Bezos knocked from #1 slot that he has held since 2017
According to Bloomberg, Elon Musk, CEO of Tesla and SpaceX just passed up Jeff Bezos as the world’s richest person. While this, in and of itself is a fact that many will likely fetishize, the real story here is why and how.
There could not, IMHO, be two people more diametrically opposed in terms of motivation, inspiration and method. Both obscenely rich now? Of course. In each case because of stock holdings in companies they founded? Right again.
After that it is all a study in contrasts and contradictions. For example, as recently as Christmas eve 20o8 Elon Musk was nearly bankrupt and was on the verge of losing both SpaceX and Tesla. Later as recently as 2019, Tesla was in a deep financial hole.
Was this a case of bad management? Apparently not. What it was related to was the prime difference between Bezos and Musk. Musk has always only had one mission. Was it having the world’s most dominant eCommerce company? (or any other kind). One that would destroy entire business categories and be called the “grim reaper” due to it’s destruction of markets and competitors?
No – Musk has always wanted to save the world from itself. Tesla’s stated official mission is:
Tesla’s mission is to accelerate the world’s transition to sustainable energy. … Teslabelieves the faster the world stops relying on fossil fuels and moves towards a zero-emission future, the better.
Tesla / Elon Musk
Perhaps the cynical would say this is just some kind of veil hiding a capitalist and monopolist hunger a la Bezos. But they’d be wrong. Musk has openly stated that he is willing to share various proprietary technical information with his competitors if it would help the world’s transition to sustainable energy succeed faster. Would Bezos give away Amazon’s secrets. Take a guess.
Another interesting tidbit – Both SpaceX and Tesla have publicly disavowed all copyright claims to their photos, videos or other marketing assets. They also do zero paid advertising. This is brilliant and has made them money in the end, but more importantly it is additional proof that it is the success of the mission, a mission that ultimately benefits all humanity more than any singe individual, that is paramount in his thinking.
Though Musk may not realize it, he and Steve Jobs are kindred spirits
The only other highly successful tech visionary that had this kind of focus on the real success, which can by definition only ever be success for all, if Steve Jobs. With so much misinformation and focus on meaningless stats, like whose stock is worth the most paper dollars (printed at will by the Fed) at any given moment, it is often misunderstood that the mission and the sincerity and effectiveness of the mission that will always matter in the end.
Probably the greatest gift Bezos ever has or ever will give to humanity was via his divorce. Any other “charitable” act he will ever commit will be, first and foremost, have the goal of improving his image and stroking his massive ego.
Therein lies the difference.
Early Thursday Tesla shares (TSLA) rose by 6%, and further lifting the CEO’s stock holdings and options by $10 billion, resulting in the net worth of approximately $191 billion.
Musk edged past the Amazon founder who is currently has the net worth of around $187 billion.
Musk, who pinned the following past tweet from 2018 explained his intentions and how he will use money from his success, “You should ask why I would want money. The reason is not what you think. Very little time for recreation. Don’t have vacation homes or yachts or anything like that.”
About half my money is intended to help problems on Earth & half to help establish a self-sustaining city on Mars to ensure continuation of life (of all species) in case Earth gets hit by a meteor like the dinosaurs or WW3 happens & we destroy ourselves
The battle is getting very public and will get louder and nastier
The full page newspaper ads taken out by Facebook, where they proclaim themselves the champion of small business and attack Apple directly are interesting and curious on many levels.
It will take a series of articles to attempt to untangle the confusions and endless, often intentionally fostered, misconceptions that will most certainly arise in this battle of titans.
At the heart of the matter is, however, the largest misconception humanly possible, the idea that these monstrously huge companies, and how they operate, are anything at all related to “normal”.
The fact that all of us have seen the role of the internet in general increase over the last 20+ years, and have therefore had to deal with, and in some cases, go through and cooperate with these behemoths, may be the status quo that has developed, particularly in the last decade, but it is without precedent on many levels.
The size, power and influence is beyond comprehension and this clouds every issue
Before even beginning to contrast one giant against another one must first confront the very existence of entities of this magnitude. It’s fair to say that never in history has such a tiny group of companies, and by extension, individual humans, controlled so much of the economy and so much of that impacts the society and our experiences.
This chart is not current. If it were the disparity would be far larger and even more astounding:
This information, for a human, is so out of whack that you would have to stare at this chart for days before it could even sink in. And, as it it only a chart of size, built on company market capitalization, the power and influence, which represents and ever larger disparity, is not represented.
The dominance overall is so extreme as to be humanly incomprehensible. And by all measures the disparity between the big tech firms and “everybody else” grows literally by the second.
If you are afraid of A.I., you’re too late, the world is already controlled by computers and software via these companies
Facebook is probably the best example to illustrate the problem of market power and dominance on a level that is so far beyond traditional methods of measurement that even government antitrust investigations are barely able to begin to access the potential violations.
“The questions below might seem odd, or even absurd. But what is really absurd is that they are, for the most part, never asked. “
The questions below might seem odd, or even absurd. But what is really absurd is that they are, for the most part, never asked. Since the iPhone and later Samsung / Android revolutionized information and photo sharing, it has been accepted as a simple reality that Facebook controls nearly all the “social networking” that is done with that data. Why?
What is Facebook? Most would say they are a “social media company” but that can mean anything you want it to mean. They claim they are in the business of “connecting people” yet they derive massive wealth and profit from advertising, and “monetizing” their network, the largest network of “social users”, by far.
And if they are interested in connecting people, then what do those people own of the network that they themselves comprise? That would be nothing.
What say do they have in how they are used to “monetize” the network that they literally “are”? None.
What trust do they have to surrender to the company, which includes Facebook, Instagram, WhatsApp and more (all controlled 100% by a guy named Zuckerberg)? 100%
“What ‘say’ do they have in how they are used to “monetize” the network that they literally ‘are’? None.”
— D.L.
Who authorized Facebook (or Google) to amass vast databanks of private personal information from a huge chunk of the world’s population, and use that data to amass fortunes of unheard of size using secret proprietary algorithms that they have zero requirement to disclose? Well, technically, users, inadvertently and without understanding, did. Otherwise: No-one.
Well, technically all of this was “allowed” via Section 230 of the Communications Decency Act, passed in 1996, and states that an “interactive computer service” can’t be treated as the publisher or speaker of third-party content. This, effectively, protects websites and “platforms” such as Facebook, from lawsuits in the case that a “user” posts something illegal. There are exceptions, for example, for copyright violations, sex work-related material, and violations of federal criminal law.
This fact does not remove responsibility for building a system that gives massive financial benefit to Facebook, Google, etc and very little, in reality, by way of return or influence to the “user”.
It’s as if a man figured out a way to use mental-telepathy to rob banks and could never be caught or prosecuted due to the fact that no one had ever robbed a bank that way before. And then he claimed that he should be allowed to continue doing it forever, with impunity.
What would Facebook and Zuckerberg have if the billions of “users” stopped using its network? Nothing.
How little sense this makes just goes on and on. There could be 100s of pages of similar questions and answers and the end result would be a slightly better understanding of the absurdity of the very existence of such a “service” or company or whatever this is.
Why absurd? In a nutshell, Facebook controls private networks that exist “inside” a more public network called, for lack of a better term, “the internet”. And, because of what could be termed a mistake of history they represent a dominant, near monopoly, in the “space” which in this case is currently called “social networks”.
The dominance and the definition of monopoly can be argued endlessly (and likely will be in the coming antitrust cases) but, in the end, the numbers don’t lie. Only one person benefits, in direct payments of trillions of dollars, from a near monopoly in social networks. The billions of people, the very people who are the network, do not.
A bleak analysis, perhaps, but is there any light at the end of this tunnel?
The current increase in antitrust cases, both in the US and Europe, is a canary-in the-coal-mine moment and the wars over all the arising issues has begun and will go on for years.
The fact that Facebook is heavily advertising that they are the “good guy” while Amazon and Google do the same, is both ridiculous and sad, since “good guys” don’t have to buy ads to draw attention to that fact.
And the fact that these companies have already started, both in word and deed, to attack each other directly, is an indication of just how serious and all pervasive these mega-wars will be. This is just the beginning.
While none of the companies depicted on the chart above can be said to be without blame for the world of injustice and malfunction that is the internet, and by extension, our world, there is one company that stands apart from the others in so many ways and for so many reasons that they, amazingly, represent some hope within the madness.
And, not coincidently, they are the one that is already being attacked, in print and software, as the wars begin: Apple.
How Apple actually represents hope to clean up the tech universe that, arguably, they are most responsible for having created, is likely a hard sell with those that want to lump all these huge companies together. Because, after all, they are all huge.
However, nothing could be further from the truth. More on this and other burning questions in our next episode, so stay tuned.
The opinions expressed “pro” or “con” regarding big tech abuses of power are both overlooking far more serious issues that lie beneath
After years of public and insider opinion gradually shifting from a state of wonder, awe and hero worship of tech giants and their founders and CEOs, toward a more skeptical stance, and now, finally, government action begins; the fundamental issues that lie beneath are still barely mentioned, let alone widely understood.
In a filing at the U.S. District Court in Washington D.C., on December 9th, 2020, the Federal Trade Commission, together with 46 states, plus the District of Columbia and Guam, alleged that Facebook employed anticompetitive tactics, allowing it to bully and bury its rivals. In a strongly worded brief it recommends that the massive company be broken up, specifically by divesting itself of Instagram and WhatsApp.
While past antitrust cases were complex and difficult to understand fully, particularly for the general public, from the little known A & P case in the 30s and 40s to Standard Oil and Ma Bell / AT&T, in each case there were complex issues to address.
However, one simple thing tied them together that could be understood by virtually anyone: businesses that have a win-at-all-costs approach to business tactics and then achieve monopoly power almost always use that power to fulfill ambitions based on self-perpetuating greed at the expense of society as a whole.
Many, from all walks of life, particularly in the U.S., worship the ethos of “winner take all” and even if they are at the lowest levels of the economic ladder still cheer on the most ruthless and morally bankrupt “winners” as heroes, using a bizarre logic, that somehow they might one day see themselves in the winners circle.
This perspective is similar to societies where dictators, such as Ferdinand Marcos in the Philippines, or emperors are worshiped fervently by the very people that are most exploited and downtrodden under their regimes. Perhaps this is a hardwired genetic human trait, impossible to alter.
In the case of tech giants of the internet era, beginning with Microsoft and its antitrust case, a similar dynamic is no less present, and, no different from the steps that dictators take to encourage obedience and worship from their subjects. In this case it’s massive amounts of money and power used for required self-serving PR and the brutal economic repression of any dissenting voices.
Try to find a book on Amazon’s Jeff Bezos that is not a hero-worship nonsense-title purporting to offer you a way to become a “business genius” like him. You will find a few exceptions, of course, these purporting to offer “hard-hitting” investigative journalism and a sober look at the “real facts”.
These will be watered down, meekly subservient, weak and impotent tombs barely scratching the surface of any negative perspectives on the real problems Amazon and its founder have created, not only for millions of people around the world but for society as a whole.
Even among those that are the most incisive and have a real desire to “dig-deep” and reach the roots of the real problems, there is often still the a priori assumption that somehow, the 26 year evolution of business models that could “succeed” in internet and software based business are to be measured on a scale that presumes that the business models themselves are basically valid, simply because they were able to survive and create massive, nearly immeasurable, wealth for a tiny handful of individuals. .
Taking into account the pervasive pro-big-business bias, it is a miracle in a sense, that the public opinion has shifted so far, to the point where antitrust actions can be seen as valid, by enough of the public at large, that these giant monopolistic tech companies are called into question at all.
The miracle, if we call it that, is only a reflection of just how purely evil and out of control the situation has become, and how many people have been harmed, and in how many different ways this harm has occurred.
From teen suicides to thousands of bankrupt and struggling small businesses to privacy rights trampled in the dirt, the list of abuses and harm, if it were ever brought to light, could fill a thousand page treatise and would read like a recounting of the atrocities of war.
And then there’s the fact that the war is fought with computer code and over territory that has no physical address
Much as collateralized debt obligations and other arcane “synthetic” financial products nearly collapsed the entire world economy in 2008, partially due to the intentional complexity, which served only to hide the stupidity, complex computer algorithms are now at the heart of an ever larger and even more dangerous economic debacle that continues to unfold.
And much of the lack of any pushback against this is the simple ability to hide behind the complex computer methods and concepts that have allowed tech giants to build an even bigger and more dangerous kind of monopolistic behavior than even the so called “Robber Barons” of the Gilded Age.
Even those, in government or in the press, who are pushing back are doing so with, apparently, little understanding of the real dangers that are buried in the code and in the tricks used by very sophisticated, technologically educated people in control of these trillion dollar behemoths.
For example, Facebook is already claiming that the government should not be able to question the acquisitions of Instagram and WhatsApp because they already approved the mergers at the time they happened.
In his excellent article published on medium.com , Will Oremus points out:
But I looked up the FTC’s public statements following those reviews, and it states explicitly that the matter should not be considered permanently settled.
“This action is not to be construed as a determination that a violation may not have occurred,” the FTC’s closing letter said. It added, “The Commission reserves the right to take such further action as the public interest may require.” Facebook did not immediately respond to a request for comment.
Also in that article, titled; ‘Competition Is for Losers’: How Peter Thiel Helped Facebook Embrace Monopoly the idea succinctly embodied in the title which refers to a Wall Street Journal piece on Thiel’s book “Zero to One” which he describes as having been “embraced as a business bible in Silicon Valley and beyond” and quotes from including this characterization:
(Thiel) made the case for monopoly as the ultimate goal of capitalism. Indeed, “monopoly is the condition of every successful business,” he asserted. With it, you’re free to set your own prices, think long-term, innovate, and pursue goals other than mere survival. Without it, you’re replaceable, and your profits will eventually converge on zero.
And this provides the context within which the current struggle unfolds. To understand the real dangers of the total domination of the internet, which has become the vital lifeline of our economy and social existence, by a handful of trillion dollar companies, that not only embrace limitless greed and dictatorial status within their industry, but see it as the divine right that they hold, and believe they are entitled to aspire toward without interference.
And in another context such behavior would be known as immoral, destructive to society and social justice, and if the laws are adequate to apply; criminal.
And there’s the rub. The antitrust statutes, possibly already inadequate to take on this new kind of robber, have also been weakened since the 80s. Add to that how the pre-existing biases are heavily slanted toward minimizing any accountability for such behavior and is follows that any real reform must rise from the public at large.
The birth of the internet was anything but immaculate
The tragi-comic farce of the story, when seen through the lens of internet history, is how Facebook, Google and Amazon all followed the same absurd arc.
From “underdogs” with massive losses and no income to ridiculously “valuable” “FANG” members championed from the rooftops as heroic winners of darwinian battles to build out the internet for profit. And, finally, after decades of unfettered expansion, being seen more and more for what they are: profit-seeking scams using each a different method to restrain competition and destroy the most valuable asset humanity has ever built: the internet itself.
The complexity of the scams is still the most useful cloak for them to hide behind, each with a different insanely complicated way to force what is a public asset, the internet, into a tool for private greed, at the expense of any real innovation. And the victims are not the competitor firms that they might have destroyed (or bought), but rather the entire population of any territory that they control, with North America being the center of the empire.
The question asked for example of Google or Facebook should not be, “do they provide any services from the public can benefit, in exchange for their obscenely privileged monopoly control over “search” and “social networking”, respectively. The question should be “are they the best possible solution, from the perspective of what is in the best interest of society, for those extremely important functions in our new digital world.
It is not enough to say that “consumers have chosen” each as their go-to tool. If any company or group of companies could do a better job of enabling humanity to communicate, interact and become educated via the internet, why should those other solutions be buried forever under a mountain of greed and self-interest?
This is the infinitely elusive point: No different than Bernie Madoff, the damage they have wrought, by destroying what could have been, will only be understood once they are either gone or forced to cease what they depend on for domination, which would lead to their ultimate demise over time, just as Peter Thiel himself stated:
Without (a monoply), you’re replaceable, and your profits will eventually converge on zero.
Or as Jeff Bezos explained, in what his become his predatory raison d’être: The competition is always one-click-away. This makes every other online seller, in his view, an enemy that must be destroyed at all costs, no matter how small, no matter how weak.
In this sick paranoid view of the world it is truly an all or nothing struggle for survival, with death of all competitors, literally and figuratively, the only acceptable outcome.
With this mindset at the heart of these companies, and with the government and most of the press taking a milk-toast submissive approach (in contrast) the struggle to rein in these monstrous, utterly corrupt empires, will take years if not decades.
However, 2020 will always be seen as the beginning of the end the the gruesome mistake of history that these companies represent.
Companies that achieved dominance and monopoly control of a system meant for public benefit, through the most destructive methods they were able to devise, and then redoubled efforts infinitely to expand using those same destructive and corrupt methods.
In the end there is only one power large enough to intervene, as already at their current size, and while, like a virus, they double in power and economic domination almost annually, and that is the power of the billions that use their platforms everyday. Change will arise when they have damaged themselves by damaging the very societies they prey on, and once damaged, those societies will have no choice but to shed them like the murderous parasites that they are.
That will not happen anytime soon. The general view of these companies, is still very mild and forgiving. And it’s important to note that each case is different and this article applies only to Facebook, Google and Amazon.
Just as most have either forgiven or forgotten the massive bailouts that criminal companies were gifted during the 2008 financial crisis, the perception that these massive tech companies are at worst mildly anti-competitive and at best harmless and just practicing good, successful capitalism, will not be changed overnight.
It can only come after much more pain at the hands of this corrupt system that currently controls the internet, and therefore, our digital lives.
Search Battle Lynxotic Predicted is about to Breakout Big time
In a year that has already offered AppleOne, 5G, and perpetual AirTag teases, Apple Inc might have yet another major project hidden up its sleeve. According to a report from the Financial Times, the tech company has recently partaken in research and development indicative of creating a new original search engine.
For years, Google has been the default search engine on Apple devices. This is part of an ongoing deal between the two companies where Google pays Apple a pretty penny to foreground their services. Now, however, Google is facing an antitrust suit from the Department of Justice. This case claims that Google has a monopoly over search and directly sites its relationship with Apple as evidence.
If the DOJ manages to win against Google, it could be the end of its search engine arriving pre-encrypted in all iPhones, iPads, and Macs. Thus, an in-house Apple search engine comes at an opportune time. Not only will it provide Apple with a new default search platform, but it will also muster some competition against Google— one of the things that the antitrust case desperately calls for.
Any Engine at All by Apple is Earth-shattering to the Status Quo of Big Tech
Nothing is set in concrete about this speculative Apple search engine yet. All we know for sure is that the latest version of iOS 14 shows signs of increased search technology. Under the upgraded operating system, iPhone users can type in questions directly on their devices’ home screens and arrive at Internet results without any middleman. This has also led to an uptick in Apple’s spidering tools, which comb and datafy the web for a smoother search experience.
These changes in iOS 14 are subtle, but given the context, they could be laying the seeds for something much larger. Tellingly, former Google head of search John Geannandrea also oversees these recent Apple advancements. Geannandrea joined Apple three years ago, and while his main focus at the company has been Siri thus far, he obviously has the expertise and experience for helming a Google-like project.
Some believe that Siri is the base of Apple’s increased search interests. Perhaps the new technologies are simply working to refine the voice assistant rather than setting up a wholly alternative Google competitor. At the same time, though, with the proper expansion, Siri could very well evolve into a worthy Google rival, especially if it becomes the one-stop search engine on all Apple devices.For now, users will just have to wait while events unfold. Experts say that the antitrust case against Google will go on for years, and if Apple is indeed developing its own search engine alternative, it will likely take just as long.
New Reports call for laws to rein in giant monopolies
Amid a zany week of political theater and election drama, the federal government has actually managed to make quiet, nonpartisan progress on an important issue. On Tuesday, October 7th, Democratic members of the House Judiciary Subcommittee on Antitrust finally released a long-awaited report concerning the dominant technological companies in America and their legally dubious corporate power.
The report comes at the end of a sixteen-month investigation into the tech giants, arriving to the conclusion that America’s four biggest tech companies—Amazon, Google, Facebook, and Apple— all partake in anti-competitive practices that could be reprehensible by law.
Essentially, with the exception of Apple, these four conglomerates have created near-monopolies in their respective fields. Amazon controls 40% of e-commerce in America, and endorses business models that squander the competition and abuse third-party sellers through data mining. Apple has argued that they do not have a monopoly stake in phones, Android (google) and Samsung, have a larger worldwide base, and in other areas Apple has an even less dominant position. Only in dollar denominated success do they hold the absolute top spot.
Google has an even larger monopoly on Internet searches, also utilizing data to bind users to their content and prioritize their services over all other websites.
Facebook, meanwhile, is a hegemonic vacuum for social media outlets, endorsing a “copy, acquire, and then kill” technique according to the report. Essentially, rather than compete with other platforms, Facebook sucks them into inescapable, self-serving positions.
Apple is not in quite as much hot water as the other three companies. The report mainly accuses Apple of binding its users to the Apple Store, which creates an extra, sometimes expensive, hurdle for App developers to get over if they want their product widely available. The report accuses Google of doing something similar with Android, saying that the software forces people to use Google on their devices.
Of course, all of these companies have denied any illegality in their actions— each citing the free market and defending their business practices as entirely fair when responding to the report.
Generally in gridlock and inept, this is one area where Government must act decisively
However, Congress does not seem to agree. In light of the recent report, many Democrats are in favor of rewriting the U.S. Antitrust Laws to better protect a fair, competitive economy. Traditionally, the Antitrust Laws keep businesses in check on behalf of consumers, but they have not been touched in decades, and capitalism has developed immensely since then.
The amount of power that these three companies have garnered demonstrates that the laws now need to consider affairs between businesses as well, lest a handful of power-hungry entities override the market.
Some Republicans, however, have pushed back against the idea of rewriting the Antitrust Laws. Notably, Representative Kelly Armstrong from North Dakota did not sign the committee’s report on Tuesday. While he agrees that something nefarious is at hand with these tech companies, his remedy focuses on greater oversight from the Department of Justice and the Federal Trade Commission, upping the enforcement rather than adjusting the laws itself.
Even if certain politicians disagree on how to address the issue, the nonpartisan support for cracking down on big-tech in America is nevertheless a milestone, and it comes at a crucial time. While thousands of Americans are facing economic strife due to the COVID-19 pandemic, billionaires (especially tech moguls) are seeing their stocks skyrocket.
According to a financial study covered in USA Today, billionaires now hold more of the world’s wealth than ever before— $10.8 trillion. Tech billionaires in particular hold $1.8 trillion of that, a whopping 42.5% increase from just a year and a half ago.
The bulk of American Antitrust Laws were written at the turn of the twentieth century. Since then, the state of the world has changed. The state of the economy has changed. And perhaps most immensely, the state of technology has changed. Algorithmic dictatorships are growing almost as quickly as class divides in America. So perhaps it is time for the law to change as well.
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Apple will expose the worst of predatory surveillance by Facebook, Amazon and Google with new privacy features
While wrong is wrong regardless of the perpetrator, when it comes to gargantuan tech behemoths, a company with a clearly defined mission such as Apple or Tesla are in a different category than Amazon, Facebook and Google.
While Tesla’s stated mission is to “accelerate the world’s transition to sustainable energy” and Apple’s original mission statement, written by Steve Jobs was “to make a contribution to the world by making tools for the mind that advance humankind”, predatory vultures hide behind ridiculous slogans like “aim to be Earth’s most customer centric company” (while decimating partners and competitors by any means necessary) and “don’t be evil” (don’t get caught) and “to give people the power to build community and bring the world closer together” (…all while stealing data for profit from every person on earth).
Click to See “Steve Jobs“ and to help Lynxotic and Independent Bookstores. Also Available on Amazon.
It’s just not the same – particularly as Steve Jobs, while at Apple, pushed himself and his company to invent and build many powerful examples of “tools for the mind” and Elon Musk’s Tesla brought the electric car back from the dead (after it was nearly snuffed out by big oil) and is making incredible headway in revolutionizing battery and solar technology, all with a view to literally save the planet from a climate catastrophe.
Bezos? Became the richest living human via the destruction of millions of small business and jobs all while undercutting competitors by selling virtually anything he got his hands on at a significant loss; simply to cause the demise of any competitor or partner that might threaten his rise to idiotically massive personal wealth.
Zuckerberg? Pioneered ways to suck data from virtually every human with a view to monetizing every living soul exclusively for himself and his company. Illustration? Dividing Facebook’s market cap by the number of employees it has yields the sum of $14,906,500.00 per employee. Macy’s? That’d be $16,829. (Thanks to Scott Galloway for the numbers)
Google merely owns (91.75% as of June 2020) the search entryway to all web sites. It decides if you should or should not find them. If it can boost profits by hiding one and featuring another, either through “paid search” or by pointing you toward its own properties while hiding competitors from you, it will do exactly that. Ask the European Union’s anti-trust investigators. For them, this company is a convicted law breaker.
Announced at WWDC 2020, Apple is adding serious features to its various new operating systems. One big feature in Safari is the ability to track, and block as desired, all manner of data intrusions. These are not only identified, but shown and tracked and analyzed with a kind of professional dashboard, showing just how invasive and persistent these invisible spies are.
Apple is big, with more than 1.4 billion devices. Starting in around 2021 they will all be able to identify and block data surveillance by Amazon (the largest of all spies), Google and Facebook, among others. Thanks that’s not a big deal? Think again.
…the overall stance being taken regarding online tracking and surveillance should be seen for what it is: the first step to correcting the mistake of history that allowed the internet to be kidnapped and held hostage by a handful of companies that pretend to be “free” or “customer obsessed” while they are, in fact, Robber Barons that make the Standard Oil monopoly look like Santa Claus.
– D.L.
Tracking the Trackers will Change Your Life
Tracking the trackers is a clear and aggressive privacy stance, taken by the one company among the big four, that does not have a huge stake in you being the victim of online surveillance and tracking.
Not to say that Apple is blameless. Many are complaining about its fee structure for software sold by third parties via the app stores. While this issue is certainly a valid one, the overall stance being taken regarding online tracking and surveillance should be seen for what it is: the first step to correcting the mistake of history that allowed the internet to be kidnapped and held hostage by a handful of companies that pretend to be “free” or “customer obsessed” while they are, in fact, Robber Barons that make the Standard Oil monopoly look like Santa Claus.
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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.
Based on a 5 year extrapolation of the past into the future. Nope.
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.
The source of this nonsense projection appears to be a web site called “comparisun”, who are likely getting a lot of traffic from this, so congratulations.
Naturally, $150 billion of basically ill-gotten gains (more on that below) is enough to engender plenty of outrage, as it well should. The joke in this case is that this man’s net worth is almost as likely to be near zero in 5 years as to be a trillion dollars.
Why’s that you ask? The answers are endless and all true, but here are a random few. Jeff Bezos wealth is mainly based on Amazon’s share price. That is likely to continue to be the case. That price is currently at all time highs due to many factors but one factor that will not likely continue is the buying that “investors” are engaging in based on the idea the our future economy will consist of Amazon, Netflix and some medical companies that will profit off the coronavirus pandemic.
We all need to look hard at this.
— Madison Santel 🏊🏻♂️🌎🎭 (@santel_madison) May 15, 2020
Hmmm. How’s that likely to work out? Netflix has around 6,700 employees and are unlikely to hire the 20 million that just lost their jobs. Amazon has nearly a million workers but the vast majority are in terrible low paid jobs without bathroom breaks (allegedly).
Does that sound like an economy where stocks, even Amazon’s are likely to rise in price for 5 years straight? Nope. No jobs, no income, no prime .
The reality of the inner workings of his empire will one day be known. Midas touch terminated.
Digging deeper into the business model of the predatory monster from Seattle, there are also some difficult issues that will have to be faced. For example, it is a little known fact that nearly 60% of the income generated by the eCommerce site is based on fees charged to “marketplace sellers”. These sellers are so efficiently exploited that they are known to “source” new products from dumpsters in order to earn enough (after fees) to eat. To supplement what they eat out of those dumpsters, apparently. Don’t just read our article on this, try the Wall Street Journal article titled: “You Might Be Buying Trash on Amazon—Literally”.
And after the pleasure of that kind of “partnership” they are rewarded with zero job security and will be blamed for any and every problem, regardless if it is a small issue with a customer (all refunds and return postage are charged directly to the seller and is triggered at will by the host) or a P.R. problem (marketplace sellers are perfect scapegoats and weeding out the “bad apples” is the perfect cover, driving scrutiny away from the real issues).
Jeff Bezos is expected to become the 1st trillionaire as he consolidates the retail market during coronavirus.
Now Amazon is telling its workers (who have faced significant risk) that it'll be ending their hazard pay at the end of MAY!
— Rep. Bonnie Watson Coleman (@RepBonnie) May 13, 2020
The hatred for this system and the virtual impossibility to prosper has been growing steadily for years (ask Nike, Birkenstock or thousands of small companies driven out of business on a whim or tiny infraction by the behemoth) and will only grow. And then there’s the Gov. Both democrats and republicans have major issues with Bezos and his one man circus. Antitrust investigations are ongoing and not only in the US.
There are so many land mines waiting in the road ahead that that stock price has virtually no chance of rising, regardless of how many more competitors of the “grim reaper” are six feet under. Ironically, it is the lack of real competition, online or at the now soon-to-be-extinct shopping mall, that will focus even more of us on why this show needs to end, and soon, not expand at the obscene rate of the previous 5 years.
In a future dreamworld Bezos could have a trillion. In a better world he would be the one unemployed.
Not long ago it was a pledge of billions for the climate crisis, now $4 billion for “safety”. Where are the audited accounts?
Above: Photo Collage / Lynxotic
Funny thing about promises made by politicians and owners of public companies. Although truth will eventually come out due to public access to accounting, these are often so far in the future that virtually anything can be promised today with no need for a specific plan or transparent numbers to back them up.
On May 3rd, in a dramatic “you may want to sit down” moment Jeff Bezos announced that the company he runs, and is the principal shareholder of, would take all of the $4 billion in expected 2nd quarter operating profit and “invest” it in “COVID-related” costs:
“Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.”
Now those who follow Amazon news might remember that in February the online retail giant’s owner pledged $10 billion as a “donation” toward battling climate change, under the moniker “Bezos Earth Fund”.
Even as these ego boosting promises are helping with the image of this company, often otherwise described as “the grim reaper” in the press for its murderous behavior toward any potential competition, a cursory look beneath the surface quickly yields another story. The announcement on Friday suspiciously coincided with fallout from a WSJ article alleging that false information was given in testimony relating to Amazon’s well known extreme competitive behavior against its own so-called marketplace sellers. On the same day as the “generous” promise came to light the WSJ published a follow up piece indicating that Bezos has been “asked” to testify before Congress and to clarify what appears to be an attempted cover-up of the well known practice.
A long history of incredibly consistent behavior points to something lurking beneath the headlines
While we are digging into the weeds here it’s important to note that both the promised, not yet existent, $4 billion and the “pledge” to set up the “Bezos Earth Fund” are not binding in any way, but simply vague promises. It will be months and likely years before any solid information could come out as to just what the various monies will be spent on, if at all.
For example, Amazon has made it well known that it intends to take its “Grim Reaper” show to the health care industry in an attempt to cause the same kind of carnage that it achieved in the book retail and publishing industries, not to mention Diapers and countless other product categories. Who’s to stop this push into a new area to conquer from being funded by this “generous promise” of $4 billion even while stating that all of Q2 profit will be used for “protecting employees as this crisis continues”. Who will prevent that from happening? Yes, you have it right, no one.
Meanwhile, even as these lovely pledges and promises get the digital ink equivalent of a small ocean, the usual slash, burn and pillage continues in plain sight. Many of those same digital outlets crowing about the generosity of the great emperor of Amazon’s promise, just had their business models turned to something more suited to a cremation urn than the daily news shelf. Amazon Affiliate payments to media outlets, a mainstay keeping many news organizations afloat (barely) were suddenly slashed up to 80% this week. So, in other words, a huge constituency that created the success of the giant firm is once again being rewarded by almost certain financial collapse. Big surprise.
There are two that “win”: one is Amazon, second a bribed customer and all others are lured into a death trap
This warrants a deeper look into the process and train of thought that can be deduced from the recent facts, actions and events. Amazon’s income has exploded since the coronavirus crisis began; hence the anticipated $4 billion operating profit projection.
Warehouse workers ? A million allegedly working in almost sweatshop (or worse) conditions for slave wages. Do they benefit financially from this obscene windfall? Yes, they get, possibly, free masks. Perhaps a tiny pay raise for certain “teams”.
How about the marketplace sellers (you know the ones that Congress and the WSJ appear to believe have been systematically defrauded and cheated for decades) that generate nearly 60% of the gross income of the retail site? They will be rewarded with increased scrutiny, higher fees, higher costs and the usual brutal death camp treatment. Lower fees for the best among them? Never.
Ultimately, this charade is business as usual and par for the course from a company that did not get the nickname “Grim Reaper” for nothing. $14 billion for altruistic causes that represent selfless generosity towards others? That’s as likely as a Camel jumping through the eye of a needle.
full statement released by Amazon / Bezos:
From online shopping to AWS to Prime Video and Fire TV, the current crisis is demonstrating the adaptability and durability of Amazon’s business as never before, but it’s also the hardest time we’ve ever faced,” said Jeff Bezos, Amazon founder and CEO. “We are inspired by all the essential workers we see doing their jobs—nurses and doctors, grocery store cashiers, police officers, and our own extraordinary frontline employees. The service we provide has never been more critical, and the people doing the frontline work—our employees and all the contractors throughout our supply chain—are counting on us to keep them safe as they do that work. We’re not going to let them down. Providing for customers and protecting employees as this crisis continues for more months is going to take skill, humility, invention, and money.
If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small. Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.
This includes investments in personal protective equipment, enhanced cleaning of our facilities, less efficient process paths that better allow for effective social distancing, higher wages for hourly teams, and hundreds of millions to develop our own COVID-19 testing capabilities. There is a lot of uncertainty in the world right now, and the best investment we can make is in the safety and well-being of our hundreds of thousands of employees. I’m confident that our long-term oriented shareowners will understand and embrace our approach, and that in fact they would expect no less.
Skepticism is Natural when the World’s Richest Person announces Fund without Details as to how it will be Administered
Jeff Bezos—the founder and CEO of Amazon— recently announced via Instagram that he will be donating $10 billion to the fight against climate change. The informal monetary pledge, which Bezos made on February 17th, will be titled the Bezos Earth Fund. It will economically support scientists, activists, and NGOs to help protect the planet in these environmentally trying times.
When the $10 billion is eventually donated, it will be the largest philanthropic contribution ever made towards combatting climate change. Worth over $130 billion, Bezos is the richest man in the world, and this donation will be about 8% of his entire net worth. Even for a man of Bezos’ stature, this certainly appears to be a generous act.
Nevertheless, the hefty donation has not gone without criticism and speculation. Bezos and Amazon have become controversial names in recent years for a number of reasons – conventionally being on the wrong side of climate change is but one of them.
Amazon has a troubling track record of supporting the fossil fuel industry. The company has troves of money and investments tied up with big gas and oil companies, some of the biggest profiteers off of the Earth’s ecological destruction. Recently, Amazon even sponsored an event for the Competitive Enterprise Institute, a think-tank promoting climate denial.
On an even darker note, Amazon has traditionally tried to silence employees who attend climate action rallies. Lately, these environmentally passionate employees have formed the Amazon Employees for Climate Justice to stand in solidarity and raise awareness about Amazon’s misdemeanors against the planet. Now, these employees risk termination for outing some of Amazon’s statistical secrets.
Only recently has Amazon revealed its numbers relating to carbon emissions and energy consumption. As the world’s largest retailer, the company naturally uses immense resources to transport products all around the planet. In 2018, Amazon reportedly released 44.4 million metric tons of CO2 into the atmosphere—the equivalent of a small nation.
These revelations about Amazon’s detrimental affects on the Earth have led to the company pledging some late changes. The corporation now aims to use 100% renewable energy by 2030 and carry out at least half of its shipments with zero net emissions. It also plans to invest more in wind and solar and wants carbon neutrality by 2040.
The Timing does Make this Pledge Look like A PR Stunt. How About Results, Soon?
Bezos’ $10 billion announcement just might be the bottleneck of all these reformations to put Amazon back on the right side of environmental history. Then again, if one reads closely, the Fund does not mention Amazon at all, and thus the company’s practices may continue business-as-usual despite whatever Bezos is doing to clear his personal name.
Furthermore, some are still scratching their heads about the conditions surrounding Bezos’ donation. After all, the only thing the CEO has done so far is announce the Earth Fund. He is bound to nothing and hasn’t outlined any concrete details.
Distribution of the fund will be a crucial element of the Fund’s impact. As aforementioned, the money will go to scientists, activists, and NGOs, but Bezos did not specify whether or not political donations are in the cards. Although funding non-profits and research can go a long way, many would argue that governmental reformation is the premiere way to create positive, tangible change.
The pacing of the distribution is also just as important. It is not clear how Bezos will go about giving away the $10 billion over the next few years, whether he will spend it down over time or hold in in an endowment. Many hope for the former as the world cannot wait much longer for the support it needs in combatting the climate crisis.
Then, there are a slew of lingering questions regarding the ownership, organization, and legality of this philanthropic contribution. Will it be connected to Bezos’ corporate enterprise? If so, what might be the underlying tax incentives of this “charitable” act? Who will be responsible for overseeing all of this and making sure that the money is distributed ethically?
It would be unfair to call a Bezos’ donation a hallow gesture. $10 billion is enough money to truly make a difference. However, it is imperative that the finer details be executed and analyzed with the upmost care. Given Amazon’s ongoing place in the world and its oftentimes nefarious position in the fight against climate change, people are right to look at the $10 billion with a quizzical eye, and not take it as a free pass to offset or pardon Bezos of his previous and current actions.
In the beginning of 2020, e-commerce tech conglomerate Amazon issued a new policy aimed at preventing its employees from speaking publicly without company approval. Now, the company is threatening to reprimand or even terminate employees who attend climate action rallies or speak out about Amazon’s carbon emissions.
The Amazon workers, however, are not reacting passively to these threats. Instead, they are banding together to form the Amazon Employees for Climate Justice (AECJ) to show solidarity and pressure the higher-ups to change their energy-related business practices.
The AECJ was only recently formed, but has already extended invitations to thousands of Amazon employees. In an email disseminated by the organization, Amazon workers were asked a number of questions about the company’s ethics. In particular, the note asks employees how they feel about Amazon’s sustainability practices—the issue at the center of the AECJ’s agenda.
Controversies Continue to Build at the eCommerce Giant
In recent years, Amazon has been in hot water on a number of political issues. Climate change is just one of them. CEO Jeff Bezos has been highly criticized for his business dealings with major oil and gas companies, buying into and financially supporting a number of fossil-fuel burning juggernauts. Although Bezos has expressed plans for Amazon to go carbon neutral by 2040 and has hinted at halting donations towards climate-denying politicians, all outlooks are shrouded in noncommittal uncertainty and effectively dodge the question of Amazon’s ongoing relationships with the fossil fuel industry.
Amazon employees appear to have finally had enough of this. Last September, hundreds of Amazon workers participated in a climate action walkout, where they pressured the company to reassess its carbon output. Around the same time, Amazon invested in 100,000 electric vehicles—something that should be celebrated, but nevertheless remains a rather hollow gesture in light of the larger picture.
Governments and Giant Corporations must be Forced to lead the way, if Necessary
The fossil fuel industry, the benefits reaped by the human race notwithstanding, is the central cause of the climate crisis. Big oil and gas companies, backed by politicians and funded by elite organizations, are the major cause of carbon emissions in the world. Even if every individual does his or her part to live sustainably, climate change will continue to occur at a brutal pace unless there is a large-scale transformation in the energy sector. This is a change that no one person can really instigate, but an international institution such as Amazon could impact, in a positive or negative way.
Despite its name, the AECJ are working to change Amazon on more fronts than just environmental ones. Amazon has also been rightfully panned for its mistreatment of warehouse workers and its shady dealings with the government, providing data and technology to officials without user consent. The AECJ hopes to reform some of these issues as well and make Amazon a better place to work and a better institution in the world at large. So far, over 340 Amazon employees have signed with the AECJ, risking their jobs to try and create a brighter future from the bottom up.
Granted, Amazon is not alone in its high carbon emissions, data sharing, and workplace ruling unethicalities. Tech companies such as Google, Facebookand Microsoft have been accused of similar moral breaches. Similar to the society at large, though, these corporations are built upon foundations of lower-level workers. These employees are often diligent and passionate, and in many situations, they have a closer connection to common reality than those at the top of the corporate hierarchies. Even in the midst of oppression, these people can have voices, and when they band together for powerful and just causes, those voices have the potential to form a chorus that leads to significant change.
In a Feature article WSJ does an Investigative Report but Leaves out the Real Dirt
opinion
In an article with a date stamp of December 18, 2019 at 3:38 am, WSJ released a scathing report detailing how potentially millions of sellers are allegedly scamming the public by selling discarded and remaindered good through Amazon’s marketplace.
The aim of the investigative piece was to show that Amazon did not pre-qualify or filter its selling accounts in any way and that pretty much anyone can sell anything, at least for a while, until Amazon shuts them down.
In order to add drama to the account and to emphasize how disgusting this situation can be for the buyer, WSJ set up its own marketplace “storefront” and listed items, literally found in a dumpster, for sale on Amazon. The items included a discarded jar of Lemon Curd.
While the interaction with Amazon ( a nicety afforded the Wall Street Journal) was amusing, with Amazon repeating the phrase “Amazon’s high bar for product quality” repeated over and over, for the most part the article, while well researched, totally misses the point.
The Real Rot is not in the Garbage Being Sold but Amazon’s System that Is a Machine Designed to Destroy Legitmate Retail
As is well documented in the, now ancient, saga of how Amazon killed off all competitors in the Book selling business, it has always been a clear goal of Amazon to bankrupt its competitors by any (legal?) means. These extreme tactics have not been abandoned now that all products are target for sales monopolization.
Further, regarding selling products out of dumpsters, for many years Amazon’s system has not only encouraged such desperate methods on it’s marketplace it has made them virtually impossible to avoid. In the WSJ article the question of the motivation of the sellers and why they “prefer” to sell, literally, garbage is never addressed.
It is even implied that they are just “poor” and one seller is even quoted as saying that he started selling products out of dumpsters because “he didn’t have money to buy products”.
It was also mentioned that one of the sellers “couldn’t make money as a photographer” and so he decided to start selling trash from dumpsters.
This is so incredibly misleading that it is difficult to even begin to deconstruct.
The List of Omissions from the WSJ article is Mind-boggling
While it is great to see some of the common practices that make up over 50% of sales on the Amazon platform exposed, omitting the real issues, the built-in ugliness of the system itself, is inexcusable.
First of all, no human sells products out of the trash as a first resort. To imply that these are “poor” people and therefore somehow taking advantage of Amazon’s lack of oversight is utterly ridiculous. Somehow in a “serious” exposé WSJ manages to make Amazon look like the victim. You have got to be kidding.
The fact is that Amazon is based on a system of undercutting, through various tactics, legitimate commerce, especially competing eCommerce, by forcing prices, after fees, to a level well below traditional wholesale levels. This means that anyone, large company or small individual, must source products at an unrealistic “impossible” price level in order to be competitive. Hence the popularity of the dumpster.
Who is the Real Victim? We all are.
That bears repeating: It is not possible to make a single cent on the Amazon marketplace by buying an item legitimately through a wholesale distributor and then adding a retail mark-up as has been the system for centuries (except in cases of price-gouging and other anomalies).
To use a different method to put this into perspective, remember that jar of Lemon Curd from the dumpster? Here’s the rough general breakdown for a similar product based on a 10$ sale price on the Amazon Marketplace:
Price of item “shipped” (free shipping) = $10 (rounded off for illustration purposes)
Cost of shipping and handling = $4.50
Various Fees to Amazon = $4.50
Remaining amount retained by seller = $1.00
Since the cost of this product at wholesale is around $5 and the seller must also survive, the only acceptable price for the seller to acquire the jar is $0. Dumpsters do not charge. Therefore this is the default system for sellers that work 7 days a week to try to make even a modest income.
The absurdity of this is off the charts. Even if you debate the details +- .50 in each category, etc., this is nevertheless the system that gets your Lemon Curd to your porch. A more wasteful and backward system could not be devised if you tried. Thank “modern” finance and devious minds for this wonderful invention of commerce.
The Amazon system is based on these concepts:
A. Set marketplace fees at a level where the maximum allowable “profit” for the third-party seller, after fees, is effectively zero. Fees are added to everything. A “variable closing fee” for the sale itself, fees on storage, “pick and pull” fees, shipping fees, on and on and on. These apply, at varying but always astronomical levels, through the “Fulfillment by Amazon” program and for sellers that ship and warehouse their own goods as well.
B. Encourage Chinese and other gray-market suppliers to maintain the system and “impossible” price level at below wholesale cost. Next, sell Amazon Branded products as an “alternative” and source these at the lowest possible cost to insure no legitimate seller can compete.
C. Cover all this with “no questions asked” returns (paid for primarily by the 3rd party sellers themselves) and by taking massive losses due to unrealistic shipping speeds. These ultra fast speeds serve as an attack against other companies such as Walmart, that can not be crushed by A. and B. above due to size and other market advantages.
The key objective of this strategy is to destroy legitimate retailers and brands at every level. Large brands like Nike, who recently ended a short-lived arrangement to allow its products to be sold on Amazon, are hurt by a relentless cheapening of the brand and a stampede of inferior knock offs and other damaging effects.
Smaller independent retailers are either bankrupted or forced to reduce costs of supply to well below standard wholesale prices. If you are thinking “fell off a truck” you are on the right track.
As a dramatization of the problem it can be said that to sell on Amazon, and realize any profit at all, your source must be either couinterfeit, aftermarket rejects, stolen or….. wait for it….. from a dumpster.
So, to be clear, the “dumpster divers” so lovingly described in the WSJ feature article are not just “poor” they are an inevitable result of a system, built on endless greed by the “richest man in the world” in order to have a virtual monopoly in US online sales (can’t survive without selling on Amazon is the mantra) and to insure future growth by literally destroying all legitimate competition.
Please let me know when this background “color” will be included in the next hard hitting investigative piece from the Journal.
Sunshine Behind the Clouds and the Future in your Hands
Finally, it is all of us, consumers that control the quality of the products and the purity of the supply chain that fulfills sales, online or otherwise. While it is ceratinly convenient to go online and visit either Google, Facebook or Amazon, competition online is, no less than in traditional commerce, essential to maintaining standards of quality and service.
For all Amazon’s “high standards” a deeper look at the system they have in place clearly shows that it is profit for amazon on every sale – and more importantly using income by gouging smaller marketplace sellers to attack larger competitors with unrealistic shipping cost structures, that is most important, not the quality of goods.
For now they will continue to “bribe” the public with a powerful cocktail of virtually instant delivery and “no questions asked” returns. But does that make you feel better about the dumpster sourced lemon curd you just ate? What about the poor seller than has been forced into dumpster diving to have a shot at the huge success of a $20,000 per year income, which Bezos gets in a microsecond. Maybe there are better places to buy your lemon curd.
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.”
Rumors Already Predicting big things for the iPhone 12: 5G plus Starlink will only Add to the Furor…
Seems like just yesterday that Apple Inc. released the iPhone 11 and 11 Pro. Consumers are still riding high on the hype and performance of these latest smartphone models. Nevertheless, Apple is already looking to the future and creating estimates for the iPhone 12 in 2020. According to Digitimes, Apple expects that the iPhone 12 will be one of the company’s most successful models.
While the 11 and 11 Pro are expected to have sold 80 million units by the end of 2019, Apple predicts that they will receive over 100 million orders for the 12 next year.
Apple anticipates such high figures for the iPhone 12 in part due to oncoming innovations in 5G and satellite Internet. While the software and hardware details of the new phone remain shrouded in mystery for now, there is high confidence that the device will be built for the latest advances in Internet speed and 5G networking—a powerful upgrade that is bound to bring in many customers.
Right now, the term “satellite Internet” may seem like something slow, old-fashioned, and used only by people living in remote locations where traditional broadband sources are unavailable. This may be the case at the moment, but new technology known as “Low Earth Orbit” micro-satellites could bring satellite Internet access with fiber optic speeds and beyond. Constellations of these micro-satellites could not only deliver the internet to more people around the world, they could potentially reinvent satellite Internet as a high-speed and perhaps even premiere way for virtually all people to get online.
Many tech companies have been trying to perfect micro-satellites and get the upper hand and dominate the skies. Leading the charge is Elon Musk’s SpaceX, which intends to cover the stratosphere with thousands of low-orbit satellites through its StarLink initiative. The company has already gotten approval by the FCC to launch several thousand micro-satellites into the sky, and they intend to keep launching more until they have a massive interconnected network of satellites orbiting the globe.
Meanwhile, Jeff Bezos, Richard Branson & OneWeb, Google, and Facebook are all playing competitive catch up with SpaceX on the micro-satellite front. Jeff Bezos has been pursuing Project Kuiper, a satellite-oriented task which aims to provide worldwide broadband access via space. While certainly not as far along as StarLink, Kuiper plans to have hundreds of satellites in the sky in the near future.
Google has an alternative route to Low Earth Orbit micro-satellites, relying on weather balloons with antennas to stand in for cell towers and provide service to greater areas—an initiative that the company has coined “Loon.” Simultaneously, Facebook tried to make headway with its “FreeBasics” project, whereby the social network also wants to get more people active and connected on the web, and, of course, logged into its Social Network.
5G Speeds will be the Big Upgrade but the extended Competition and Coverage of Satellites are Next
After purchasing Intel’s 5G modem unit earlier this year, and with 5G modems by Qualcom already widely expected to be in the iPhone 12, Apple is uniquely positioned to be at the forefront of this looming expansion of mobile data networks and satellite internet access points.
It’s important to remember that 5G and satellite internet both have the potential to be much faster than current broadband connections. However, the roll out timing is uncertain and the speed increases will depend on various systems and stages of network build as well as many other factors. For example, an ultra fast satellite system is being built by LeoSat which will be used by Enterprise level customers at up 5.2 Gigabits, close to double the speed of fiber, but this will be exclusively business users, at least initially.
It is the sheer breath of competition and the wide array of systems in the mix that insures that there will be more options, and more speed coming online by 2021. Not only for mobile phones but for mobile laptops and as wireless home and business routing systems also.
What all this means, in a nutshell, for Apple, is that more people will want to buy smartphones that are capable of accessing these newer, faster internet providers. If StarLink (or any of the other upcoming satellite services) can provide a greater fraction of the world with Internet access, more people will desire the latest devices to make full use that Internet. Likewise, these consumers will also want the device that is most compatible with 5G and micro-satellite technology.
Given Apple’s record, the company will probably release the iPhone 12 in September, 2020. 5G will already be in an ongoing build-out phase, with T-mobil launching on December 6, 2019 and Verizon, AT&T and Sprint already in the mix. StarLink will likely not be up and ready by that time—they are aiming for an initial roll out to start as early as mid 2020 and with continuous expansion to 2022 and beyond. However, the project will certainly be further along in becoming a worldwide sensation, with launches of multiple satellites happening every few months.
With 5G speed, and an Operating System fit for the latest forms access in its arsenal, and with the fastest chips and most powerful software and systems to accommodate the added bandwidth, the iPhone 12 has the potential to be a blockbuster of historic proportions, even by Apple’s high standards.
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.
Tech Titans Race to “Give” Internet to Off-The-Grid Populations Across the Globe –
Bezos, Branson, Zuckerberg, Musk, Google, Softbank, Airbus are all vying to own the sky. There are also few companies without the marquee star power in the mix.
Something must be driving the world’s wealthiest into a race against each other to be the first to provide satellite internet access to the poorest and least connected on earth.
It’s all about the Zettabytes
For one, the numbers are staggering: an estimated 4 billion “customers” are not yet connected worldwide. “Unserved” and “Underserved” are the buzzwords, with the majority residing in Africa, India, and parts of South America.
In case you’re not Zetta-aware, a Zettabyte is one trillion Gigabytes, which is the approximate total amount of yearly internet traffic as of 2016.
Expectations for 2020 are in the 2.3 Zettabyte neighborhood (2.3 trillion Gigabytes). To handle the load, provide for the unserved and get to 5G speeds (expected to be the new norm), a major change is needed.
Low Earth Orbit micro-satellite constellations are what’s next. Not to be confused with Geosynchronous, a.k.a. Geostationary, which are fraught with latency issues. Instead, a LEO mesh network constellation can potentially achieve latency at 20-30 milliseconds vs. the 700 milliseconds typical with Geosynchronous systems. Smaller, cheaper satellites that can be launched in bunches (up to 30 per launch) are all the rage.
Speed targets are above 1 Gigabits p.s. (download and upload) and, to takeover for malfunctioning units, spare satellites will be deployed. Network downtime can be reduced to less than 2 minutes per year through this method.
The idea of an ultra-fast internet beamed to the entire earth population within a decade is a mind-blowing concept.
The power in controlling such a network would also be so vast, it’s no wonder those already at the pinnacle are ready to fight each other for the privilege of setting it up. And, of course, to reap the rewards.
“…a discussion about the potentially scary thought of any of these titans owning even more of the world’s tech infrastructure will be on deck in the near future, so stay tuned”
With virtually all the planet’s heavy hitters on board, the race to supply internet worldwide via LEO micro-satellite constellations will likely be decided at the political and governmental level. As much as we’d all enjoy watching a capitalist death-match, being at the mercy of a monopoly larger than any in history? Less enjoyable.
With so much to unpack in the breakdown of who’s-who, a discussion about the potentially scary thought that any of these titans could own even more of the world’s tech infrastructure will be on deck in the near future, so stay tuned.
Microsoft’s Bill Gates and communications mogul Craig McCaw project Teledesic was an early attempt at satellite internet networks, but failed, in the late 90’s / early 00’s.
Now, however, stars appear to be aligned for at least one the the current crop of projects to succeed.
Elon Musk’s SpaceX intends to operate thousands of satellites with low orbiting efficiency. In 2018 the FCC approved a launch of 4,425 satellites (in March) and an additional 7518 (in November), bringing the total approved to 11,943. This group of satellites will comprise the initial Starlink internet constellation. A license application for 1 million earth-stations, to be used by customers, has already been submitted.
The first two Starlink satellites, Tintin A and Tintin B, were launched on February 22, 2018
In order to maintain the FCC’s conditional approval, SpaceX will have to launch at least 6,000 satellites by 2024.
Once that hurdle is crossed they could have 12,000 into space by 2025-2026.
And don’t forget Elon Musk already shot a Tesla Roadster in space via his Falcon Heavy rocket. It has twice the lift-capacity of a NASA Space-Shuttle and could be an ideal transport system for large satellite batches. The Falcon 9 would also be a good choice.
Perhaps SpaceX will get a boost since they avoided the list for possible break-up by the US government that was put forth by Senator Elizabeth Warren, AOC and others.
A betting man would think the satellite systems space race will be won by Elon Musk and SpaceX.
However, the game did appear to change recently when SpaceX’s former execs Rajeev Badyal and Mark Krebs joined Amazon’s “Project Kuiper’. (after allegedly being fired from SpaceX). Recently, in a tweet, Musk called Jeff Bezos a “copy cat” for jumping into the Satellite Internet fray. (note the emoji for the ‘cat’).
“CopyCat” Jeff Bezos has a substantial plan of his own. Project Kuiper is named after astronomer Gerard Kuiper. Kuiper was space theorist and visionary.
Some of his spot-on theories were:
Predicting that carbon dioxide would be found to be a major component to the atmosphere of Mars
That the rings of Saturn are composed of particles of ice
That the Moon’s surface would be “like crunchy snow” (well before Armstrong took his steps).
Bezos’ privately owned Blue Origin project should be a benefit in the new endeavor. Interestingly, Blue Origin is already in a separate, unrelated deal with TeleSat (see more below).
Project Kuiper is Amazon’s first attempt at housing their satellites in space to provide global broadband access. 784 satellites at 367 miles above us are planned along with 1,296 satellites at 379 miles upward and 1,156 satellites at an altitude of 391 miles
These satellites will offer the internet from Scotland through the south most tip of South America. Theoretically, this can cover 95 percent of the Earth’s population. The Earth’s population currently is around 7.7 billion people, half of which still need internet access.
Despite some recent public backlash, Amazon is still incredibly popular in the U.S. However, with so much competition from all sides, even the biggest beast may have an uphill climb.
OneWeb gets huge boost from “friends in high places”
Photo / OneWeb
OneWeb upped the ante on the non-geo stationary orbit concept (LEO), literally, with investments to date totaling $3.4 Billion , as of March.
In addition to AirBus, OneWeb is now also backed by Richard Branson, Coca-Cola and venture capital firm Softbank. Up to 5$ billion may be needed to get their 5G ready network up and running.
After inking the deal with AirBus, the first six satellites were built in France. Now, they are gearing up to continue in Florida. Oddly, the Florida facility is across the street (!) from Jeff Bezos’ Blue Origin Factory.
The first six of the initial 648 were successfully launched on February 27. More Satellites are expected to be launched during the year.
Additional launches for 648 micro-satellites to operate at 750 miles in altitude are planned. The company hopes the constellation will be fully operational by 2021.
Eventually the total number of satellites could rise to 1,972 for which it has acquired priority spectrum license rights. Plans for an additional 2000 have been filed with US regulators.
Google Keeps Searching
Photo / Loon
Alphabet Inc (Google’s parent company) has Loon. Using balloons to take antennas into the stratosphere, a much larger coverage area can be reached vs. a terrestrial tower. (such as a cell tower)
In January a partnership was announced with TeleSat (also partnered recently with Blue Origins, as outlined above) to take the software systems developed for its balloons and apply them to an LEO micro-satellite constellation.
https://youtu.be/MiEZfRh-h-s
Telesat currently envisions between 292 and 512 satellites in orbit and initial commercial services are planned to commence by 2022.
In July 2018 Google announced that Loon along with Wing, both initially founded as “X moonshot projects“, would henceforth be full independent companies within the Alphabet Corporate Umbrella. In addition to the TeleSat project, Loon plans to partner with mobile carriers across the globe. An example of this is the current deal with Telekom Kenya, which Loon is helping to extend its coverage to remote areas of the country.
Facebook Pulls Out…All The Stops
Animation from Teledesic showing a complete satellite constellation with full coverage of the earth
Although perhaps founded with the best intentions, Facebook’s “FreeBasics” project somehow always appeared to involve tailoring its approach in order to serve its own interests.
After allowing only Facebook-sanctioned services and data to FreeBasics users it came with little surprise that a public backlash emerged.
In February of 2016, Free Basics was banned in India for unlawfully prioritizing certain sites over others. However, Free Basics is still up and running in over sixty countries. Facebook also still has a vast influence in Africa.
Facebook estimates that its efforts to increase internet connectivity worldwide, over 100 million new users are now online.
LeoSat: All Biz at the High End
Photo / Thales Alenia Space
Focusing on speed, full earth coverage, direct sat-to-sat optical links without the need for terrestrial stations, LeoSat is positioned to be a serious and unique entrant into the satellite wars.
Designed for large business and government customers, LeoSat already has over 1$ billion in pre-booked orders from enterprise level clients. In March, a new contract with Saudi Arabian communications firm SkyBand was announced.
Based in Washington D.C., LeoSat has set 2022 as its target date for between 78-108 satellites to reach orbit. As with some other competitors above, an initial launch of 2 satellites is planned for 2019.
Using its unique high throughput satellite system (HTS) an optical laser-based backbone will be implemented in space. The backbone will be comprised of 118 LEO satellites in an MPLS network, each with a direct laser based optical link to the others.
This will achieve a projected speed of 1.5 times current land-based fiber-optic networks at 1.6 to 5.2 Gigabits p.s., all without terrestrial touch-points in a globally interlinked constellation.
Without a hyper-famous heavy hitter, LeoSat is still not to be overlooked. More than just an a company with an Apt brand name, LeoSat has a solid list of accomplishments and a serious plan to compete in its chosen niche.
Amazon scrapped plans for its contentious HQ2 project in Queens, New York, following backlash from local lawmakers and unions. The cancellation came after much fanfare, and a sweepstakes like fervor from city and state officials (including Governor Cuomo, and Mayor de Blasio) who made clear they were in favor of the deal. The agreement to lure Amazon with government incentives became a subject of great debate due to a climate of high cost of living, lack of affordable housing and rapid gentrification.
The 2.8 billion dollars in incentives offered to Amazon came with promises to jumpstart the Queens waterfront, and also included a helicopter pad for CEO Jeff Bezos. The Amazon/Queens location deal came under fire and skepticism for largely being brokered behind closed doors. This lead local community leaders to petition door to door for it to be blocked.
“….. a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.”
Alexandria Ocasio-Cortez was among the chorus of local politicians and advocates taking the debate to the public. In a statement, Amazon applauded Governor Cuomo, and Mayor de Blasio for their cooperation. Amazon also took the opportunity to state that (unnamed) “state and local politicians” “oppose our presence”.
Representative Ocasio-Cortez tweeted her clear opposition and stance, indicating that she may be among the politicians referred to in the statement:
Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world. https://t.co/nyvm5vtH9k
