue and an even larger percentage of the profits), and then using those funds to sell it’s own products at a large loss (an illegal activity, rarely prosecuted in the US, known as the loss-leader strategy), in order to harm and, if they succeed, destroy all external competitors (try selling products at less than cost at a massive scale with no source of funds to pay for the disparity).
This neat “fly-wheel”, which is the real one, not the one Bezos has bragged about for decades, is supplemented by enticing Chinese producers to further destroy the domestic market for any US competitors, and, voilà! this wonderful project is actually subsidized by the USPS.
When this monstrosity of a “turbo-charged-Ponzi Scheme” manages to starve its “partners” (millions of small business marketplace sellers) and enemies (everyone else) literally to death, customers will also die (financially).
That is if the government doesn’t intervene first.
The fear of government intervention at Facebook, Google and Amazon is palpable. The lost cases and launched actions are mounting month by month and year by year.
The worst case scenario is only possible if the connection is somehow kept “secret” long enough to deflect blame onto the government, addicted and victimized individuals and / or anyone one else they can attack.
Just like the whistle blower in “The Insider” who was threatened and forced to live in fear until Big Tobacco was finally held to account, we are all hostages of the largest most virulent form of anti-competitive-monopolistic behavior in history. And it is time to wake up.
Forget your internet addiction and all the smoke screens blocking the truth from being seen. The internet, and the communication and economic lifeline that it has become for all of us, is too important to be controlled by 3 or 4 obscenely massive companies.
The longer it takes to dismantle the current malfunctioning system and build a new one, the more we will all suffer and contribute to future suffering, at a scale that is impossible to imagine.
There is a bright spot in all of this! The corner has been turned on people taking notice that there is a problem with the way things are, regarding monopolistic control of the internet realm.
Companies that create build and actually provide and sell physical products, such as Apple and Tesla (and others) are, while far from perfect, not part of the gang that grows almost limitlessly based on exploitation. They do depend on prosperity to survive, since they research and design and innovate cutting edge technologically advanced products (expen$ive), that need to be bought by someone, at the end of the day.
That is why I believe that they, and others like them, will, more and more, become part of the solution, rather than trying to compete directly by being even more exploitative and evil than the others.
Next up: “The Social Dilemma 3.0” will be about business models that need to emerge if we are going to survive and prosper. Thanks for reading and stay tuned.
As you might be aware, a new documentary is on the top ten most watched list on Netflix and is getting a lot of attention. The Social Dilemma is a well made documentary, directed by Jeff Orlowski, that aims to reveal the problems, very very big problems that have arisen, mainly in the past decade in the way social media and internet platforms generally, are operating and prospering.
While that may sound harmless at first blush, it’s the sheer scale; trillions of dollars, and the lack of any product or service, other than to advertisers, that begs the question: at what expense to humanity?
This is a big, important subject and is one that is extremely difficult to cram into an “entertaining” documentary. Here, an attempt is made to tackle that difficulty in two main ways.
First there are many on-camera interviews with almost exclusively former and current Silicon Valley insiders, many of whom where partially responsible for the very systems and methods that are being called into question here, and second, the two inter-twined semi-fictional dramatic elements, clearly meant to help viewers that may lose interest in discussions of algorithms, machine learning and corrupt business models.
Choosing insiders is not an oversight but by design
The choice of such a long list of high level tech insiders as interviewees is important and meaningful. The very fact that people, most of whom profited and made careers out of building these systems and platforms, are willing, now, to passionately speak out about them, and agree that they are horrific mistakes that have the potential to destroy not just people’s lives but humanity and the planet itself, speaks volumes.
While there are many other scholars, journalists and witnesses that could, and should, have their ideas and opinions heard, it is the extreme fact that insiders are willing to address these problems so candidly and so passionately, that helps this to be a mind-blowing and impossible to ignore documentary film.
Companies like Google and Facebook are some of the wealthiest and most successful of all time. They have relatively few employees. They just have this giant computer that rakes in money, right? Now, what are they being paid for? That’s a really important question.
-Jaron Lanier, founding father of virtual reality, computer scientist
The film must be seen, and the information absorbed, to understand the true importance, but, in a nut-shell, what is becoming more obvious by the minute is that the combination of massive power based on worldwide near-monopoly status, and a business model that has no contribution to make or product to sell, has allowed these platforms to amass trillion dollar fortunes in a lethal mix that must be stopped at all costs.
”The first fifty years of Silicon Valley the industry made products, hardware, software, sold them to customers, nice, simple business. For the last ten years the biggest companies in Silicon Valley have been in the business of selling their users”.
-Roger McNamee, Early Facebook investor and Venture Capitalist
Critics fail to see the film’s urgency and instead nitpick it as an imperfect entertainment product
There are layers of irony in the fact that the weaknesses decried by many critical articles written about this film are the same ones that the film is pointing to, and a major force, one that propelled these online platforms to positions of virtually unlimited power in the first place: human weaknesses and short attention spans.
”The classic saying is: “if you’re not paying for the product, then, you are the product”
-Classic Silicon Valley truism
The interviews are powerful and the quotes and alternately chilling and illuminating. So much so that it is actually difficult to absorb all at once. Many reviewers chose to simplify this reality by boiling the many serious quotes down to “dystopian” cliché, as if the end of the world is a topic for a cartoon movie review. Others harped on the weakness of the acted-out semi-fictional stories as not being the optimum way to get the real data and facts across.
The two narrative threads portrayed by actors revolve around an imaginary semi-suburban mixed family and their interactions with technology platforms and social media and a fictional visualization of the “back end” of the software systems used by the giant platforms (Facebook, Google, etc).
This back end software is elevated to a “triple-android” character, portrayed by Vincent Kartheiser, of Madmen fame, as sort of automaton-triplets that embody the actions of the software, AI and the integrated instructions, presumably from Zuckerberg himself (or the equivalent at Google or other platforms. (character name is, revealingly, “AI”)
This is a new kind of marketplace now. It’s a marketplace that never existed before. And it’s a marketplace that trades exclusively in “human futures”. Just like there are markets that trade in pork belly futures or oil futures. We now have markets that trade in human futures at scale. And those markets have produced the trillions of dollars that have made the internet companies the richest companies in the history of humanity”
-Shoshanna Zuboff PhD., Harvard Business School Professor, emeritus and author of “The Age of Surveillance Capitalism”
While these filmic-devices are not ideal or particularly precise in showing the problems with the entire complex system, they are, nevertheless, a good choice to find a way for the statements of the interviewees to be dramatized. They can help people who are not technical analysts to viscerally grasp the deep and serious problems being discussed. Without these elements the film’s audience would be, almost certainly, far smaller. This fact was not appreciated by many reviewers, however.
”Many people call this ‘surveillance capitalism’. Capitalism profiting off of the infinite tracking of everywhere everyone goes, by large technology companies whose business model is to make sure that advertisers are as successful as possible”
-Tristan Harris, Google’s former design ethicist and co-founder of The Center for Humane Technology
One reviewer even mistook the fictional anthropomorphic portrayal of software algorithms and artificial intelligence, all three by the same actor, as a real “unnamed” social platform and that these characters were supposed to be employees of the “unnamed” platform!
All of this confusion is directly related and lies at the heart of the eponymous dilemma being addressed. If the interview subjects, many of whom have become extremely rich from their contributions, are terrified of the evil power of these systems and platforms, what can be done to stop them from getting even bigger and more powerful and eventually destroying us all?
What chance of understanding and solving the problem to the rest of us have?
”How much of your life can we get you to give to us? We often talked about, at Facebook, this idea, of being able to just “dial that” as needed. And we talked about, you know, Mark (Zuckerberg) have those dials… “let’s dial up the ads a little bit”, dial up the monetization, just slightly… At all these companies there’s that level of precision”
-Tim Kendall, Facebook / former director of monetization, Pinterest / former president, CEO / Moment
Such a question sounds almost like a joke to anyone who has not followed and investigated the rise of these behemoths and the “legal” and yet criminal behaviors they perpetrate on a global scale, amplified by computing and financial powers that would have been unimaginable even 2 decades ago.
Therein lies the rub.
The beginning of the end of malignant big tech structures or of us?
The only criticism that stands out to this reviewer is that the message of doom was portrayed as an open question with not much in the way of suggestions for solution, or ways forward other than “delete your social media accounts”.
”there are times when there is a national interest, there are times when the interests of people, of users, is actually more important than the profits of somebody who is already a billionaire”
-Roger McNamee, Early Facebook investor and Venture Capitalist
While that, in and of itself, is a start, the reality is that governments around the world, particularly in Europe and Australia have convicted the giants of criminal behavior on multiple occasions and there are many pending anti-trust actions, not to mention grass roots support for radical change to laws and regulations as a response to the truly destructive nature of these platforms.
“These markets undermine democracy and they undermine freedom and they should be outlawed. This is not a radical proposal. There are other markets that we outlaw. We outlaw markets in human organs. We outlaw markets in human slaves. Because they have inevitable destructive consequences.”
-Shoshanna Zuboff PhD., Harvard Business School Professor, emeritus and author of “The Age of Surveillance Capitalism”
In an odd way the truth of even the most hyperbolic statements is what makes it so hard to keep people engaged. If these platforms and, in particular the dangerous and destructive business models that they are allowed to operate under, are not replaced or at least broken up, this could represent an even larger threat to humanity than climate change or nuclear war, so where do we start to dismantle them?
”We could tax data collection and processing. The same way that you, for example, pay your water bill, by monitoring the amount of water that you use. You tax these companies on the data assets that they have. It gives them a fiscal reason to not acquire every piece of data on the planet.”
-Joe Toscano, Google / Former experience design consultant and author of “Automating Humanity”
This is where interviewing and asking some very distinguished people who were, in part, responsible for building these systems, falls apart. Why should they be expected to have a solution for a problem that they, admittedly, were a part of creating?
”What I see are a bunch of people who are trapped, by a business model, and economic incentive and shareholder pressure that makes it almost impossible to do something else.
-Tristan Harris, Google’s former design ethicist and co-founder of The Center for Humane Technology
The answer is, of course, that they should not be expected to be the ones with the solutions – though their support of finding solutions and tackling the problems is very valuable, indeed. This is why this film deserves not criticism as an imperfect entertainment vehicle, but rather support and recommendation, as an important beginning in recognizing the threat posed by these business models; to mental health, economic prosperity and political stability of all nations.
”Whether it is to be utopia or oblivion will be a touch-and-go relay race right up to the final moment…”
Ad is an entertaining dramatization of their famous circular pizza box patent.
Still / Apple
The head of Apple’s food services team helped design a circular pizza box a few years ago. The next time you order a pizza at Apple’s Cupertino Campus – you’ll see one.
What makes it special, other than the circular shape and clean Apple-white aesthetic, are the holes that allow the steam to escape and insure that the pizza doesn’t get soggy. Looking as much like a UFO as the Campus looks like a Space-Ship is also somehow implied. The patent can be traced back to 2010.
https://youtu.be/G9TdA8d5aaU
The ad takes you through the adventure of invention, tracing the quirky, creative steps of these rag-tag designers.
Above all, it does an excellent job capturing the essence of the creative process, the near-neurosis of the design team, and all the hurdles life puts in front of invention.
Still / Apple
The spot also does an excellent job of showing how we could all use Apple products to scale those hurdles, much as our underdog heroes do. Finally we are along for the ride as these future design champs get the chance to make their big pitch.
Still / Apple
[ During the last shot as they board the elevator headed for the upper floors, I do wish they added an insert with someone pushing a circular elevator button (with the iconic Apple logo, of course), — Ed. ]
Google was fined 1.7 billion dollars (1.5 Billion Euros) for online advertising antitrust violations. This is the third fine from European authorities since 2017. The fines, along with those against other big tech firms, have established the European Union as the most consequential oversight body in policing internet tech firms that are seen as having too much power.
Europe is a leader in taking a stronger approach to reigning in firms such as Amazon, Facebook and Google (Alphabet). A broad consensus holds that these huge tech behemoths represent a danger to fair competition.
“Google has cemented its dominance in online search adverts and shielded itself from competitive pressure by imposing anticompetitive contractual restrictions on third-party websites, this is illegal under E.U. antitrust rules.”
Margrethe Vestager, Europe’s top antitrust watchdog
A variety of infractions have been committed by Google in the past couple years. They were fined for misusing their Android ownership to undercut rivals. Google was also fined for attaching an increased amount of text ads to third party companies who used the Google search bar.
The internet search leader bundled its ad platform within the third party custom search engines. This practice undercut Microsoft, Yahoo, and other digital advertising companies.
European authorities have been more aggressive with tech companies, demanding improved privacy, transparency, and even copyright regulations. Competition Commissioner Margrethe Vestager has fined Google over 3 billion dollars since 2017. Alphabet/Google owes a total of 8.2 Euros (9.3 billion dollars). Google hasn’t paid the fines yet, and plans to appeal. Google stock is up 17 percent in 2019.
In the U.S., Senator Elizabeth Warren, Democratic candidate for President in 2020 said that Facebook, Google, Amazon and Apple should be broken up due to various antitrust issues.
Reports indicate that Nike’s “Kaepernick” campaign was successful as both advertising (increasing sales) and as controversial social commentary. In this case, it appears to have had the intended effect.
The “Success has many Fathers” rule led, unavoidably, the next batch of socially aware commentary with a taste of controversy. A great new genre and, overall, a positive move and redefinition of advertising?
In the case of Gillette, it begs the question, why Gillette and why now? The previous Gillette campaign “Boston Made” was a stark departure from their staple of ads, oriented towards product shots and hawking of benefits, that go back decades. Why change now to new styles and directions?
A revolution in direct-to-consumer branding in the U.S.A., that’s why.
The huge and unexpected success of upstarts in the once impenetrable shaving supplies market by online “answer brands” like Harry’s and Dollar Shave Club was behind a drop in Gillette’s 70% of the market in 2008 to only 50% in 2017.
For more than a century Gillette and Schick were #1 and #2 in a huge men’s shaving industry which recently accounted for $2.8 billion in annual sales. Suddenly, the two main upstarts have grown to around 10% of that.
A bite of that magnitude, and one that is growing, was enough to awaken the sleeping giant. First, an attempt at rebranding as a kind of “local” start-up with the “Boston Made” campaign mentioned above, and now, with the “We Believe: The best men can be” ad, the giant is fighting back.
Problems of veracity with the Boston ads, and perhaps looking a little desperate with the newest socially aware salvo notwithstanding, we should all still applaud this story and others like it.
Having four or more choices and pricing options in a formerly closed market is a clear advantage for consumers. And, regardless of your take on the content or message in the “Believe” clip above, it’s still better and more interesting to see this than yet another animated imaginary blade cutting fake hairs on a cartoon chin “oh so close and easy”.
Even this video response from Égard Watch Company adds to the conversation and to the variety of opinions, not just on “what is a man?” but even more so: “what is an advertisement?”.
Ok, opportunistic? Sure. But at least new things are being tried and tested.
Be it Razor’s or a Mattress or any other product, with help from changes brought on by eCommerce, the wave of companies finding ways to capture even 10% of a previously stagnant market are a ray of hope and a healthy shot of competition.
“Even this video response from Égard Watch Company adds to the conversation and to the variety of opinions, not just on “what is a man?” but even more so: “what is an advertisement?”.”
Never mind that Harry’s was recently bought by Unilever (and was thereby swallowed up by Gillette’s main competitor since P&G owns Gillette), the wave of new companies across all categories, many of which were thought of as impossible to enter at any cost, is a win for us all and one of the most exciting trends to emerge as the internet begins it’s third decade.
So, hooray! and thanks to Nike (although, perhaps the extra $6 billion in sales are thanks enough). Here’s to hoping that more large companies will jump into the fray with more “crazy” campaigns to recapture relevance (and market share) from the new kids on the block.
