Have you seen the monologue from Bill Maher on Amazon and Bezos? If not you better take a look. Can’t say if Bill is a barometer of the pulse of the public at large, but this time he seems to be spot-on. There could be a sea-change coming, even as we all reflect on the massive changes wrought this year, not only by the pandemic itself, but by the collateral damage and collateral advantage, in some cases, that came with it like a tsunami after an earthquake.
Perhaps change can be good. Tesla and Elon Musk are trying, at least, and the upcoming announcements regarding battery tech breakthroughs are like a ray of sustainable sunshine in a world of clouds and rain. Quibi appears to be struggling out of the gate (surprising no one!) but with billions in their war chest it’s likely too soon to count them out entirely. After you check out the Bill Maher video below, you might want a little deeper background on the landscape that led to Amazon’s insane dominance, so check out the extended, anonymously sourced reporting by our News Staff.
Isn’t it funny that the so called bursting of the dot-com bubble in 2000 which resulted in a nearly 75% drop in the tech heavy NASDAQ index by March, 2000. Ultimately, among survivors and upstarts, the winner-takes-all saga led to no less than three trillion dollar companies. Click to see complete story.
Tesla has proven already that a well designed and engineered EV has many superior qualities compared to an equivalent ICE (internal combustion engine) vehicle. Teslas have shown that they can last up to one million miles with far less maintenance. Click to see complete story.
A recent “study” has been cited by a gaggle of digital media outlets. Featuring headlines such as “Jeff Bezos Could Be the World’s First Trillionaire, and the Overwhelming Response Is ‘Thanks I Hate It’ (Vice.com) and“Jeff Bezos could become world’s first trillionaire, and many people aren’t happy about it” (USA Today) and trending on twitter via the hashtag #bezostrillionaire and #RIPCapitalism. Click here to see complete story.
Jeffrey Katzenberg and Meg Whitman launched Quibi on April 6th. The latest project from the two well-experienced entertainment moguls, Quibi is a streaming service designed for the smallest of screens— namely, smartphones and other mobile devices. The subscription based platform’s initiative is to provide short bursts of entertainment for people on the go, keeping content between seven and ten minutes long apiece. Click to see complete story.
Larry Page and Sergey Brin, the founders of Google and respective President and CEO of its parent company Alphabet Inc, have officially announced plans to step down from their high-ranking management roles in the tech world. Page and Brin created the Google search engine in 1998 when they were PhD students at Stanford University. Since then, the two have expanded the company into a multi-purpose technological empire.
Now, twenty-one years later, the forty-six year old entrepreneurs are resigning from their leading positions at Google. However, given the stress that Google is under, they are retiring at a suspiciously convenient time. And even though they are sacrificing their titles, they are simultaneously managing to maintain stakes in the Google brand.
Taking over for Page and Brin is Pichai Sundararajan—better known as Sundar Pichai, the former number-two at Google who has practically been acting as the face of the company for the past few years. As the two founders have found themselves more invested in Google’s experimental sectors recently—Brin focusing on GoogleX’s driverless cars and Google Glasses while Page has shifted his attention towards flying automobiles—most of the Google’s more widely-used properties have fallen under Pichai’s supervision.
Pichai has been with Google since 2004. He is responsible for convincing the company to start its own browser in 2008, which lead to the immensely successful Google Chrome. In 2013, he took over the Android Division, better integrating Google properties into the line of smartphones without sacrificing their affordability. He also spearheaded the development of Chrome OS, the operating system that fuels Google’s popular Chromebook laptops.
Indeed, Pichai is an obvious choice to replace Page and Brin as CEO of Google and Alphabet. The man has practically been running the company’s mainstream innovations for the past ten years, while its founders take the backseat to play out their billion dollar tech fantasies.
Then again, Page and Brin are far from exiled from the Google community. Although they are no longer acting leaders, they will still keep their fourteen percent stakes in the company’s finances. As majority stockholders, they will also retain influence over Alphabet’s decisions. Thus, Page and Brin’s step down from power is hardly a step down at all, but rather an excuse to hold onto control while dodging personal accountability in trying times.
And trying times these are indeed for Google. Within the past year especially, Congress and other authorities have been cracking down on tech conglomerates such as Facebook, Amazon, Apple, and of course, Google. Like its fellow cyber juggernauts, Alphabet has been criticized for having a monopoly on data. Not only are users starting to think that Google wields too much power, but they also fear what it is doing with such power, as the worldwide company becomes oddly elusive when questioned about its privacy standards, information distribution, and business ethics.
Even Marc Zuckerberg had the slightest integrity to come before Congress and speak for Facebook during the Senate Committee hearing on big tech last year. Page and Brin, however, were nowhere to be found. Despite being requested at the hearing, they left a conspicuously empty seat in Washington DC with Google’s name on it.
Ever since cyber ethics and big tech have become hot topics in the media, the founders of Google have been moving further and further away from the spotlight. Their resignation from Alphabet as a whole signifies their ultimate fall into the shadows, where no one can accuse them of immorality or illegality on behalf of the company. The burden will now fall on Pichai.
In a way, little has changed. Pichai has more or less been answering for Page and Brin for a while, handling publicity and leading all of the launches that come from Google. Now, however, he holds the actual crown—even if Page and Brin are keeping the royal treasure. With any luck, though, maybe Pichai will improve Google, not just by creating more innovative software, but by bettering Alphabet’s approach to security, designing tech with human decency in mind, and actually owning up and responding to some of the company’s mistakes as they come.
It’s unlikely and perhaps foolishly optimistic, but it’s a silver lining that users can grasp onto given the (albeit somewhat empty) change in Google’s leadership.
A Story that’s Getting Old, Lies and Deception are Flooding All Outlets on Precipice of 2020 Election Year
Over the past few months, false videos on YouTube posing as established American news outlets have garnered millions of views. Selling themselves as CNN or Fox News, these fake accounts present inflammatory and fabricated content to their viewers, effectively deceiving the American public by spreading misinformation.
The Google-owned YouTube says they have taken down as many of these videos as it can, but companies such as CNN insist that the website needs to do more to proactively inhibit such activity. After all, the source of the problem is rooted deep within the very fiber that keeps YouTube (and the current monopolized Internet as a whole) running.
What is really going on in the YouTube case is an exploitation of two fundamental aspects of the Internet. Namely, these fake accounts are taking advantage of the web’s free ranging platform, and they are manipulating the data-based algorithms that keep the Internet efficiently feeding billions in ad revenue to the platforms like, google search, YouTube, Facebook and Amazon.
The web’s “free” policy refers to the fact that anyone can post anything on the Internet, although “free” in this case is a deceiving concept. Long before the Internet was a global phenomenon, the system was built upon a somewhat libertarian foundation where all users had equal access and unrestricted contribution power to information. The potential fault in this model, however, is that there is little accountability or security. As we are seeing today, with so much unchecked info, lying becomes easy and the line between true and false greys.
Algorithms are the Gatekeepers, Automation for Advertising Dollars
As for the algorithms, websites like YouTube, Google, Amazon, Facebook, and so on, depend on formulas that learn more about you the more you use them. A term that is gradually beginning to become more important but not yet fully understood, an algorithm is a set of instructions, managed by Artificial Intelligence.
The key point is that the companies mentioned above maintain total secrecy as to the settings of the algorithm, however, by viewing the public results it is clear that in all cases the algorithm is programmed to benefit advertisers, and thereby increase profits for the companies.
As per wikipedia:
“In mathematics and computer science, an algorithm is a finite sequence of well-defined, computer-implementable instructions, typically to solve a class of problems or to perform a computation. Algorithms are unambiguous specifications for performing calculation, data processing, automated reasoning, and other tasks.”
This is how YouTube recommends videos for you, Facebook shows you suggested posts, Amazon advertises things that fit your taste, and Google can anticipate your searches before you even type anything in. It is based mostly off of your previous use—your activity provides data that these tech companies manipulate, own and sell (which you unwittingly agreed to by clicking the ubiquitous “terms of service” agreement).
However, as the access to Internet platforms, and therefore the ability to interact with others, has become a virtual monopoly controlled by the platforms, the ethics surrounding data rights and algorithms have become less clear.
Most Internet users have allowed access to their personal information in some way or another. Through “free” email accounts, social media, messages, pictures, purchases, and so on, your entire identity is encrypted somewhere in the cybernetic ether, and you have little control over it.
The consequences of this go beyond just getting offered offensive videos or unsolicited ads. The companies that made the bogus CNN accounts, for example, cleverly played YouTube’s algorithms so you would be redirected there after watching legitimate news stories. Because the majority of people consume news through their computers, fake news and real news have become increasingly difficult to distinguish.
More and More Political Manipulators are Gaming the Algos
Moreover, these misleading accounts are not always coming from Internet trolls. Some of them are run by malicious enterprises or foreign governments trying to influence geopolitical processes. Such was the case behind the now well known, infamous case of Cambridge Analytica’s interference in the 2016 Presidential Election.
Cambridge Analytica—a British political consulting firm—marketed for the Trump campaign using people’s Facebook data. At the height of the campaign, the company allegedly consulted with Russian officials to assist in Trump’s eventual election.
Due to the algorithmic control of websites like Facebook, once Cambridge Analytica had information on a single user, it was able to acquire information on every person that that single user ever interacted with online. Via just a handful of connections, the company was able to quickly collect data on nearly the entire nation. Thus, even if you avoided all of Cambridge Analytica’s tricks, you could still be targeted through just a few degrees of separation.
There is really no way of knowing who Facebook is sharing your data with or how they are using it. In fact, you don’t even know what your own data is, as most websites bar their users from accessing the very information that they provide. The only way to find out how you are being targeted is by consuming the suggested version of yourself that these tech companies feed back to you.
The situation is certainly eerie on a personal level, but it also transcends the individual to impact phenomena on a far greater scale. With the Trump administration as evidence, Cambridge Analytica’s approach obviously worked in some capacity. Likewise, businesses and organizations can manipulate data to promote their version of the world. Through the unrestricted world of the Internet, powerful users can alter history, conflate truths, and shape the American psyche into thinking whatever they deem real.
Certain sectors of the government have been working to try and fix this problem. Mark Zuckerberg has gone before Congress to answer for Facebook’s place in the Cambridge Analytica case. Likewise, the California Consumer Privacy Act will take effect on January 1st, giving people greater personal data rights in the Golden State.
Don’t expect the companies mentioned above, having a combined market value of more than $3 trillion, to cooperate or rein in this problem voluntarily. This algorithmic dictatorship benefits criminals like those that were behind the Trump election meddling, but most of all the system benefits the platforms themselves, at a level that is mind-bogglingly obscene. This system will change only when they are broken up or gone.
Data is the most profitable resource on the planet (recently topping oil), and it is because of our data inputs that Google and Facebook, among others, remain “free” websites. The real price for online “services” like search and social platforms is very high indeed and users are getting scammed out of more than they may realize.
Ultimately, like in politics and life itself, it is the masses, the users themselves in this case, that can decide if they want an algorithmic dictatorship, or if it is time to sweep away the current dysfunctional system and replace it with one where the price is not so steep.
Another batch of Fraudulent, pro Trump Social Media Manipulators are Identified and Removed, for now
In blog posts from Twitter and Facebook the removal of a large number of fake accounts and actors were announced. On Twitter the number of accounts was nearly six thousand which were part of a larger network of 88,000.
The announcements were detailed and each provided data on the techniques used, including the use of A.I. generated photos. The Twitter accounts were also confirmed to be Saudi-Backed and propagated by a social media “marketing” company called Smaat that was operating on behalf of the Saudi State.
All related parties have been banned, although it is hard to imagine that it will be difficult for them to resume a similar campaign behind a different front. The blog posts appear to be an effort, at the least, to show that the companies are attempting to monitor this kind of dangerous propaganda.
“We exist to serve the public conversation around the world. To this end, we’ll continue to take strong enforcement action against any state-backed information campaigns which undermine our company’s mission, principles, and policies.”
– Twitter blog Post
As for Facebook and Instagram, the “Coordinated Inauthentic Behavior” that was removed was said to originate in Vietnam, Georgia and the U.S. Georgia, of course is the former Soviet republic that Trump was in negotiations with, around 2012, to build an eponymous tower (with help, allegedly, from Russia).
Vietnam, on the other hand, is the communist country alleged to be a likely cover for Chinese and Anti-Chinese actors. In this case Facebook has linked the activity to a company called BL which Facebook connected to the Epoch Media Group. These groups manipulated content using coordinated inauthentic behavior, spam and misrepresentation as well as other activities that violate Facebook and Instagram policies.
All parties involved have been permanently banned. In total, again according to the blog post, the various parties in each network spent approximately $10 million on advertising, using various currencies, including $US, Korean Won, Vietnamese dong, Indonesian rupiah, Australian dollars, the New Taiwan dollars and Canadian dollars.
It has become clear, in part through investigations during the Trump Impeachment hearings, that international interference in U.S. politics, far from being on the wane after the Russian pro-Trump interference in the 2016 elections, is set for a potential explosion into 2020.
The concept that appears to be going through the minds of nefarious actors across the globe is: “if it worked once, why not continue and expand”. Regardless of a provable, direct connection to Trump, there are many interested international parties that have agendas that allign with a Trump victory in 2020.
Deeper Issues Arise as this Example is Likely Just the Tip of the Iceberg
As many have pointed out, Trump faces possible prosecution and incarceration if he fails to win the 2020 election, so the stakes are very high indeed. That, combined with an obvious disregard for rules or laws of political campaigns, let allow social media, there will undoubtedly be many more instances of fraud and “inauthentic behavoir” from here on out.
This is exactly the issue that Democrats pointed during the impeachment process and which made impeachment not only necessary but a requirement. Based on the circumstances clearly indicating that Trump is likely to repeat or attempt to repeat the same actions and behaviors, including high crimes and misdemeanors, and encourage, if not engage in actions such as the Russian interference that got him elected in 2016.
“Shall the man who has practiced corruption & by that means procured his appointment in the first instance, be suffered to escape punishment, by repeating his guilt?”
— GEORGE MASON IN A DEBATE ALSO ATTENDED BY JAMES MADISON, JULY 20TH, 1787
Now, the billion dollar question is, if social media companies doing voluntary self-policing, turning down tens of millions of dollars (if not far more) in advertising revenue, and spending on departments and programs dedicated to monitoring this fraudulent spam and worse, can be counted on to do all of this and more for our benefit?
After Facebook refused to take down a political ad, paid for by Trump backers, known to be false, and not significantly different from the bogus content that Facebook reported today by foreign actors, can they be trusted to thoroughly and adequately monitor such massive networks and remove offenders before more damage has been done?
And what of the life of lies, such as imaginary “investigations” that keep cropping up against Democratic candidates that are potentially running against Trump in 2020?
The example posted by Facebook invents an investigation into Elizabeth Warren and another related to Nancy Pelosi, goes on even after the accounts are deleted and banned. I had seen the anti-Warren fabrication on twitter and, disregarded it, as it seemed superficial and implausible, yet now it is also proven be not only fake and fabricated but posted by foreign criminal actors with a pro Trump agenda.
This brings up the larger issue, one of reader and prospective voter sophistication. The huge question that arises over and over, as the Trump lies and crimes are cataloged and ajudicated, is how anyone could believe this man, let alone believe in him.
The answer is, unfortunately, sad and depressing for our future. Just as Hitler was accepted and even loved by most of the German population before he ultimately led them and himself to a dead end, the blind belief and naive “loyalty” of people can never be overestimated.
Those ridiculous stories about Ukraine conspiracies spread by Putin and propagated by Trump himself and then on to his various followers, themselves both imaginary and some real (but hypnotized and deluded), will likely still be quoted by fools and evil, self-serving sycophants for years to come.
That is, unless the 180 million plus Americans, and their allies around the world, who know better and see the danger that Trump represents in all its horror, find a way to drown the lies in an even larger deluge of real news. And, once rid of this would-be dictator, never let apathy and social media fraud control another election. 2020 preview or fantasy from neverland?
Literally Trillions are Staked on a Carbon Nightmare Future
Saudi Aramco is Saudi Arabia’s largest national oil company and one of the wealthiest, if not the wealthiest, corporations in the world. On Sunday, November 30th, 2019, Saudi Arabia’s Capital Market Authority stated that Aramco is going to be turned into a publically traded corporation and start making initial public offers of 1 to 3 percent of its shares sometime in December.
Saudi Arabian Crown Prince Mohammed bin Salman initially boasted the Aramco’s worth at $2 trillion. Further research, however, deems the valuation somewhere between $1.3 and 1.7 trillion. Nevertheless, these enormous figures—mixed with the projected IPO of $8.53 per share—still make Aramco more fiscally valuable than Apple or Microsoft.
Putting Aramco in the public sector is a huge move for Saudi Ariabia’s economy and is inextricably linked to the Crown Prince’s “Vision 2030” socioeconomic reform plan for the kingdom. It will make oil a larger money-maker than it already is for the nation by attracting additional foreign investors and combatting the shift towards alternative energy sources.
At the same time, though, this move is not the most environmentally progressive, and although it creates a short-term economic boost for the country, it may not be sustainable in the long run.
Right now the world is trying desperately to reform its energy practices and emissions standards. The 2015 Paris Climate Accord outlined bold plans to address the global climate crisis and currently, the UN Climate Conference in Madrid is working on updating and evaluating those goals. A big part of these initiatives puts focus on transferring global energy away from fossil fuel burning and towards cleaner and more renewable sources and methods.
While Saudi Arabia has made some investments in alternative energy sources, it remains overwhelmingly focused on oil—its most profitable commodity. The nation’s slight investments in solar power are dwarfed compared to its ongoing oil extraction. Then, even when the country does employ solar energy, it often uses it to fund or power oil wells and refineries.
When asked about Aramco’s response to the Paris Climate Accord, the company’s Chief Executive Amin Nasser practically laughed it off, boasting that with all other parts of the world being held to stringent energy conditions, Aramco would easily become the global leader in gas.
Not a Question of When but rather How Fast can the World Switch off the Oil Pumps?
The corporation should not be so quick to celebrate, though. While the planet still has a long way to go when it comes to environmental protection and security, more investors are turning away from oil and starting to consider alternatives. With the scarcity and conflict surrounding the resource, oil is becoming less reliable. The recent surge in electric vehicle adoption is just one example of alternative energy sources affecting the oil economy.
Nasser responded to this observation by calling it a “crisis of perception” facing oil firms. Cynically, he explains that ideas of oil going away anytime soon is a highly exaggerated theory, and that fossil fuels remain the most secure form of energy.
Perhaps this is the case for now. But if big oil continues to pump the Earth without regard for ecological fragility, then there will eventually be nothing “secure” about the practice at all, and economic influence will mean quite little in the face of Armageddon. All humans will be affected, not just the “green” ones.
Even in less dramatic terms, studies suggest that “Peak Oil” will arrive at some point in the next twenty-five years. When this happens, it will severely hurt Aramco’s prices, as demand will go down and investors will have a greater economic incentive to move on from oil. The company will not seem so high and mighty when that happens. Geopolitical dangers will almost certainly rise.
All of this is not even to mention the socio-political risks that come with investing in Aramco. Environmental issues aside, Aramco still faces international competition with the U.S. and Russia, stagnant output for the past five years, warlike attacks from Iran, and a lack of corporate autonomy against the Saudi Arabian government.
From an immediate money-driven perspective, investing in Aramco might seem like an easy buck and a booming economic development for Saudi Arabia. However, money (like oil wells) can dry up quicker than one thinks, and when that happens, investors might be left with nothing in their pockets but a long list of political, sociological, and environmental problems.
Amazon finally Admits to Facilitating Safety Issues and Fakes in Online Product Listings
Chinese products listed on the e-commerce site have been known to present a multitude of issues for US sellers on the platform. Consumers are also put into potential risks whenever purchasing an item from overseas on Amazon’s site. Counterfeits, unsafe goods, and items that lack the necessary US FDA approval, despite including the logo, are among some of the problems that have frequently occurred.
On the U.S. site, Amazon doesn’t require a seller’s locations to be disclosed, which makes it harder for Chinese sellers to be held accountable when fake and unsafe goods are identified after shipping.
When consumers attempted to sue Amazon in court proceedings in the past, Amazon’s argument was that they held no burden on product liability, claiming that the items in question were neither manufactured nor sold directly by the company and that they merely allowed those items to be listed for sale.
An extremely dangerous case happened when a customer purchased a hoverboard on Amazon from a third party seller and the board exploded and resulted in the buyer’s house catching on fire and burning down. In that 2016 court proceeding, Amazon won the case and was not held responsible.
However, for the first time ever, Amazon is finally admitting that such risks actually exist. The 2018 Securities and Exchange Commission (SEC) file stated “Under our seller programs, we may be unable to prevent sellers from collecting payments, fraudulently or otherwise, when buyers never receive the products they ordered or when the products received are materially different from the sellers’ descriptions. We also may be unable to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated, or stolen goods, selling goods in an unlawful or unethical manner, violating the proprietary rights of others, or otherwise violating our policies”
Whether Amazon can be held liable in court for damages that result from this passivity appears to be another story.
Mysterious Third-Party Chinese Vendors Lack Accountability on Amazon’s Seller Platform
Chinese sellers within the Amazon marketplace could represent a significant portion of the third-party sellers. Although Amazon does not publicly disclose any data of sellers’ location on the Amazon.com US site, according to Market Place Pulse, approximately 38% of the top sellers are based in China and 44% of China sellers were calculated among the 5 marketplaces (France, Germany, Italy, UK and Spain).
The majority of Chinese sellers, more than 79%, utilize Amazon Fulfillment (FBA) services that allow for customers to receive items quickly. This has resulted in US sellers struggling to compete in the market while also allowing customers to experience the same shipping experience regardless of the products’ origin.
Legitimate US Companies Can’t Compete with Rampant Flock of Fraudulent Chinese Vendors
This insurgence of sellers from China are affecting US sellers that have sold products imported from overseas because they are not able to provide competitive prices against Chinese suppliers that are now selling the same products on the site.
In an interview with the WSJ, a US based company that sells goose-feather duvets claims that they’ve struggled to compete with Chinese sellers that claim to sell the same quality goods but are counterfeits. This US company bought the Chinese “equivalent” and had the materials tested and found that they were duck feathers, instead of its proclaimed goose-feathers, and were being sold at a fraction of the price.
These deceptive listings not only hurt the customers that believe that they are purchasing one thing but actually receive another, but they are also killing a number of legitimate companies’ chances to make a living. The company brought the testing results to Amazon’s attention and the counterfeits were removed. However, the burden of responsibility in locating vendors that sell “fakes” should not be on the third party seller’s shoulders.
Consumers have also been deceived into thinking a product is great based on 5 star feedback when, in actuality, a string of companies have been proven to directly influence inauthentic reviews by bribing customers with gift cards in exchange for a high rating.
Nike Shoe Steps on Sad Amazon – Photo Collage / Lynxotic / Upsplash
Just Do It – Nike Dunks on, or Rather Dumps Amazon
In 2017 Nike participated in a pilot program to test out selling a small sampling of its products on the Amazon e-commerce site. Now, in late 2019, Nike made the decision to end that relationship, one that will have only lasted a little over two years. This parting will mean that Nike will no longer sell any of its merchandise directly through Amazon.com.
In a Yahoo Finance interview with the President, Heidi O’Neil, she explained, “We have ended our pilot with Amazon — it comes back to being incredibly committed to amazing experiences for our consumers, direct relationships and building unbreakable relationships. We want to move forward and make sure we continue to innovate on our own platform.”
Nike’s separation from Amazon comes at a time when Nike has also made internal changes to its leadership. Heidi O’Neil has been President of Nike Direct for one year (working within Nike in the marketing department for 20 years). Mark Parker current CEO will soon be stepping down and taking on the role of executive chair and be succeeded by John Donahoe at the start of the new year on January 13, 2020. Donahoe was the former CEO of eBay and current chairman of PayPal, his experience with e-commerce and online payment systems will surely serve Nike well.
Sharing Customer Relations is not what Amazon was Built On
Nike’s shift away from Amazon serves the company’s larger mission to provide stronger customer relations. Using a direct-to-consumer (DTC) business approach, the aim is to sell more Nike products through its own website and stores – which is something not possible when partnering with Amazon.
Since making a purchase through Amazon, all points of communication begin and end and are funneled through its platform. If any third-party vendor (even Nike) required additional information from a buyer or wanted to reach out to establish more of a relationship with customer – this involves, at best, a shared information system as the customer is deemed, by Amazon, to be its own, regardless of what brand they are purchasing. This stranglehold of customer data allows for Amazon to keep control in the purchasing process from start to finish.
In addition, companies that sell on Amazon and have repeat business on the platform do not reap the customer relation benefits, instead Amazon asserts control of that customer relationship.
Nike’s status as a well-established brand fortunately does not necessarily need to rely on Amazon’s fast shipping and low prices in order to its attract customers – instead the company can focus more on its desired goals to bring about “unbreakable relationships” with those that sport Nike footwear and branded gear.
After Nike’s exit from Amazon, things can only get better: For Nike
Nike counterfeits and unauthorized sellers have always been a concern for the company and was a major discussion point prior to entering into the pilot program with Amazon. Brands that do not sell directly on Amazon are often faced with resellers filling that gap. Grey market goods and resellers with fake or counterfeit products have been a major problem with Nike related products – even conducting a simple Amazon search for Nike products will yield many a reviews that point out the above issues.
“The move shows us that strong brands realize that traffic driven to their own site is self-sustaining, more profitable, and actually brand enhancing, while traffic and incremental revue from Amazon.com is less profitable but also less brand enhancing.”
– Randy Konik, Jefferies & Company ANalyst
Although Nike will cease listing on Amazon, the e-commerce site will still have third party sellers that hold Nike products available for purchase, which leaves the door open for problems relating to authenticity that customers will have to risk if they purchase on a site other than Nike.com.
The counterfeit issue within the Amazon marketplace has been such a rampant problem that another large name footwear brand, Birkenstock removed its products and no longer sell on Amazon as of 2016.
Nike, as one of the best known product lines to leave the online-selling platform is sure to affect Amazon’s future attempts of attracting other big name brands.
Randy Konik a Jefferies analyst spoke about Nike’s departure: “The move shows us that strong brands realize that traffic driven to their own site is self-sustaining, more profitable, and actually brand enhancing, while traffic and incremental revue from Amazon.com is less profitable but also less brand enhancing.”
Consensus Building Rapidly Against the Business Models of Internet Giants
Earlier this week, Amnesty International, a non-governmental organization from the UK, called Google and Facebook’s practices of omnipresent surveillance on people around the world an “assault on privacy.” The organization, which focuses on human rights, recently released a report outlining how these two major tech companies hold too much power and should change their business models to stop infringing on users’ personal information.
Amnesty International’s accusations may seem extreme, but that does not mean that they are inaccurate. While Google and Facebook might appear to be free websites, the reality is that you pay for their services with your data. Whenever you search for something, you feed the sites information—information that they can sell, manipulate, market, or use for a countless number of other things, some of them perhaps unethical.
The upside is that data is cheap, and therefore these websites are not about to start charging you. The downside, however, is that there are really no limits to how tech juggernauts like Google or Facebook (or Apple, or Amazon, or Microsoft for that matter) use the data you provide them. No concrete laws in the United States monitor these companies’ use of data, and given that the Internet was built as a place of free-flowing information, there are no internal boundaries that stop these websites from taking full, unrestricted advantage of your information.
This is not the first time that Facebook and Google have been called out for issues regarding privacy and cyber-ethics. Facebook founder and CEO Mark Zuckerberg has found himself before Congress on more than one occasion recently. Ever since it became known that Cambridge Analytica used web data to falsely advertise on Facebook during the 2016 elections, the social network’s surveillance tactics have been in question.
Benign Monarchs? Not Likely.
As for Google, the website practically has a monopoly on web-searches across the world. The search engine accounts for 90% of the Internet searches on Earth, and it is not always transparent about what it does with the resulting data. With such huge numbers, though, Google can afford to distribute your extensive information to just about anyone—even government organizations or institutions with malintent.
The two companies usually respond to these kinds of accusations with vague optimism about current and future cyber-safety. Google claims to have changed its model within the last year, making the site more user-friendly and giving its patrons more control. Meanwhile, Facebook has largely stood its ground when it comes to online freedom. Zuckerberg and other Facebook officials have suggested that they will heighten security, but they simultaneously stand by that censorship on any scale is constrictive and antithetical to the website’s intent.
Facebook also owns Instagram, Messenger, WhatsApp, and several other websites/apps that are used across borders, making the issue a conglomerate and worldly one. Although they are both American companies by origin, both Facebook and Google are international entities. Thus, creating laws around their practices is a complicated and culturally sensitive process.
At the same time, though, these enterprises have been going unchecked and unchallenged for well over a decade now. When they started, the digital world was much smaller and very different than it is now. Technology has changed, and so has the world— now the rules that govern it must follow suit.
Whenever a solution to climate change is proposed, one of the first questions is “how much does it cost?” Perhaps the premiere reason that the world perpetually fails to prioritize the climate crisis is because of money; countries, corporations, and individuals around the planet do not want to spend more in order to combat an issue that feels so removed.
This, however, is a paradox. When the effects of climate change come to fruition (as if they have not already), they will affect everyone. The environment will not discriminate. Obviously, developing nations with low GDPs will be the most vulnerable to the nature’s wrath, but the impact will make a dent in the global economy, hurting everybody’s wallets.
A new study from the Economist Intelligence Unit says that over the next generation, climate change could reduce the world’s economic growth by 3%. It will hit parts of Africa, South America, and the Middle East most severely, but it will also affect wealthy parts of the world in significant ways.
The United States, for example, could see its growth reduced by 1% in the next thirty years. If global temperatures continue to rise, that figure could increase to over 10% within the next century.
This should be an economic wake up call for governments and people around the world to start taking the battle against climate change seriously, and to start investing in the fight now because the cost is only going to go up over time.
The fact that 2019 is likely to go down as one of the hottest years on record should also signal that global warming is not as removed as some might think and thus demands more immediate action. Events in 2019 such as the floods in Venice, the wildfires in California, Hurricane Dorian, and the ongoing melting of the polar ice caps have already cost the world billions of dollars. Natural disasters like these will start happening at greater frequencies as carbon emissions increase—and the money will keep pouring out of our pockets as a result.
Sadly, another study (this one from the UN Environment Programme) reports that despite ambitions of sustaining global temperatures at 2 degrees Celsius, we are still burning 50% more fossil fuels than necessary to achieve that goal by 2030. Then, if we change the temperature goal to 1.5 degrees Celsius—as many climate scientists have suggested is required—then we are burning 120% more fossil fuels than needed.
These are harrowing figures not just for our global health, ecosystems, and well-being, but also for our currency. Right now, burning fossil fuels is a big money maker, and switching to alternative energy sources could be costly. If we keep relying on non-renewable energy, though, then we might as well be throwing dollar bills into the furnace. Evidently, our financial and ecological priorities are correlated. Industry, Governments and politicians need to realize this connection and act upon it before it’s too late. And we all need to remind them, as loud and often as necessary.
If you are still having trouble accepting the fact that climate change is real, then you are definitely not factoring in the overwhelming consensus of science. Earlier this week, the academic journal BioScience released a scientific research paper providing data from the past forty years, all pointing to the conclusion that our planet is currently in a state of climate emergency. Then, if the paper’s research is not enough on its own, perhaps the fact that over 11,000 scientists authorized it will help convince you.
At the bottom of the report, there are 11,258 signatures, all coming from different scientists across 153 countries and multiple disciplines. The paper’s multi-disciplinary approach creates room for a variety of evidence, demonstrating how global warming is effecting the planet from geological, biological, physiological, neurological perspectives and beyond.
This is also a wake up call about the fact that the science on climate change is no longer divisive. In science’s unbiased eyes, the Earth is in an unequivocal state of emergency.
“Climate emergency” is the exact diction that the paper uses to define the planet’s current situation. The words associated with climate change have evolved many times over the years. From “global warming” to “crisis,” language can certainly affect the way people think about the issue. The authors of this paper decided on “emergency” because it provokes more urgency than mere “change” but not as much chaotic hopelessness as “crisis.” After all, the purpose of the paper is to unveil proof and evoke action, not to have people helplessly bury their heads in the sand.
The paper outlines six major changes people must enact if they want to save the planet. Namely,
Implement massive energy efficiency practices and move to low-carbon renewables.
Reduce emissions of toxic pollutants such as methane, black carbon and hydrofluorocarbons.
Restore global ecosystems across reefs, forests, grasslands and more while preventing further biodiversity loss.
Reduce the consumption of animal products and opt for plant-based foods.
Focus less on economic GDP growth and more on sustaining ecosystems and human well-being.
Lower fertility rates to reduce the world population.
As the paper makes clear, these changes are hardly suggestions, but more like necessities at this point. If we do not alter our priorities in a timely manner, we will face the worst of climate change’s wrath and be utterly defenseless to it.
Like most realistic studies on the climate crisis, this paper is not for the faint of heart. It opts for harsh truth over optimism. That being said, the research is not without occasional glimmers of hope. The outline of solutions points us in the right direction. Similarly, the authors acknowledge recent surges in environmental protests and eco-friendly ingenuities across the world as ongoing positive changes. Data-wise, fertility rates are already dropping and more people are switching from fossil fuel burning to more sustainable, renewable energy practices. Likewise, even politics are slowly catching on to the issue, with the UK Parliament declaring a climate emergency and United States Reps. Alexandria Ocasio-Cortez and Earl Blumenauer and Sen. Bernie Sanders all introducing the Green New Deal to Congress.
The world is far from perfect, and more action is still needed if we want to combat climate change effectively. However, the science is nearly unanimous, and the debate surrounding the issue’s severity is no longer a point of contention. Now, we just need people in power to stand with science, believe in the facts, and put in place urgently needed changes to begin to find ways to save us all from possible extinction.
After their Destructive Secret was out, Exxon Mobil had yet to face Accountability until Now
It is no secret that Exxon Mobil hasn’t been the kindest to the planet over the years. The big oil company is one of the nation’s most prominent gasoline providers, and fueling automobiles is the world’s leading purpose for fossil fuel burning and the foremost cause of greenhouse gas emissions.
For years Exxon has gone unchecked for the environmental damage they have done as a company—after all, they were never really doing anything illegal. However, former Exxon Chief Executive Officer and U.S. Secretary of State under President Trump, Rex W. Tillerson is currently in hot water. The man is facing two legal battles, one in New York and one in Massachusetts, for allegedly lying to investors about the risks and impacts of global warming.
The Case Casts the Primary Offense towards their Investors, not the Environment
At last, Tillerson may be held accountable, but these are not environmental trials per-se. Instead, they are hitting the oil tycoon where it really hurts: his wallet. And the cases are not about compensating for ecological destruction, but something far more pertinent to those who navigate the corporate world: money.
In both New York and Massachusetts, Tillerson is accused of knowingly providing investors with false information about the climate crisis. Reportedly, Tillerson sold climate change as underwhelming, insignificant, and perhaps even good for business. Meanwhile, he depicted Exxon Mobil as a champion of environmentalism. While the company does do some philanthropy in that area, these statements clearly omit some essential details, namely that Exxon does far more harm than good for the natural world.
It may be a Fraud Case, but Tillerson’s Case could be a First Step towards an Environmental Win
Thus, the trial is really just a fraud case, a dry instance of one person deceiving another for financial benefit. These cases happen all the time and usually do not garner much attention. Given Tillerson’s prominence, though, and Exxon’s dodgy history in the battle against climate change, this particular fraud case has made some noise. While Tillerson argues that the press attention is unnecessary, pandering, and based on corporate stigma rather than facts, many environmentalists are happy to see a big oil company put on the stand and questioned about its impact on the planet.
At the end of the day, the trial is mainly about money, but the larger implications of Tillerson having to answer for Exxon’s climate denial involves something much more significant. Trojan-horsed as a fiscal wrongdoing, Tillerson’s current predicament stands as a testimony to environmental justice and shows that rich business executives are not immune to consequences.
If all this is confusing, that’s probably because major corporations usually try to mask these muddy legal situations with jargon and loopholes in order to maintain their quality public images. Right now, however, Tillerson may be caught in a trap, and Exxon’s lies, deceits, and blatant disregard for scientific accuracy are finally becoming apparent in black and white, even if what really brought him to the stand is printed in green.
Zuckerberg stumbled and evaded while attempting to respond to AOC on Facebook Behaviors and Policies, especially its Political “Lie Exemption” Policy
While Mark Zuckerberg’s controversial Libra cryptocurrency project is what initially got him into the House for another hearing on October 23rd, the House Financial Services Committee Members took this as an opportunity to express their concerns about Facebook’s paramount involvement in a variety of controversial issues.
Each committee member was given five minutes to address their Facebook policy concerns with Zuckerberg, and they did not waste their time, especially Alexandria Ocasio-Cortez as she interrogates him regarding Facebook’s influential role in endangering the nation’s democracy and general safety.
Here’s a brief rundown of the topics she addresses that continue to put Zuckerberg and his insidiously dangerous Facebook ‘megaphone‘ under hot water to this very day:
Libra Cryptocurrency: Another Scam to hide behind an Outsourced Entity in order to Evade Accountability? This time, he’s going for the Poor and “Unbanked”
On June 14, 2019, Zuckerberg released his plans to launch a cryptocurrency project called Libra on Facebook, and since then, it’s been facing a lot of criticism from the government and anti-trust regulators.
The Libra cryptocurrency is a part of Facebook’s future mobile payment system, proposed at Facebook’s annual developer conference in April. The crypto currency project aims to allow Facebook’s 2.4 billion worldwide users to exchange payments with minimal fees and without the need for a third-party software.
“It’s not that Facebook is evil, which it may or may not be. Facebook hasn’t shown an ability to think through unintended consequences or prevent bad actors from weaponizing its platform.”
ScotT Galloway, Marketing Professor at NYU, Author of “The Four”, well-known for his unsparing critiques of influential tech companies
But, while the idea appears to have good intentions behind it, much like many of Zuckerberg’s other ideas, the problems and potential dangers are in the details.
So, the real issue is in how the Libra cryptocurrency project can potentially influence Facebook’s extremely wide global user base in a number of negative ways.
“If 50 percent of Facebook users all of a sudden use this coin, then you potentially have a new reserve currency globally. If you would weaponize a global currency and start monkeying with it, you could have what capitalists fear more than war: a recession–or some sort of a global economic meltdown.”
SCOTT GALLOWAY
California Representative Congressman Brad Sherman interrogated Zuckerberg extensively on this topic during the Financial Services Committee Hearing, which illustrated these repercussions specifically.
Brad Shermon eloquently points out a pattern that Zuckerberg struggles to answer. He appears to be attempting to hide behind platitudes of egalitarian ideals in order to avoid accountability for content controlled by his platform.
“…but for the richest man in the world to come here and hide behind the poorest people in the world and say that’s who you are trying to help, you are trying to help those to whom the dollar is not a good currency—drug dealers, terrorists and tax evaders..”
Rep. Brad Sherman to Zuckerberg at the House FInancial Services COMmittee Hearing
Cambridge Analytica: AOC cites Facebook’s Biggest Scandal that brought ‘Catastrophic Impact’ to American Democracy in the 2016 Election
But the House Financial Services Committee wasn’t having it, and AOC Exposes Facebook’s Flaws for All to See:
"So, you won't take down lies or you will take down lies? I think that's just a pretty simple yes or no."
Complete exchange between @RepAOC@AOC and Mark Zuckerberg at today's House Financial Services Cmte hearing.
Alexandria Ocasio-Cortez begins her five-minute interrogation by citing Facebook’s Cambridge Analytica Data Scandal from 2018. Her reasoning is that, before even considering the Libra cryptocurrency issue, it’s important to analyze how Facebook handled Cambridge Analytica because the Libra cryptocurrency project has potential for far worse.
Essentially, AOC gave Zuckerberg a chance to make a case for himself. He had an opportunity to show that he and Facebook are equipped to adequately deal with the repercussions of establishing Libra, and to answer this fundamental question: has Facebook learned from its past mistakes regarding the Cambridge Analytica Data Scandal so that they could take the necessary actions to ensure that data scandals won’t happen again?
Next she asks, what year and month did Zuckerberg first become aware of Cambridge Analytica? He doesn’t remember, but it was probably around March 2018, when the scandal became public.
When did Facebook COO Sheryl Sandberg become aware of Cambridge Analytica? Again, Zuckerberg says he doesn’t know, so AOC asks a follow-up question. Did anyone on his leadership team know about Cambridge Analytica prior to when the initial report came from The Guardian on December 11, 2015? Now, for this one, Zuckerberg believes that this was the case and that members of his leadership team were tracking it internally. Additionally, he takes this opportunity and appears to try to avoid responsibility by saying that he was aware of Cambridge Analytica as an entity, but he also wasn’t aware of how they were using Facebook specifically.
When was the issue discussed with his board member Peter Teal? Once again, Zuckerberg proclaims his ignorance, to which AOC iterates that his answers are unacceptable. It is unacceptable that he did not properly discuss the “largest data scandal” with respect to his company that had “catastrophic impacts on the 2016 election.”
While Zuckerberg flaggingly scrambles to defend himself by explaining that they did discuss the issue when it happened, he fails to answer whether Facebook is capable of being accountable for their actions by addressing their mistakes with handling data privacy so that they wouldn’t be repeated. If Facebook truly cared about handling data privacy, then they would have taken extensive measures to address the issue. Maybe then, Zuckerberg would’ve actually remembered enough about the issue to answer AOC’s questions.
Facebook Policy allows Politicians to Pay to Spread Misinformation
Zuckerberg’s seemingly flagrant irresponsibility with regards to handling Facebook leads AOC to confront him on the current hot topic: “Facebook’s official policy to allow politicians to pay to spread disinformation in 2020 elections and in the future.” She demands to know how far this policy could be pushed before Facebook decides to fact-check and take down these posts, because, again, they have the potential to influence the next election directly.
Could politicians enact voter suppression by advertising wrong election date to zip codes with primarily black communities? Zuckerberg vaguely explains that content will be taken down if it were to cause an obvious immediate harm. Okay, but what if it’s not obvious? Will his answer suffice then? The answer is likely no, because infinite ways can be found to dodge this issue, then, once again, and we’re back to square one.
Further she presses him, Could she (AOC) run ads targeting Republicans in primaries saying that they voted for the Green New Deal? Zuckerberg is unsure, but answers that she probably could. Elizabeth Warren recently did something similar in her “Zuckerberg Supports Trump” ad.
Does Zuckerberg see the potential problem here with a complete lack of fact-checking on political advertisements? To that, he appeals to common morals: lying is bad. His logic is that he doesn’t want to prevent constituents from seeing that politicians had lied, which clarifies that Zuckerberg won’t take these ads down.
The problem with this logic is that the general public is assumed to have the ability to differentiate between lies and the truth. But, as this current presidency has proven, many, if not most, people clearly do not.
Thoughts on Zuckerberg’s On-Going Dinner Parties with Far-Right Figures? Debatable, or so he tries to imply.
Further, Zuckerberg’s on-going dinner parties in which he cultivates relationships with known politically far-right figures is also suspicious. After all, there have been numerous times that alt-right entities abused social media platforms in the service of discrimination and hate crimes.
Did Zuckerberg discuss the alleged social media bias against conservatives, and does he believe that this bias exists? Zuckerberg indicated that he couldn’t remember the question or answer it, appearing to want to avoid confirming or denying these associations under oath, so AOC moved on.
Next she asked Zuckerberg to explain why he named the Daily Caller, a publication well-documented to have ties to white supremacists, an official fact-checker for Facebook? Once again, Zuckerberg tries to escape responsibility by saying that they don’t actually appoint independent fact-checkers and that they come from an independent organization called the International Fact-Checking Network (IFCN) that has rigorous standards for who they allow to serve as a fact-checking entity.
White-supremacist-tied publications meet a rigorous standard for fact-checking? Zuckerberg had no answer, which is again, an indicator that she had pushed him into areas he would prefer to avoid. After research, it turns out that he lied, or at minimum mis-led in his answer on multiple points, First, the (IFCN) have generally “certified” a total of 62 organizations globally, but it is, indeed, Facebook and presumably Zuckerberg personally, that chose the 6 in particular that are Facebook partners.
There’s a Pattern Here: Facebook and other Social Media Platforms Need to be held Accountable
Clearly, Zuckerberg still thinks that he could get by with excuses in an effort to absolve himself from the endless blame that Facebook receives from The Media for meddling with numerous socially-influential affairs.
It’s hard not to notice that while Mr. Zuckerberg has been given many chances to make amends for Facebook’s failures, the opportunity has been for naught, apparently, because his private for-profit company is only interested in maintaining user engagement, which he now claims is in the name of free speech and equality. However, clearly, these cannot actually be achieved without specifically executing processes that address the discriminatory practices.
Imagine a Monster Dictator who claims he wants to Free us all from “Traditional Gatekeepers” while he Controls the Ultimate Gate with Iron Fist
Here, a man who almost single-handedly controls the world’s largest social network – with users counted in billions, implies that there is any connection whatsoever with heroes of the history of journalism and what is now disparaged as “The Media” but was once called the 4th Estate.
People having the power to express themselves at scale is a new kind of force in the world — a Fifth Estate alongside the other power structures of society. People no longer have to rely on traditional gatekeepers in politics or media to make their voices heard, and that has important consequences.
– Mark Zuckerberg
Claiming that, somehow, thousands of independent newspapers with tens of thousands of writers and editors, challenging governments and investigating corruption and lies is similar in any way to a digital dictatorship that controls every word or image through its algorithms, and has as its only goal to maximize private profits, is an outrage – and yet this point has only been hinted at in even the most critical coverage.
Express Ourselves at Scale? Really? As long as His Algorithm deems it in Facebook’s Monetary Interest
Mentioning the “traditional gatekeepers” blocking voices, as if his private, for-profit platform has no gate and makes no decision in which voices are heard and by whom is a lie, told in plain sight, so enormous it is shocking.
Except, as he clearly hopes, on hearing vague pronouncements about a fantasy world, most will just switch focus, away from the real way his digital empire functions to some kind of vague discussion of “free speech”. And, in the case of political advertising, speech that he collects millions of dollars to promote and propagate, with no thought of actual free speech that will be drowned out and silenced by his dictatorial decision. That’s the real gatekeeper at work.
Talking about “free speech” as having any role whatsoever on a platform where exposure is controlled 100% by the same network’s private corporate ownership is worse than any Jospeh Goebbles propaganda the Nazi’s ever came up with and is an Orwellian nightmare come to life.
Since Zuckerberg’s speech was clearly designed to confuse and cover up this simple, obvious fact, using Trump style repetition of simple irrelevant lies to influence people to abandon the more complex truths, the underlying truth bears repeating.
I heard #MarkZuckerberg's ‘free expression’ speech, in which he referenced my father. I'd like to help Facebook better understand the challenges #MLK faced from disinformation campaigns launched by politicians. These campaigns created an atmosphere for his assassination. pic.twitter.com/h97gvVmtSZ
Yelling “fire” in a Crowded Theater is of no use if the Crowd can be digitally disappeared at any time
Claiming that “censorship” of “free speech” is not appropriate for a platform that controls who sees and hears that content 100% at all times has to stand as the criminal obfuscation of the century.
As misleading propaganda it is brilliant in its stupidity. To imply that any speech at any time is “free” on a platform that controls access by each and every user at all times is ludicrous at best and vile propaganda at worst.
Have millions of dollars to spend to ensure that your lies are seen by millions? No problem. Have inflammatory disgusting views to share? Sure, the algorithms love anything that increases “engagement”.
On the other hand, as members of the actual 4th Estate found out during the “Great Purge” of 2018, if Zuckerberg & Co decide that you should not be seen for any reason, usually a reason that pertains to increasing profits for Facebook, then you are disappeared, Pinochet style, and can forget about your “free speech” being heard or seen ever again.
Nice way to build a “5th Estate “ to protect us from “traditional gatekeepers”.
We intentionally made a Facebook ad with false claims and submitted it to Facebook’s ad platform to see if it’d be approved. It got approved quickly and the ad is now running on Facebook. Take a look: pic.twitter.com/7NQyThWHgO
Algorithmic Crimes are the Real Story, bigger and worse than Traditional Antitrust Violations
Just mention the word “algorithm” and we all tend to get glossy-eyed and begin to lose interest.
Never mind that the results of your Google search are controlled by algorithms that “decide” what you should be allowed to see or not, while what you may buy is controlled by the private, infinitely biased algorithm employed by Amazon, whose only goal is to increase its own profits at your expense. And then there’s Facebook.
A master of dystopian science fiction would be hard pressed to envision a more sinister, hellish world than the one we already inhabit, where what you think, what you think you “know”, what you believe and what you consume are all controlled by what are essentially robot brains, owned and controlled by evil private corporations with trillion dollar market caps.
And Mr. Zuckerberg has the nerve to talk about “Free Speech” on Facebook? In the words of Greta Thunberg “How dare you!”, and as in the struggle against the powers that profit from the accelerated extinction of future generations, it’s time to end the Algorithmic Dictatorships and, via the real Fourth Estate and free the billions that are, as yet, unknowingly victimized, by whatever means necessary.
According to “a source knowledgeable about the probe” and quoted by Reuters and The Washington Post in stories today, more than 30 attorneys general will announce the investigation next week.
In response to the news Google issued the following statement:
“We continue to work constructively with regulators, including attorneys general, in answering questions about our business and the dynamic technology sector”
Google representative Jose Castaneda
The source also intimated that the probe would be focused “on the intersection of privacy and antitrust”, but did not give any further detail.
In July, the US Justice Department announced that it would begin a broad investigation into the possible anticompetitive practices of the largest technology companies. It has been considered likely that Google, Amazon, Facebook and possibly even Apple would be in the crosshairs.
The Federal Trade Commission, who are also responsible for the enforcement of antitrust violations, is looking into Amazon and Facebook and whether they have abused their dominance in online retail and social media, respectively.
Google, after having large fines levied against them in Europe in March for antitrust violations relating to online advertising, will now face the task of changing the outcome of similar accusations of misconduct in the US.
Amazon also has had difficulties coming out on top in European cases. Only yesterday in Paris, the Commercial Court handed down a verdict against the online giant, resulting in a 4 million euro fine and a demand that 7 key clauses in their agreement with “marketplace seller partners” be brought into compliance with French laws.
Meanwhile, Facebook is also under scrutiny as they are under investigation by the FTC for a potential breach of antitrust regulations. Similar to Google in the European case mentioned above, the probe into facebook involves its social media, digital advertising and mobile applications.
Graphic / Lynxotic / Adobe Stock
In a separate matter, Facebook is also under scrutiny by the European Commission in questions relating to its new Crypto Currency “Libra”. A more general inquiry into its possibly anticompetitive behaviors within the EU in also underway.
Overall, it appears likely that these various probes are only the beginning, as all of the massive tech companies mentioned are already the target of governments and politicians, particularly in the US and Europe.
In a peculiar twist, both Republicans and Democrats in the US seem to agree on at least one thing, that these companies are too big and too powerful and should be investigated at minimum and potentially targeted in antitrust actions for illegal behaviors.
The Trump Administration, AOC, Elizabeth Warren, even Joe Biden have come out in favor of breaking up big tech at the hands of the government, after serious violations of antitrust law have been established.
Most significant aspect is not the tiny fine, but the requirement that Amazon change it’s marketplace seller agreement on 7 of 11 practices that were deemed unfair
In a related development to our opinion piece published yesterday, the commercial court in Paris fined the giant US firm for clauses in it’s mandatory agreement for sellers that were found to be abusive and unfair.
In an exclusive story published (in French) by Next INpact the verdict was explained based on ongoing local coverage of the story.
In the article, which you can read in a google-generated translation provided below, it is noted that, similar to the US marketplace, in France approximately 60% of the income for Amazon’s online retail sales is generated by third-party sellers, using the Amazon Marketplace. Total sales are approximately 5 billion Euros per year.
Screen Shot of the Court Document (can be downloaded as PDF below
Of the 11 clauses that were scrutinized in the suit – 7 of them were deemed to be in violation of:
”Article L442-6 of the Commercial Code prohibits “to submit or attempt to subject a trading partner to obligations creating a significant imbalance in the rights and obligations of the parties”.
– Next Inpact reporting on the verdict in the commercial court of paris
Some examples of the offending clauses are summarized in the verdict, which will sound very familiar to US marketplace sellers:
“one of them allows Amazon to modify at any time, without notice, and in its absolute discretion the contract binding to sellers.
Result: either the seller resigns or he loses a significant share of turnover. A clause deemed “exorbitant of French law and contrary to all uses” concludes the decision.”
Nextinpact.com
“Another clause pinned, the one that allows Amazon to terminate a contract with immediate effect “for any reason and at any time by simple notification.
‘A contractual condition much too “general, discretionary and imprecise”, considers the court which notes the absence of notice and proportionality.”
“In the end, the court ruled that 7 of the 11 clauses pinned by Bercy were clearly unbalanced to the detriment of third-party sellers.“
nextinpact.com
With US anti-trust actions potentially moving forward at anytime, it is doubtful that this ruling, although representing little more than a “parking fine”, will be overlooked by prosecutors seeking to build a future case against the giant retailer.
As follows the full, rough, translation of the original article:
EXCLUSIVE.
The Paris Commercial Court sentenced Amazon to a fine of 4 million euros. The platform is also obliged to amend seven clauses under penalty. In question, the existence of a significant imbalance to the detriment of third-party sellers passing through this marketplace. Next INpact releases the judgment of 2 September 2019. In 2015 and 2016, the Directorate-General for Competition, Consumption and Fraud Control launched several surveys of marketplaces accessible in France. The goal? Gauge this sector and update any anti-competitive or restrictive practices.
Three companies stand out, all related to Amazon: Amazon Payments Europe, Amazon Service Europe and Amazon France Services, respectively APE, ASE and AFS. In December 2017, Bercy revealed his procedure initiated before the Commercial Court in July 2017. The administration recalled the ban on restrictive practices. Article L442-6 of the Commercial Code prohibits “to submit or attempt to subject a trading partner to obligations creating a significant imbalance in the rights and obligations of the parties”.
It claimed for this purpose in particular a civil fine of 9.5 million euros. The importance of this amount is easily explained. The company generates in France a turnover of over 5 billion annually.
And more than the majority of sales (60%) are made by third-party sellers, those using its marketplace. During its investigation, the DGCCRF identified several clauses that constitute a significant imbalance. They relate to contracts linking third party vendors with Amazon.
The jurisdiction of the French courts
Over the 49 pages, only APE, which deals with the part “payment”, could finally be put out of cause, not the other two companies. In this respect, Amazon France Service has been considered as a commercial partner of ASE, associated in the development of marketplaces.
ASE has also tried another circumvention: to oppose to the court the clause that attributes jurisdiction to the Luxembourg courts, while ensuring that two thirds of its sellers would be installed abroad.
The blow of the sword touched the water: the provisions in question being police laws, they are not subject to contractual conditions.
A significant imbalance
In the body of the decision, three points were sought: the existence of an economic bid, obviously unbalanced contract clauses and finally a possible rebalancing for the benefit of sellers in the benefits of using this platform.
The criterion of the tender was retained without difficulty, by the combination of several ingredients. Vendors face non-negotiable clauses. Amazon enjoys an economic power without equivalent.
The site is even essential for small third-party sellers, boosted by the network effect (or snowball).
“Amazon is obviously one of the” superstars “of the Internet, which this network phenomenon explains the exponential growth.
11 clauses were identified by the Minister of the Economy in his procedure.
For example, one of them allows Amazon to modify at any time, without notice, and in its absolute discretion the contract binding to sellers. It is up to the seller to look for this information published in the conditions of the site.
Unhappy, he can still terminate the contract, “but then without having had time to find a substitute,” said the court.
Result: either the seller resigns or he loses a significant share of turnover. A clause deemed “exorbitant of French law and contrary to all uses” concludes the decision.
Amazon was unsuccessful in arguing that trading with 170,000 vendors was impossible in an automated process. What the court told him was that “the automated system, precisely because it is, would work just as well with notice.”
With a certain malice, he also recalls that billions of transactions are made every day and that Amazon is in perfect ability to send them a letter on the order, and another on the state of delivery.
discretionary clauses
Another clause pinned, the one that allows Amazon to terminate a contract with immediate effect “for any reason and at any time by simple notification.”
A contractual condition much too “general, discretionary and imprecise”, considers the court which notes the absence of notice and proportionality.
Similarly, Amazon offers the possibility of imposing limits on salespeople based on “performance factors” without explaining their scope and the consequences of non-compliance with the evaluation criteria.
Still in the same vein, the platform is sanctioned for having the freedom to prohibit or restrict access to the site “at its sole discretion”. According to Amazon, the idea is to fight against the sale of dangerous products.
Only problem, the consular judges have not found this clarification in the contract. Same fate for the part that authorizes ASE to refund a customer even in case of non-return of the product of the third-party seller.
An imbalance not compensated by the benefits removed
In a logic of “balance”, the court then examined whether the imbalance of most pinned clauses was not offset by a series of benefits for sellers:
consumer confidence for Amazon, tools sharpened to facilitate management commercial operations, in addition to the storage of products.
The judges mainly recalled that these different benefits are not offered, but have as counterpart “the level of the various commissions paid to ASE by the third vendors”.
And these different benefits also benefit ASE for its own products and attract more and more third party sellers.
“On the other hand,” he says, “some of the shortcomings, especially those relating to business performance indicators, are such as to allow Amazon Service Europe to use a stipulation to, after testing a new product on a market. launched by a third-party seller, favoring the sale of his own to determine that of the third-party seller after aligning his price “.
7 censored clauses, 4 million euros fine
In the end, the court ruled that 7 of the 11 clauses pinned by Bercy were clearly unbalanced to the detriment of third-party sellers.
Amazon will have to modify them. 3 will remain intact, and one has been modified during the procedure. Amazon will have to modify them within 6 months, on pain of 10,000 euros per day.
Rather than the 9.5 million euros defended by Bercy, the court has finally revised down the fine to 4 million euros, especially given the good faith of Amazon, and different “positive steps” since the opening of the procedure.
Note however that the DGCCRF had requested the parameters of the algorithm used, from the United States, to highlight the products in the “Buy Box” Amazon … In vain.
The court finally refused the publication on the grounds that the press release of Bercy dated December 18, 2017 had been very widely (disseminated) and that this judgment should suffer a similar fate.
The observations in this article are based on candid conversations with long time sellers on the Amazon Marketplace platform. As is typical, none of the sellers would agree to be named, for fear of retribution by the giant online retailer.
Reading titles of articles like “Amazon May Have a Counterfeit Problem”, the sellers we spoke with could only laugh at the equivocation and doubt. This, apparently, is not a “maybe” thing for those with intimate knowledge of the situation.
“The real situation is that Amazon’s fee structure and shipping requirements only allow for counterfeit, illegal import or “gray market” products (such as returns that are still “new” but not factory sealed) to be sold at a meaningful profit.”
– anonymous marketplace seller
There are plenty of lawsuits by well known manufacturers who claim there is a big problem with fakes selling on the Amazon platform. Daimler AG, the company that produces Mercedes-Benz products, filed a lawsuit in Washington State, and Birkenstock, the European shoe maker, has complained loudly and publicly about the situation, and ultimately pulled their Brand from the site altogether.
The problems go much deeper than this. According to the sellers we spoke to the issue is literally built into the entire inventory of more than 500 million products listed on the site.
One reason why this is not fully reported, or even spoken of, is the fear of retribution.
A second reason is the way Amazon uses a legal strategy of “having it both ways”; customers feel like they are always buying from Amazon itself when buying on the site, or at least that they are protected by Amazon. At the same time when bigger problems do arise, suddenly, the marketplace is a pseudo-public area which can not be directly linked back to Amazon and for which they claim to have no liability.
But it is the third reason that shields the mega-site, more than anything else, from bad publicity: the fact that, in order to understand the issues thoroughly, a deep investigation into its history and business practices is required.
Apparently, according to our extremely experienced sources, it all goes back to the time, before 2008, when Amazon was still primarily an online bookstore (For years, in fact, the site’s tagline was “Earths biggest bookstore”).
Ponzi Reinvented for the Digital Age: with the blessing of the US Gov.
The “business model” at that time was simple yet brutal; buy books directly from publishers at the full wholesale price and sell them for that same amount with “free” shipping (for prime members).
And in doing this they accomplished many things, all near and dear to their founder’s heart:
-Annihilate all book sellers, online or off, since selling at zero margin could only be done by losing billions, which, in-turn, only an online Wall Street financed “dot-com darling” could afford.
-Addict the suppliers (publishers) to the steady flow of sales, with the percentage from Amazon relentlessly rising until it is the only significant buyer.
-Preemptively destroy any online seller by putting the barrier to entry so high that it would be suicidal to even try to compete (see the diapers.com saga)
-Brain-wash the public into thinking that it was “normal” to be able to buy products at wholesale prices (with free shipping) and that there was nothing “fishy” about the fact that only Amazon could afford to do it (by losing billions, on paper).
An Offer they Couldn’t Refuse: Sell or Die
From a Businessweek / Bloomberg story about how Bezos forced Diapers.com, owned by Quidisi, out of business (buying them out after the strong-arm mafia-like practices outlined below):
“Quidsi could now taste its own blood. At one point, Quidsi executives took what they knew about shipping rates, factored in Procter & Gamble’s (PG) wholesale prices, and calculated that Amazon was on track to lose $100 million over three months in the diaper category alone.
When Bezos’s lieutenants learned of WalMart’s counter-bid, they ratcheted up the pressure, telling the Quidsi founders that (Bezos) was such a furious competitor that he would drive diaper prices to zero if they sold to Bentonville.”
-report published in Businessweek and recounted in “The EVerything store”
All of this was a spectacular success, for Amazon, as can be attested to by the recently acquired “richest man-in-the-world” title. Amazon lost billions per quarter for decades and, and, yet, as the “last man standing” eventually turned that around into the creation of the world’s richest human. All stemming from virtual monopoly in online sales of ALL products in the US (over 50%, with the second largest online seller at 6.6%). Imagine even one other online retail company with more than 20% and it’s easy to see there is no “competition” for Amazon and no real alternative for buyers or sellers.
And what about sellers on the Amazon Marketplace? Did they benefit from the massive success of the platform (as they contributed more than 50% of revenue to the giant retailer)?
All the anecdotes of “some guy in Minnesota” who resells Walmart clearance items, aside, the only winners in that part of the story were and are …wait for it… counterfeiters, illegal importers and gray market sellers. Oh, and Chinese “no-brand” factories that sell on Amazon in the US.
Why?
It seems that, square in the bullseye of Amazon’s hit-list, in addition to anyone that sells anything who’s not on Amazon, is the very group that has kept the company afloat all these years: The millions of, mostly small, sellers on the marketplace all trying to eke out a living.
They have zero leverage and no where else to go to sell online (remember virtually all the customers are already locked into the Amazon platform due to the “bribery” of too-good-to-be-true prices and free shipping), therefore, they can be gouged with impossible fees.
The fee structure is, as you might expect, complicated, but fees are the highest of any online marketplace and never fall, only rise, which they do often, according to sellers. For items at lower price points deducted fees can be as much as 50%. The real costs are hidden in fees like “variable closing” and other made-up monikers to obfuscate the real reasoning behind the math. But in practical terms, selling a $8 item can cost up to $4 in added fees.
But, and this is the complicated bit, even that might work for a legitimate seller if not for the fact that, in many cases, the seller is competing against Amazon itself! And, as you have seen above, prices have no bottom limit as profit is not required for Amazon to “win”.
To wrap this mind-boggling concept up with a bow: if any company wants to realize even 1 cent of retail profit after fees, selling on the Amazon Marketplace, it must acquire the goods for roughly 70-90% below standard retail prices, and even that might not be sufficient.
Who can do that? Chinese no-brand factories shipping directly to the US with subsidized USPS shipping rates, counterfeiters, illegal importers and gray market sellers. Period.
A thorough investigation of the millions of sellers currently selling on Amazon would, without a doubt, say our sources, turn up not just a few bad apples, but a system that is virtually rotten to the core. Beyond even Elizabeth Warren’s wildest fears.
Teeth or not in Inquiry? Jawboning or action for Targeted Tech?…
Commenting on the antitrust review announced by the Justice Department on Tuesday, in an interview on CNBC, Mnuchin said that “it is good that the attorney general is going to look into this”.
Also saying that Amazon has “limited competition”, “hurt small businesses”, and that it was “absolutely right” for the Attorney General to look into “these issues”.
Amazon "has destroyed the retail industry across the United States," says Treasury Secretary Mnuchin. "It's absolutely right the Attorney General is looking into" anti-trust issues. pic.twitter.com/z5Mhc96xMa
On Tuesday, the Justice Department announced via press release that it would initiate a review to determine if major online platforms had “reduced competition, stifled innovation or otherwise harmed consumers”.
”The Department of Justice announced today that the Department’s Antitrust Division is reviewing whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.”
Department of Justice Release from Tuesday, July 23, 2019
Interestingly, the idea of some kind of antitrust action against Amazon, Google or Facebook is one that is gaining traction among Republicans and Democrats alike. Senator Elizabeth Warren in particular has often spoken of the need for intervention.
Each of the “market-leading online platforms” have built-in defenses against traditional antitrust actions, which have traditionally looked for dominant companies where consumer prices were directly impacted by use of monopoly profits (such as in United States v. AT&T and later, v. Microsoft).
In the case of Facebook and Google, profits are hidden behind “free” products and services which allow the companies to claim that no harm comes to consumers as a result of their power. Naturally, the idea that the products and services come without cost is losing credibility in light of the many scandals and instances of harm, monetary or otherwise.
Kindergarten Colors and “Consumer Obsession” while Evil Lurks Beneath…
In the case of Amazon, it is even more complex, since, as a company famous for enormous losses rather than profit, all while using various loss leader strategies to prove that it is “consumer obsessed” and not a monopoly at all.
Indeed, Amazon’s response to the Justice Department’s press release was, through a spokesman, that Amazon accounts for “less than 4% of US retail sales” and that “small and medium-sized businesses are thriving with Amazon”. Not mentioned was the dominant 50% share of the online sales market.
By comparison the second largest online sales channel, eBay, for 2019 is estimated to reach 6.1%, while Walmart’s online platform has an approximate 4.6% share.
Rarely has the media been able (or willing) to unravel the deeply complex history of Amazon’s strategies – which can be traced all the way back to the incredibly favorable pricing of it’s stock during the dot.com bubble boom and it’s “stealth” transformation from “The World’s Largest Bookstore” into “The Everything Store” over a ten year period.
The closest definition for its business behavior is as a “monopsony”, which can be defined as holding a monopoly over suppliers or labor, not consumers.
And this is where the “hurt small businesses” comes in. Any small retailer wishing to survive, let alone make a profit, must have online sales in some form (ask Walmart if you doubt that online sales are a necessary requirement for a brick and mortar retail business in 2019) and the domination in that area – that is to say the control of the customers, by Amazon is so extreme that joining the Amazon Marketplace is the only option (other than trying to survive with 90% fewer online sales).
And the Marketplace is controlled with an iron fist by Amazon. For example, since around 2006 all communication between Amazon Marketplace sellers and their buyers is handled by an encrypted, anonymous messaging system designed to prevent sellers from obtaining any direct email addresses from buyers.
This amazingly elaborate system is a glaring indicator, hiding in plain sight, that Amazon views its “selling partners” as anything but.
Although third-party sellers accounted, for example, for 50% of paid units sold on Amazon in 2016, every customer was considered to belong 100% to Amazon and zero percent to the seller.
With fees that can total up to 50% (they use a complex exponential sliding scale which makes it impossible to quote any exact figure) the seller is doomed to have no brand value and no “good will” value as long as it agrees to cooperate on the platform. Not selling on Amazon, unless extremely well capitalized (such as a start-up with hundreds of millions of dollars), is a death sentence.
Naturally, the waters remain muddy, since examples of the precise opposite can be pointed to – if you are a manufacturer and your products are extremely cheap (you are probably in China) and you like to offer your margin to Jeff Bezos as “his opportunity” and, particularly if your products will harm an Amazon competitor that refuses to sell on Amazon, the red carpet will be laid at your feet.
3 Brands Take Over Earth, Almost No-one Notices
It’s odd, as an observer, to note that there is not a single “brand success story” that can be pointed to as having built their brand through the Amazon third-party Marketplace. Could this be more than a coincidence?
”What I am glad we never did and that we’ve avoided so far is being on Amazon”
Jen Rubio, co-founder and chief brand officer of Away
Take, for example, Away Luggage, who went from being a “direct to consumer” start-up founded in 2015 to recently reaching a valuation of over one billion dollars and who made it a point NEVER to sell on Amazon;
She added that a “deal breaker” was that Amazon does not share customer data with vendors.
”Just sticking to our guns and not going on the [Amazon] platform was important for us”
Jen Rubio, Away
In our own recent interview with a long time Amazon Marketplace seller, who insisted on not being named, “or my children’s lives would be in danger”, he stated that many more behaviors towards seller “partners” are anything but collegial.
One of many examples is the “co-mingling” policy. As with much of what goes on behind the scenes at Amazon, this is an opaque, complex concept where all products that reside in any Amazon warehouse (supplied by various sellers participating in the “Fulfillment by Amazon” program) are considered to be “co-mingled” once they arrive.
When an item is purchased from a particular seller any item from any supplier is “picked” and shipped to the buyer. If that item is somehow inferior or even counterfeit, the seller whose name is on the order is automatically blamed although there is no way to trace the item’s true origin.
Our anonymous interviewee stated that, in one case, he was put out of business and even sued as having sold a counterfeit item, even though all his inventory was purchased from the original authorized manufacturer, and he could prove it.
Why didn’t he fight the false and obviously bogus accusation? $50,000 to $100,000 in Legal fees and no chance of any remedy other than, perhaps, re-instatement with no guarantee that the same thing wouldn’t happen again 2 days later.
One could get the impression, surveying the various accounts from sellers, across many walks of life, that Amazon’s perspective is not only that it is unimportant what happens to a particular seller that runs into problems on its platform, but that the demise of any seller is a “win” and that harm to any seller is harm to a competitor, even if that entity is technically a “Marketplace Partner”.
If true, this is as disturbing as any “consumer harm” effected through higher prices, as the sellers, who are also consumers let’s not forget, are just as trapped in the platform’s private “hell” as any consumer who is forced to pay higher prices as a result of monopolistic behavior.
Stories like the one above are “out-there” by the thousands but, strangely, hard to find online. A search on Google (oh yes, one of the other companies being scrutinized by the Justice Department) for “Amazon harms sellers” would often, in the recent past, bring up nothing but links to Amazon itself and how it is harmed by “counterfeit sellers” as if all the problems on the platform are created by the “other guy”.
Interestingly, even that is beginning to change, and there are more and more articles by reputable outlets such as Forbes , The Verge and INC who are daring to take information publicly gathered, as in our case, often from anonymous sources fearing retribution, and report on it without fearing similar retribution to its own organization. It seems likely more such stories will be published in the coming days and months. And perhaps, as they say, one day, the chickens will come home to roost.
