CRIMINAL CAPITALI$M

Amazon punished its own sellers to limit Walmart's reach, FTC says

Thu, November 2, 2023 



By Siddharth Cavale and Arriana McLymore

NEW YORK (Reuters) - Amazon.com Inc punished its own sellers to limit Walmart's reach as Walmart got into e-commerce, according to the Federal Trade Commission (FTC).

In addition to making $1 billion by using a secret algorithm called "Project Nessie" to push up the prices that U.S. households pay, Amazon may have also succeeded in curbing Walmart's ambitions.

In 2014, the arrival of Jet.com triggered fear at Amazon that Jet.com would be able to offer shoppers lower prices online, the FTC said on Thursday, kick-starting Amazon's strategy of removing sellers’ offers from the Buy Box if shoppers could find the same products at lower prices on Jet.com. The Buy Box is the button that allows shoppers to make a purchase directly from a seller.

Walmart acquired Jet.com in 2016.

"Given Amazon's size and a scale, their quantitative analytical might, and particularly, against the background that they had not made a profit on (Amazon.com) for the first 20 years, it's not surprising that they would resort to such tactics against competitors," retail consultant Burt Flickinger said.

Like Amazon, Walmart operates a third-party online marketplace, with merchandise from thousands of independent sellers. On Amazon, millions of independent merchants currently sell goods its marketplace. Both Walmart and Amazon collect fees and commissions from the merchants on their platforms.

By not collecting seller commissions, Jet.com could offer prices that were 10% to 15% lower than what Amazon advertised, the FTC said in a less-redacted version of a previous complaint against Amazon. This, Amazon realized, could result in sellers passing on those savings to customers, the FTC said.

To hamstring Jet.com, Amazon removed some third-party sellers' offers from its Buy Box. The complaint cites one Amazon seller who adopted a policy of making "absolutely sure that our products are not priced lower on Walmart than they are on Amazon" because of pressure from Amazon.

Amazon also deployed what the FTC described as anti-competitive algorithms against Jet.com's most popular products leading to Jet revising its strategy to match the lowest prices elsewhere, the FTC said.

Amazon spokesperson Tim Doyle said the FTC "grossly mischaracterizes" the pricing tool and the company stopped using it several years ago.

Walmart shut down Jet in 2020 and incorporated it into its wider e-commerce business.

Walmart declined to comment as it was not part of the FTC litigation, a spokesperson said.

(Reporting by Siddharth Cavale and Arriana McLymore in New York; Editing by Vanessa O'Connell and Lisa Shumaker)

Amazon Boosted Junk Ads, Deleted Messages to Thwart Antitrust Probe, FTC Says

Leah Nylen and Matt Day
Thu, November 2, 2023



(Bloomberg) -- Amazon.com Inc. doubled the number of junk ads to boost profits and deleted internal communications to thwart a federal antitrust probe, according to fresh details released by the US Federal Trade Commission in a less redacted complaint against the online retail giant Thursday.

Amazon’s founder and former Chief Executive Officer Jeff Bezos personally ordered executives to accept more ads, even ones the company had internally labeled as “defects,” indicating they weren’t relevant to user searches, according to the new version of the complaint.

The FTC alleges that Amazon’s increased use of ads boosts profits while it harms sellers and consumers, making it harder for shoppers to find products they are searching for. “We’d be crazy not to” increase the number of advertisements shown to shoppers,” the FTC quoted Amazon executives as saying.

One executive compiled a number of the defective ads showing “buck urine” showing up in response to searches for “water bottles” or T-shirts for the Los Angeles Lakers basketball team in response to queries for the Seattle Seahawks football team merchandise.

In third quarter 2023 earnings announced last week, Amazon reported advertising revenue of $12.1 billion, making the company’s ad unit its fastest-growing business.

Amazon said its search results consider a number of factors and users can easily refine their results.

“Amazon works hard to make it fast and easy for customers to find the items they want and discover similar options by providing a mix of organic and sponsored search results,” Amazon spokesperson Tim Doyle said. He also cited a study by a London marketing firm that found consumers find Amazon ads relevant and useful.

In an email later Thursday, he added: “The claim that Amazon leadership directed employees to accept more advertising defects that would degrade the customer experience is grossly misleading and taken out of context, and does not reflect Amazon’s longstanding dedication to continually improving the customer experience.”

‘Disappearing Message’

The FTC also alleged that the company deleted internal communications using the “disappearing message” feature of Signal and destroyed more than two years’ worth of such communications, from June 2019 to at least early 2022.

Amazon denied that its employees deleted messages, saying the company informed the FTC about the Signal usage, “painstakingly collected Signal conversations from its employees’ phones, and allowed agency staff to inspect those conversations.” Some executives began to use the encrypted communications app after Bezos disclosed in 2019 that his phone had been hacked and alleged the National Enquirer tabloid sought to publish his intimate photos and texts.

The agency sued Amazon in September, accusing the e-commerce giant of monopolizing online marketplace services and stifling competition. The complaint alleges the company illegally forces sellers on its platform to use its logistics and delivery services in exchange for prominent placement and punishes merchants who offer lower prices on competing sites.

Amazon has said it will challenge the lawsuit in court, adding that it “radically” departs from the agency’s mission of protecting consumers and is “wrong on the facts and the law.”

The original complaint was heavily redacted, blacking out information about Amazon’s operations, including details about the company’s scale, its Prime subscriber base and a pricing algorithm called “Project Nessie” that the agency said foisted higher costs on shoppers, belying the company’s claim to prioritize the welfare of its customers.

Over the ensuing weeks, the FTC and Amazon wrangled over what details could be publicly shared, with the company determined to protect information that could provide competitors insights into its e-commerce strategy and business metrics.

Seller Fulfilled Prime

According to the FTC’s new complaint, 98% of Amazon sales occur directly from the so-called “Buy Box” where the company selects one featured offer from among the sellers hawking a specific product.

The FTC alleges that Amazon has illegally tied use of its marketplace with its logistics service – Fulfillment by Amazon – where merchants pay to have Amazon take care of warehousing and shipping. Using the logistics service helps ensure a merchant’s products qualify for Amazon’s Prime subscription service and the featured offer in the “Buy Box.”

Amazon began offering a program called Seller Fulfilled Prime in 2015 that allowed merchants to qualify for the speedy shipping promise without using the company’s logistics service, the FTC alleged. At its peak, 15,000 sellers were using it, according to the FTC. Amazon worried internally that the program was “[s]trategically risky” and could damage the company’s own logistics service, the FTC alleged, with a senior executive saying he was “losing [his] mind” after United Parcel Service Inc. was advertising to merchants that it could fulfill orders.

In 2019, Amazon stopped accepting new merchants into the program.

“Amazon decided to prioritize excluding rivals and foreclosing competition, even if it came at a cost to Amazon’s customers,” the FTC alleged.

In a statement, Amazon said the FTC cited “misleading figures” and its original program didn’t meet “the high standards and expectations our customers have for Prime.”

‘Project Nessie’

The FTC alleged that Amazon created an algorithmic tool, nicknamed Project Nessie, that generated more than $1 billion in additional profits for the company by raising prices in its marketplace.

Amazon and many other online retailers use automated tools to match pricing to what competitors are charging. Realizing that many websites set their pricing tools to correspond with Amazon’s marketplace, the company created Nessie to raise prices on products that other retailers would match, the FTC alleged.

“The FTC claims that an old Amazon pricing algorithm called Nessie is an unfair method of competition that led to raised prices for consumers,” Amazon said in a statement responding to the new details in the less redacted complaint. “This grossly mischaracterizes this tool. Nessie was used to try to stop our price matching from resulting in unusual outcomes where prices became so low that they were unsustainable.”

Bloomberg Businessweek

Unredacted documents in the FTC's Amazon lawsuit shed light on the company's secret price-gouging algorithm

"Project Nessie" is a series of algorithms that Amazon allegedly used to raise prices by over $1 billion in just two years.

Stephanie Barnes
·Contributing Writer
Thu, November 2, 2023 


It looks like Amazon is hellbent on keeping its spot as the biggest online retailer — even if that means hurting both sellers and customers. In September, the FTC filed a long-expected antitrust lawsuit against Amazon over its alleged use of illegal strategies to stay on top. Details of the suit were previously withheld from the public, but today a mostly unredacted version was released, including details about Amazon's secret pricing tool, known as Project Nessie. These algorithms helped Amazon increase prices by over $1 billion over two years, the FTC alleges.

As Amazon would argue, Amazon's dominance of the online retail space has helped small businesses reach more consumers. But the FTC would argue that over the years, Amazon has become exploitative in its approach. The company continues to increase third-party seller fees, which are taking a toll on smaller businesses and even causing bankruptcy for some. Amazon previously said these claims were baseless, but the documents revealed today show otherwise.

According to the The Wall Street Journal, the internal documents cited in the original complaint show that Amazon executives were well aware of the effects of the company's policies. In the documents, Amazon executives acknowledged that these policies, which included requiring Amazon sellers to have the lowest prices online or risk consequences, had a “punitive aspect.” One executive pointed out that many sellers “live in constant fear” of being penalized by Amazon for not following the ever-changing pricing policy.

The FTC also alleges that the company had been monitoring its sellers and punishing them if they offered lower prices on other platforms, which the agency says is a violation of antitrust laws. The unredacted documents indicate that Amazon has increased prices by over $1 billion between 2016 to 2018 with the use of secret price gouging algorithms known as Project Nessie. It was also revealed that the "take rate" — aka the amount Amazon makes from sellers who use the Fulfillment By Amazon logistics program — increased from 27.6 percent in 2014 to 39.5 percent in 2018. It's unclear if that has changed in more recent years since those numbers remained redacted.

And Amazon isn't just ruining its sellers’ experience. The complaint also revealed Amazon's increased use of ads in search results. Several ad executives at the company acknowledged that these sponsored ads were often irrelevant to the initial search and caused “harm to consumers" and the overall experience on the site.

The FTC alleges that these policies were the brainchild of Jeff Bezos, Amazon’s founder and former chief executive, to increase the company's profit margins.

“Mr. Bezos directly ordered his advertising team to continue to increase the number of advertisements on Amazon by allowing more irrelevant advertisements, because the revenue generated by advertisements eclipsed the revenue lost by degrading consumers’ shopping experience,” the FTC complaint alleges.

Unredacted FTC suit shows 'Project Nessie' price-raising algorithm made Amazon $1.4B



Devin Coldewey
Thu, November 2, 2023 

Image Credits: FTC


The mysterious "Project Nessie," hinted at in what little was not redacted in the FTC's lawsuit against Amazon, is indeed an algorithmic pricing scheme that raised prices where it could do so safely, generating some $1.4 billion for the company during its years of operation. No wonder Amazon wanted to keep it under wraps!

The FTC's allegations of anti-competitive behavior cover a number of different practices, among them price manipulation. And the poster child for this practice was Project Nessie.

Unfortunately, when the lawsuit was filed, it was full of redactions, and Nessie was clearly the biggest risk, with every mention and entire pages of the section dedicated to it blocked by black bars. But the process in court is that these redactions must be first honored and then defended — and clearly the argument of public interest won out over Amazon's preference.

And so the newly unredacted lawsuit is sporting far fewer stripes, though the occasional proprietary or internal figure is still blocked out. But most importantly, we have a full account of Project Nessie:

Alongside these anti-discounting tactics, Amazon also goes a step further and hikes prices directly and outright. Amazon created a secret algorithm internally codenamed “Project Nessie” to identify specific products for which it predicts other online stores will follow Amazon’s price increases. When activated, this algorithm raises prices for those products and, when other stores follow suit, keeps the now-higher price in place.

Essentially, Amazon observed that other stores tended to follow the Amazon price on some products, but others didn't. Say Amazon raised the price of a sheet set from $25 to $30. Perhaps Bed Bath & Beyond would raise their price too, but Walmart stood tough at $25. That's not great for Amazon because it meant that customers might find that lower price and shop there instead.

But take another situation, where Amazon raises the price of a keyboard from $30 to $40. Perhaps the maker of that keyboard is the only other place that sells it, and they had matched Amazon's price so as not to lose sales. So now they can safely raise it to $40 too. Bonanza! Amazon gets an extra $10, and no one can find a cheaper price anywhere. Of course, the customer loses $10.

By systematically analyzing which products and which competitors resulted in "safe" price increases like the latter, Amazon could arbitrarily raise prices and extract additional profit from customers like you and me. (For the record, the feature is in fact what I guessed it was from the little we could see in the original redacted document.)

The FTC just hit Amazon with a major antitrust lawsuit

Now, Amazon disputes this characterization of Nessie. In a comment issued to The Wall Street Journal when the outlet reported some of this information last month, they said the tool was intended to "try to stop our price matching from resulting in unusual outcomes where prices became so low that they were unsustainable. The project ran for a few years on a subset of products, but didn’t work as intended, so we scrapped it several years ago."

The documents cited by the FTC paint a different picture. The project ran for five years, and whatever intentions Amazon had for it, it generated about $1.4 billion in additional profits. Amazon is quoted as deeming Project Nessie "an incredible success," which somewhat contradicts their more recent statement. And if it was strictly about preventing "unsustainable" low prices, it doesn't make sense that it would only target retailers that would match Amazon's markups.

That it was "scrapped" is also questionable, since in 2022 the CEO of Worldwide Amazon Stores Doug Herrington suggested turning on "our old friend Nessie, perhaps with some new targeting logic" to boost retail profits. Nessie has indeed slipped under the waters, but the FTC is clear that it could just as easily emerge again if Amazon liked. Now that the heat is on, however, that seems unlikely.

I asked Amazon about these seeming contradictions and the company declined to comment beyond its original statement. They may, however, have more detailed refutations in store in their own court filings, though on this matter of Nessie, they may well decide that discretion is the better part of public opinion.

“Subbies” at Amazon in Germany

By Thomas Klikauer

February 6, 2024

Source: Originally published by Z. Feel free to share widely.

Image by Thomas Klikauer, https://www2.lunapic.com/editor/

The exploitation of workers under capitalism is nothing new. In line with that, a sophisticated system of exploitation exists at Amazon. It occurs almost globally even in a so-called high-wage country like Germany.

Yet, workers at the super low wage and high work pressure corporation – Amazon, believe, “we are people, not machines”. Currently, Amazon’s outsourced delivery workers – called subbies – have to distribute around 270 Amazon parcels per day.

These subbies are forced to work for Amazon’s subcontractors who tend to disregard employee rights. In other words, through the subcontracting system, Amazon is (technically) outsourcing Germany’s labor laws.

Yet, these outsourced, indirect, or semi-Amazon workers were told by their Amazon bosses, “if you have problems with the boss, call us!” Bosses can be heard telling the – empty – phrase repeatedly.

And to encourage this, union representative Rudolf Rocker hands out a flyer through the windows of delivery vans that are waiting at the gates of the Amazon distribution center just behind Germany’s capital, Berlin.

Usually, there is no time for more than one short exchange and Rocker must be quick, since Amazon limits the time allowed to be at the company premises called “Verteilzentrum Hoppegarten”.

Rudolf Rocker works at Faire Mobilität. It is a counselling service for workers ran by Germany’s union peak body, the DGB. Since many drivers are migrant workers, Rocker and his colleagues have flyers in ten different languages. Rocker’s Fair Mobility flyer says you want to make your helpline known. We can help Amazon drivers with labor law problems.

Amazon is popularly known for its so-called Black Friday Weekend Sale. This is when Amazon runs a big discount battle at the end of November and when the retail trade’s long advertised pre-Christmas hyped-up sale – mass consumerism is on steroids.

One might expect this Amazon-driven consumer hysteria to only occur in the USA, but it has also reached Germany. In fact, it is around the world – with the possible exception of Cuba and North Korea, perhaps.

Back in Germany, and for the semi-employees of Amazon, the drivers – most of them men, but also some women – this is the most stressful time of the year.

The number of packages that must be carried per shift is soaring while the pressure to deliver parcels on time is getting worse. A young man from Albania who had only been working at Amazon for two months says, work is hard. He often has heavy packages to carry up and down the stairs numerous times and is also forced to hurry a lot.

Like most semi-Amazon workers, he is completely exhausted after his shift. Worse, work rules at Amazon are rather incomprehensible. Once, he told his boss that he was sick, but the boss simply said, “you definitely need to come”. He didn’t know what would happen if he didn’t comply, so he did come in to work despite feeling sick.

Meanwhile, the Albanian worker listens with interest to what Rudolf Rocker tells him about his labor rights. Yet, one can also see the confusion among the Amazon workers. What they learn sounds completely different to what their Amazon and subbie bosses tell them.

Generally, most of the outsourced Amazon drivers do not speak Germany’s native tongue. Others might simply prefer Oscar Wilde’s “life is too short to learn German”.

For many of them, it is their first job and the first time they have entered the German labor market. On that, the trade union’s Fair Mobility offers vital advice on employment law. And it does this in various languages. The project educates employees about their labor rights and helps workers to understand how corporations violate Germany’s labor law.

It assists workers, for example, if overtime is not paid or Germany’s minimum wage is violated. In addition to delivery workers (Amazon, etc.), workers in construction, in the meat industry, seasonal workers in agriculture are also the focus of Fair Mobility.

Back at Amazon’s depot, most drivers like to open the van’s window when they see Rocker and his colleagues in their bright and shiny trade union vests. Yet only some wave Rocker and his people off. They have no time, and they must quickly move on.

On the upswing, there are many vans that have to wait until they are allowed to drive onto the Amazon site to be loaded up. Hence, they have time for a short conversation.

Many take their working conditions with a kind of gallows humor. Rudolf Rocker with his long hair tied back oftentimes jokes with the Amazon drivers in German, English, and Polish. Again and again, you can hear his loud laughter.

The distance from the Amazon depot located at the outskirts of Berlin to the Polish border is almost 100 kilometers. Some of the drivers travel every day from Poland and back after their shifts. When Rocker asks the drivers for which company they work for, he gets a different answer almost every time.

Drivers aren’t directly employed by Amazon. They work for subcontractors. Mostly, these are small logistics companies, often with only a handful of employees. The system of subcontracting gives the legal and visual impression that they do not work for the monopolist Amazon.

Yet, in economic terms, they do. They depend on Amazon. In short, subcontracting is “exploitation by design”, as one German newspaper called it. This is the true raison d’être of the subcontracting system. Worse, the subbies and workers are forced to compete with one another while, at the same time, being dependent on a single monopolist: Amazon.

What further increases work pressure is the fact that many of the vans that are waiting in line in front of Amazon’s entrance, are rental cars. These vans are therefore, without the Amazon logo nor their own (subcontracting) company’s logo. And having to rent these vans to be used for their deliveries adds costs to the subbies’ already dwindling pays.

This deliberately engineered subcontracting system gives Amazon the corporate power to shift nearly all responsibilities away from Amazon. It is the master setup (read: scam) for, not just corporate Uber-exploitation but managerial despotism. Amazon is free to play one subbie against the other. It is sheer heaven for the reactionary-neoliberal rational choice theory.

From conversations with Amazon’s subbie-drivers by the car door, it becomes clear that working conditions differ from subcontractor to subcontractor:there are no uniformed rules on wages and so-called surcharges;
on the recording (read: and the “not” recording) of working hours;
on dealing with sick days, holidays, and annual leave;
on overtime: that is paid sometimes and sometimes not; and,
on how working time is counted, if at all.

Many subcontractors would hold short business meetings with their drivers in the parking lots around the Amazon site at the beginning of the working day. But – “officially” – the actual shift of employees only begins when their cars have been loaded with packages.

If Amazon really wanted to know what the subcontractors were doing, they would only have to contact the drivers. Yet, Amazon does not seem to be interested in contacting Subbies.

Amazon could have all the information they want. But Amazon does not seem to want to change anything. Meanwhile, workers suffer while profits are made. Workers tell the same story repeatedly. If someone fights back or violations are discovered, the subcontracting company is simply closed down and re-appears under a new name, shortly thereafter.

Amazon doesn’t care much about all that. Yet, Amazon’s corporate spokesman notes that its work arrangements place a so-called “high demand” on subcontractors. Amazon also claims that it regularly checks delivery “partners” to make sure they are complying with applicable laws and their policies and that they take action if they are not.

The euphemistically called “partners” are those that are played off against one another in an effort to drive down costs – for Amazon, naturally. At times, competition works beautifully – for the monopolist.

Meanwhile, Amazon’s statement essentially confirms the off-loading of responsibilities onto others. In economic terms, Amazon’s parcel delivery is offloaded onto others. To put simply, these subbies are just an externality to Amazon.

In addition, Amazon tends to keep quiet. It does not reveal how many cases of “work rule” violations there are. The system is set up so that these are the violations of for subcontractors – not Amazon’s violations. Of course, there is a driver “hotline” which Amazon’s subcontracted delivery drivers can contact – anonymously – in case of problems.

Officially, Amazon promised that it will investigate every case and clarify possible problems with the responsible employer. This too, confirms Amazon’s offloading attitude towards its parcel delivery service.

On any given day during December 2023 and a good two weeks after the union’s Fair Mobility campaign had started, the atmosphere at the gates of Amazon’s distribution center got significantly worse.

On one morning during December 2023, there was a heavy snowstorm in the region where Amazon’s warehouse is located. As a consequence, in early morning and evening, the road to Amazon’s warehouse became dangerous for its delivery vans. Those Amazon’s subbie drivers who made it to the warehouse look worried and exhausted.

Yet, workers say that Amazon doesn’t care what kind of weather it is. And that Amazon does not care if workers have an accident. Worse, as delivery vans are overloaded with Amazon parcels on any given day; work drags on well into the evening for these drivers.

As a consequence, these drivers are faced with customers who no longer open the door for drivers once it’s dark. But, according to the Amazon system, the drivers are forced to deliver Amazon’s packages regardless, as nobody is allowed to come back with undelivered packages.

The morning of the snowstorm was just nineteen days away from Christmas – Amazon’s peak season. After Christmas, there is no easing up as the ‘returns’ business starts. During this time, each Amazon-subbie must deliver 270 parcels – daily – during the weeks before Christmas.

The workers who tell those stories wants to remain anonymous for fear of their employers: subbies and Amazon. So much for free speech under capitalism.

Unsurprisingly, workers have never heard of any complaint made to the “hotline” Amazon’s corporate spokesperson has mentioned. Meanwhile, transport vans drive onto Amazon’s company premises in so-called waves. This is done with a time delay because not all of these vans can be loaded at once. Once inside Amazon, drivers have exactly 15 minutes to fill their vans with the pre-sorted packages.

Once out on a delivery, they use two Apps: one that sets the route and one that monitors (read: controls) their driving behavior. A half-hour break is provided for each shift. The route App is not usable during this time. Yet, it is impossible to make all the stops if a driver takes a half-hour break. So, drivers use a trick:

they photograph the view of the route App with their private mobile phone or write down the addresses of the next stops, in order to be able to continue to deliver, even if the App is blocked during the break time.

Many workers say that they often work between eleven to twelve hours at this busy time of the year. Subbies have to work until they have delivered all the packages.

Today, more and more people from Romania and Bulgaria are working in Germany for Amazon. These Romanian and Bulgarian subbies never complain, and according to a German delivery driver, they tend to comply with the demands of their bosses.

Beyond all that, Amazon doesn’t really care what exactly happens to the parcels, whether a driver leaves them in a hallway, or with neighbors, or on a doorstep. The main thing is that the van is empty when a driver gets back. Yet, if one of the packages disappears, the damage will be deducted from the driver’s salary – regardless of whether or not there is any wage left, if at all for the driver. It is pure capitalism.

The people at the union-based Faire Mobilität are familiar with cases of monetary claims by their bosses against individual drivers. Unsurprisingly, Amazon claims that this actually occurs. But it is done so that it does not have negative consequences for the drivers when they return the packages.

The corporate system of subcontracting works for Amazon. However, it does not seem to work for the drivers who actually deliver the parcels.

Amazon claims that packages could be returned to an Amazon delivery center, after which another delivery attempt will be made the next day. In the event of “proven misconduct”, the (what Amazon euphemistically calls) “cooperation” with a subcontractor or a driver will be terminated. The word “cooperation” camouflages the direct dependency of subcontractors on Amazon.

Beyond that, Amazon even believes that all of this is, at is says, in the interest of safety of our customers, and our employees, and even society. This is an outstanding example of corporate public relation, i.e. propaganda.

For many Amazon subbies, their work is their life. It is driving for Amazon, going home, showering, sleeping, repeat – there is nothing else. Another worker says that he didn’t get any wages at all in the previous month. He had an accident because he was so stressed over Amazon’s work pressure. Therefore, he had to pay for the damage. Two weeks earlier, Rudolf Rocker heard a similar story.

The fact that drivers must pay for damages themselves is the rule in many of Amazon’s subcontractors. The same applies to penalties, fines, and tickets if drivers are stopped or caught exceeding the speed limit due to work pressure. Many Amazon subbies are desperate. One driver says,


we are people, not machines.

Workers also say that they want to work, but they cannot work like that, and that they get sick from it. Amazon’s work pressure will kill them. One worker acknowledges that until about three or four years ago, conditions were a little better.

And today, with more and more people from Romania and Bulgaria who are working as subbies for Amazon, the old and proven method of playing one worker against the other is strong.

In fact, Amazon and subcontractors are comparatively attractive employers for people who have previously worked in, for example, Germany’s meat industry. Hourly wages are often slightly higher than the legal minimum wage. Working in the cold stores of the meat industry is physically and mentally more stressful.

If workers can speak some German or English, they apply at the Amazon warehouses, and if they have a driver’s license, they work as a driver for one of Amazon’s subcontractors.

In the end, there are also ways for politicians to help employees in Germany’s low-wage sector from being pitted against each other. One of these options would be a ban on subcontractors – only – in the so-called CEP industry: the courier, express and parcel services.

Germany’s Verdi trade union is calling for such a ban, and the progressive political party – Die Linke – in Germany’s federal parliament – the Bundestag – has tabled a corresponding motion.


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Thomas Klikauer has over 800 publications (including 12 books) and writes regularly for BraveNewEurope (Western Europe), the Barricades (Eastern Europe), Buzzflash (USA), Counterpunch (USA), Countercurrents (India), Tikkun (USA), and ZNet (USA). One of his books is on Managerialism (2013).

MONOPOLY CAPITALI$M
Amazon deprives competitors of critical mass: FTC Chair Lina Khan

Amazon’s antitrust suit culmination of years of work from FTC’s Khan


Alexis Keenan
·Reporter
Wed, September 27, 2023 

A day after the US Federal Trade Commission and 17 states filed a landmark antitrust case against online retail giant Amazon (AMZN), the agency’s chair Lina Khan said Amazon.com is depriving online superstore competitors of the critical mass needed to compete.

“In short, Amazon has a policy that punishes sellers or retailers that lower their price anywhere other than Amazon,” Khan said in an interview Wednesday with CNBC. “At the same time, Amazon is also steadily hiking the fees the seller pays. Sellers have to inflate their price not just on Amazon, but also across the rest of the internet.”

The novel argument is expected to be a tough one for the agency.

FTC filed an antitrust case against Amazon on Tuesday. (Paul Sakuma/AP Photo)

Antitrust law, designed to protect consumers through open competition, regards low prices as evidence that consumers' interests are served. While the agency admits that Amazon's policies push sellers to offer their products at the lowest prices on Amazon, it argues Amazon’s prices never dip as low as they would in a genuinely competitive market.

The company’s scale, the FTC claims, ensures that some sellers must sell on Amazon.com to survive. And with the market cornered, it slowly increased fees charged to sellers for each sale, according to the agency.

“The consequences of that are very serious for sellers who now pay one out of every $2 to Amazon,” Khan told CNBC. “So this is effectively a 50% tax that businesses pay to Amazon to reach shoppers. And that, in turn, leads prices and it inflates prices across the internet.”

The FTC says Amazon is illegally monopolizing two markets: online superstore retail — where consumers shop for products — and online superstore retail services — where sellers list, sell, and ship their items.

Amazon responded to the FTC’s complaint saying the agency's theory is wrong.

“The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store," David Zapolsky, Amazon senior vice president of global public policy and general counsel, said in a statement.

"If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers, and reduced options for small businesses — the opposite of what antitrust law is designed to do.”

At Amazon's request, portions of the FTC's claims were redacted from the publicly filed version of its lawsuit. In her interview on Wednesday, Khan said the complaint contains direct evidence of Amazon hiking prices and steadily increasing fees charged to its third-party sellers.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.

Judge assigned to US antitrust case against Amazon recuses himself

Reuters
Wed, September 27, 2023 



(Reuters) - The judge assigned to the U.S. Federal Trade Commission's antitrust lawsuit against Amazon.com has recused himself from the case, according to a court document filed on Wednesday.

Senior Judge John Coughenour was assigned to the case on Tuesday, when the antitrust lawsuit was filed against Amazon in federal court in Seattle. Coughenour, an appointee of Republican former President Ronald Reagan, did not cite a reason for dropping off the case in the court filing.

The case has been re-assigned to U.S. District Judge John Chun based on rotation, according to the document.

Chun was nominated by President Joe Biden last year. He was previously a judge for the Washington State Court of Appeals.

The FTC in its lawsuit accused Amazon of abusing its power in the retail market as an ecommerce giant by unfairly giving preference to its own products and punishing merchants that want to sell products for lower prices on other platforms.

Amazon is facing a series of similar but smaller private consumer cases filed in recent years that are pending in the same U.S. federal court with Judge Ricardo Martinez and the FTC has argued its case should be assigned to the same judge to avoid duplication or conflict.

(Reporting by Abhirup Roy and Mike Scarcella; Editing by Leslie Adler)

Factbox-Amazon antitrust lawsuit latest in US efforts to rein in big firms' clout

Reuters
Wed, September 27, 2023 


(Reuters) - U.S. antitrust regulators on Tuesday filed a lawsuit against Amazon.com accusing the online retailer of harming consumers with higher prices, the latest in a long history of tough action against monopolies that can be traced back to the breakup of Standard Oil.

More recently, Federal Trade Commission (FTC) regulators have targeted Big Tech including Alphabet's Google and Meta Platforms' Facebook.

Here is a list of attempts by regulators to split up big companies:

Standard Oil (1911)- Regulators alleged John Rockefeller's Standard Oil held the monopoly in the oil business by using aggressive pricing to eliminate competition. Standard Oil was broken up into 34 companies. Some of these independent firms now include ExxonMobil and Chevron.

Aluminum Company of America (Alcoa) (1945)- The Justice Department charged Alcoa with illegally monopolizing the aluminum market and demanded the company be dissolved. The case lasted years and the government sold aluminum production plants built during the war to Reynolds Aluminum and Kaiser Aluminum, creating a competitive market.

Paramount Pictures (1948) - The U.S. Supreme Court ruled in a landmark antitrust case, also known as "Paramount case" or the "Hollywood antitrust case," that film studios could not legally own their own theaters, hitting the vertical integration of companies. It forced Paramount to cleave theaters from the studios.

IBM (1982) - The U.S. government initiated an antitrust investigation into the dominance of IBM that lasted for 13 years. The case was later withdrawn and the IT software and services provider remained intact.

AT&T (1984) - In 1974, the U.S. government filed an antitrust lawsuit against AT&T because it had a monopoly on telephone lines. After eight years of litigation, the two sides reached a settlement that led to AT&T giving up control of its regional operating companies, or "Baby Bells".

Microsoft (2001) - A U.S. District Judge ordered a breakup of the company over antitrust claims but appellate judges rejected it. The Justice Department and Microsoft reached a settlement in November 2001.

Meta Platforms (2023) - An appeals court ruled in favor of Meta by refusing to revive a lawsuit filed by states against its Facebook unit over alleged antitrust law violations.

Both the FTC and the states had asked the court in 2020 to order Facebook to sell Instagram, which it bought for $1 billion in 2012, and WhatsApp, which it bought for $19 billion in 2014.

(Reporting by Jaspreet Singh and Zaheer Kachwala in Bengaluru; Editing by Sriraj Kalluvila and Josie Kao)

Factbox-FTC's Amazon complaint zeros in on seller prices, logistics

Reuters
Wed, September 27, 2023 


WASHINGTON (Reuters) - The U.S. Federal Trade Commission filed a lawsuit against Amazon.com that accused the online retail giant of overcharging customers and independent sellers on its platforms as the $1 trillion company sought to illegally maintain monopoly power.

These are the specific allegations included in the FTC's 172-page complaint:

ONLINE SUPERSTORE, SERVICES MONOPOLIES

*The agency alleged that Amazon had a monopoly in an online superstore market. In 2021, Amazon had 77% of the market, Walmart had 13% and Target 2%.

*The agency also said that Amazon had a monopoly in the online marketplace for services, where Amazon has more than 70% of the market. The FTC said that more than 160 million people in the United States visit Amazon's website each month.

PUNISHES SELLERS FOR LOWER PRICES ELSEWHERE

* The complaint alleged Amazon uses a sophisticated network of web crawlers that identify which of its sellers offer their products more cheaply on other platforms. Amazon allegedly punishes those sellers, who make up about 60% of Amazon's sales, by making them harder to find on its platform.

"Because Amazon's anti-discounting conduct punishes sellers who offer lower prices at rival online stores with lower fees, many sellers set their price on Amazon- high fees and all - as the price floor across the internet," the FTC said in the complaint.

REQUIRES USING AMAZON LOGISTICS

* Amazon requires sellers under Amazon's Prime feature to use the company's logistics and delivery services even though many would allegedly prefer to use a cheaper service or one that would also service customers from other platforms where they sell.

CHARGES HIGH FEES

*The complaint alleges Amazon raised average fulfillment fees to sellers about 30% between 2020 and 2022, as well as requiring them to pay for referrals and advertising. The FTC alleged that between sellers paying for search placement, fulfillment and other charges that Amazon takes nearly half of what sellers make on their sales.

MONITORING PRICES

* Amazon used the Project Nessie pricing system as an unfair method of competition. A description of Project Nessie was heavily redacted. An Amazon blog described it as "a system used to monitor spikes or trends on Amazon.com."

(Reporting by Diane Bartz; Editing by Jamie Freed)

The FTC just hit Amazon with a major antitrust lawsuit


Taylor Hatmaker
Tue, September 26, 2023

Image Credits: Sheldon Cooper/SOPA Images/LightRocket / Getty Images

The Federal Trade Commission made its big move against online shopping giant Amazon on Tuesday, accusing the company of illegally stifling competition on its way to becoming a ubiquitous retail presence and one of the world's most valuable companies.

Attorneys general from 17 states joined the FTC in the lawsuit, alleging that Amazon leverages a "set of interlocking anticompetitive and unfair strategies" to maintain a monopoly. The states that signed onto the FTC's action are Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin.

"The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them," FTC Chair Lina M. Khan said. "Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition."

Amazon predictably pushed back against the FTC's allegations, which could amount to an existential threat to the company's market dominance.

"If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers and reduced options for small businesses — the opposite of what antitrust law is designed to do," Amazon General Counsel David Zapolsky said. "The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”

The FTC and its state partners allege that Amazon has violated antitrust law in two distinct areas: its vast online storefront for shoppers and its seller-side marketplace. Amazon's practice of punishing sellers that offer lower prices away from Amazon and its strategy of aggressively funneling sellers toward obtaining Prime status for their goods are among the anti-competitive tactics the FTC named in the lawsuit.

"Amazon is a monopolist that uses its power to hike prices on American shoppers and charge sky-high fees on hundreds of thousands of online sellers," Deputy Director of the FTC Bureau of Competition John Newman said. "Seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people."

The FTC accuses Amazon of 'monopolistic practices' in long-expected antitrust suit

It claims the retailer prevented vendors from selling products for less elsewhere.

Will Shanklin
·Contributing Reporter
Tue, September 26, 2023


The Federal Trade Commission (FTC) filed an antitrust lawsuit against Amazon today in Western Washington district court, with 17 states joining the federal agency. The case isn’t surprising (the FTC was reportedly nearly ready to file in late August), but its specifics weren’t yet known.

The FTC accuses the online retailer of monopolistic practices, including preventing merchants from offering lower prices on other platforms and forcing them to use Amazon’s logistics service if they wanted to be included in customers’ Prime shipping perks. Those anticompetitive practices allegedly led to higher prices and an inferior shopping experience.

The suit describes “Amazon's one-two punch of seller punishments and high seller fees” that forces vendors to “use their inflated Amazon prices as a price floor everywhere else.” The complaint reads, “Amazon's punitive regime distorts basic market signals: one of the ways sellers respond to Amazon's fee hikes is by increasing their own prices off Amazon.”

“Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition,” said FTC chair Lina Khan, according to The New York Times.



“Amazon is a monopolist,” the lawsuit reads. “It exploits its monopolies in ways that enrich Amazon but harm its customers: both the tens of millions of American households who regularly shop on Amazon's online superstore and the hundreds of thousands of businesses who rely on Amazon to reach them.”

The 17 states joining the FTC include New York, Connecticut, Pennsylvania, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, Oklahoma, Oregon, Rhode Island and Wisconsin.

The FTC has had its eye on Amazon for several years. This is the fourth action the agency has taken against the company this year. Amazon settled a previous lawsuit (for $30.8 million) filed in May over Alexa children’s privacy concerns and snooping with Ring cameras. In June, the FTC sued the retailer again, claiming the company tricked customers into signing up for Prime subscriptions and then made it hard to cancel them.

Amazon claimed that the FTC’s actions are out of line. “Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” said David Zapolsky, Amazon's Senior Vice President of Global Public Policy and General Counsel. “The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”

The media’s narrative about the suit will likely frame it as a long-awaited title bout between Khan and Amazon. The FTC chair gained prominence by publishing a 2017 Yale Law Journal paper arguing US antitrust laws fell short of adequately reining in the tech giant. That helped begin a national conversation about whether the nation’s anti-monopoly laws were prepared to handle modern Silicon Valley behemoths.

But more important than one-on-one championship fight framing, the showdown will serve as a test for Washington regulators and Amazon, as the federal agency tests its authority and the retailer faces its most consequential political fight to date.

FTC, 17 states file antitrust suit against Amazon

Clarissa Hawes

FreightWaves
Tue, September 26, 2023 


The Federal Trade Commission and 17 state attorneys general filed suit against Amazon.com on Tuesday, alleging the e-commerce giant used its monopoly power to “inflate prices, degrade quality and stifle innovation for consumers and businesses.”

The 172-page complaint, filed in the U.S. District Court for the Western District of Washington, alleges Amazon (NASDAQ: AMZN) engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging.”

The FTC lawsuit, which follows a four-year investigation into the Seattle-based company, states that it’s not the size of Amazon that violates the law, but the the company’s alleged “anticompetitive conduct” — which includes its “online superstore market that serves shoppers and the market for online marketplace services purchased by sellers.”

“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” FTC Chair Lina M. Khan said in a statement on Tuesday.

“The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them.”

In the suit, the FTC alleges Amazon has harmed its competition by requiring sellers who want their products to be Prime-eligible to use its logistics platform, Fulfillment by Amazon, which it claims makes it substantially more expensive for sellers on Amazon to also offer their products on other platforms.

Another issue outlined in the FTC suit alleges that Amazon engages in anti-discounting conduct, which “algorithmically punishes sellers” if Amazon discovers they are offering lower-priced goods elsewhere.

“Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible,” the FTC said.
Amazon responds to FTC suit

In a statement, Amazon denied the allegations outlined in the FTC’s lawsuit.

“Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition,” David Zapolsky, Amazon’s senior vice president of global public policy and general counsel, said in a statement. “The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store.”

In his statement, Zapolsky said: “If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers and reduced options for small businesses — the opposite of what antitrust law is designed to do. The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”

The company has about 500,000 independent businesses selling goods on its platform in the U.S., which have created 1.5 million jobs, Zapolsky said.

He said that since Amazon opened its business model nearly 20 years ago to include third-party sellers, more than 60% of the company’s sales are from independent sellers, consisting mostly of small and medium-size businesses.

“The FTC’s allegation that we somehow force sellers to use our optional services is simply not true,” Zapolsky said. “Sellers have choices and many succeed in our store using other logistics services or choosing not to advertise with us.”

The states included in the lawsuit are Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island and Wisconsin.

Click here to read more articles by Clarissa Hawes.


Amazon has deep bench of defense lawyers to fight US FTC lawsuit

Amazon faces FTC antitrust suit alleging anticompetitive practices


Tue, September 26, 2023 
By Andrew Goudsward and Mike Scarcella

WASHINGTON (Reuters) - The U.S. Federal Trade Commission’s monopoly lawsuit against Amazon.com filed on Tuesday poses perhaps the biggest legal test so far for the platoons of lawyers who have defended the technology giant for years against allegations of antitrust and consumer protection violations.

The long-awaited FTC case against Amazon, joined by 17 state attorneys general, accuses the company of abusing its dominance as an online retailer to thwart competitors and harm sellers and customers that rely on its platform. The company vowed to fight the lawsuit, saying its practices have spurred competition and innovation.

Kevin Hodges, a partner at law firm Williams & Connolly, was the first member of Amazon's defense team identified in a court document in the case. His partner Heidi Hubbard will lead the team, which also includes attorneys from law firm Covington & Burling, according to a person familiar with the hires.

Hubbard and Hodges, who is a former managing partner of the Washington-headquartered firm, are also representing Amazon in an ongoing antitrust lawsuit by California's attorney general accusing the company of forcing artificially high prices on consumers.

Williams & Connolly, known for its focus on litigation, in April successfully defeated a separate private lawsuit accusing the company of curbing competition for shipping and fulfillment services.

Hodges represented state attorneys general who joined the U.S. Justice Department's historic antitrust case against Microsoft in the 1990s and defended BP in lawsuits following the 2010 Gulf of Mexico oil spill, according to court records and his firm's website. He did not respond to a request for comment.

Williams & Connolly is also a lead defense firm in another major antitrust case targeting Big Tech. Partner John Schmidtlein heads a team comprised of several big law firms defending Alphabet's Google in an ongoing landmark trial over the company’s alleged monopoly power in online search.

An Amazon spokesperson did not immediately respond to questions about its legal team. The company is likely to rely on multiple law firms to defend the FTC case.

Amazon General Counsel David Zapolsky, a 24-year veteran of the company's legal department, can turn to a stable of top outside law firms that already represent it.

Covington & Burling, another major Washington firm, worked with Williams & Connolly in 2021 in an unsuccessful attempt to force FTC Chair Lina Khan, a vocal critic of Amazon, to recuse from matters involving the company. Thomas Barnett, co-chair of the firm’s antitrust practice and a former senior Justice Department official, was involved in the effort.

Covington is also representing Amazon in another pending lawsuit brought by the FTC accusing the company of enrolling customers into its paid Amazon Prime service without their consent and making it difficult for them to cancel. The company has denied the allegations.

Covington advised Amazon in two consumer privacy settlements with the FTC in May related to the company’s Alexa voice assistant and Ring home security service.

A Covington spokesperson did not respond to a request for comment on whether the firm is defending Amazon in the FTC antitrust case.

Amazon has also turned to U.S. law firm Paul, Weiss, Rifkind, Wharton & Garrison to navigate government scrutiny. Paul Weiss secured the dismissal of an antitrust lawsuit brought by Washington, D.C.’s attorney general. An appeal remains pending.

The firm joined Covington in negotiating a $25 million Alexa child privacy settlement with the FTC.

(Reporting by Andrew Goudsward and Mike Scarcella in Washington; Editing by David Bario, Matthew Lewis and Marguerita Choy)

Amazon chews through the average worker in eight months. They need a union

Amazon has earned the dubious distinction of replacing Walmart as the nation’s fiercest anti-union employer

‘Amazon seems averse to letting its employees utter a pro-union peep.’

 Photograph: Daniel Leal/AFP/Getty Images
Fri 4 Feb 2022 11.28 GMT

It doesn’t take much imagination to realize that Amazon warehouse workers would benefit from having a union. The average Amazon warehouse worker leaves within just eight months – that’s an unmistakable sign that Amazon’s jobs are unpleasant, to put it kindly, and that many Amazon workers quickly realize they hate working there because of the stress, breakneck pace, constant monitoring and minimal rest breaks. Indeed, experts on the future of work often voice concern that Amazon’s vaunted algorithms and technologies treat Amazon’s warehouse workers like mindless, unfeeling robots – having them do the same thing hour after hour after hour.

And then there are the endless tales from Amazon warehouse workers that the company is so stingy about break time that they often don’t have enough time to go back and forth to the bathroom without getting demerits for exceeding their allotted daily break time. It’s hard to believe that here in the 21st century, one of the nation’s biggest, most respected companies makes it so hard for many of its workers to pee.

Share the profits! Why US businesses must return to rewarding workers properly

Robert Reich

In this way, working at Amazon resembles working at a poultry processing plant, where workers often wear adult diapers to work because their bosses frequently tell them they can’t take a break right now from cutting all those drumsticks and wings to go to the bathroom.

Amazon workers continue to endure all this pain and strain even though Jeff Bezos, Amazon’s founder and the world’s richest human being, has said he is committed to making Amazon “Earth’s Best Employer and Earth’s Safest Place to Work”. Evidently Bezos fails to realize that any company whose workers leave after eight months on average is light years from being Earth’s Best Employer. As for being Earth’s Safest Place to Work, Bezos shouldn’t insult workers’ or the public’s intelligence by making such a claim, considering the rate of serious injuries at Amazon’s warehouses in 2020 was nearly twice that at other warehouses across the US.

If Amazon were to be the Earth’s Best Employer, then its employees would probably be eager to work there until age 65 or 70, rather than say good riddance after a few months. By the way, the eight-month average that Amazon workers stay is a piddling one-sixth the average job tenure for America’s 155 million workers.

However much Bezos detests unions, there’s one thing Bezos can’t honestly deny –unions would be a surefire way for Amazon to become a better employer. Indeed, if Bezos is serious about making Amazon Earth’s Best and Safest Employer, not only should Amazon stop fighting so hard to block unionization, as it has in Alabama, Staten Island and elsewhere, but it should roll out the red carpet for union organizers. If Amazon workers had a real voice at work, a real voice in shaping and improving Amazon’s working conditions – perhaps in de-stressing and slowing down Amazon’s the-algorithm-uber-alles work routines – Amazon might become a far better place to work, and perhaps take a few steps closer to Bezos’s much-ballyhooed goal of becoming Earth’s Best Employer. (I would settle for Amazon becoming Earth’s Best Warehouse Employer – Best Employer is a laudable goal, but a bridge way too far for Amazon.)

If Amazon workers had an effective union that improves pay and conditions, they might stay for eight years on average instead of eight months. In that way, a union might go far to cure Amazon’s biggest headache: it chews through so many employees so fast that it is always desperate to hire new workers – more than 500,000 new hires some years (before quickly chewing through those new ones and spitting them out). Deep down, Amazon executives must be terrified that at some point, so many millions of Americans will have gone through and been chewed up by the Amazon push-it-to-the-max, stress machine, that Amazon simply won’t be able to find enough workers to keep all its warehouses operating – unless, perhaps, it raises its starting pay to $25 or $30 an hour.

Some labor experts see an anti-union method to Amazon’s stress-o-matic madness: that it intentionally wants its workers to stay only a short time because its workers will then conclude that they won’t be there long enough to make it worthwhile to fight for a union. Besides, with such enormous employee turnover and with so many workers staying for such a short time, that makes it immensely hard for union organizers and union-supporting workers to explain to all of a warehouse’s workers how they would benefit from having a union.

Making it even harder to unionize Amazon is the company’s apparent willingness to violate labor laws

To say that unionizing Amazon is an uphill battle is an understatement. It’s one thing to unionize a Starbucks cafe with 30 baristas – and that’s quite hard, considering how aggressively anti-union Starbucks is. But it’s a whole different level of difficulty to unionize a warehouse with 5,000, especially when Amazon pumps out anti-union propaganda to its workers 24/7, while it prohibits union organizers from setting foot on company property.

Making it even harder to unionize Amazon is the company’s apparent willingness to violate labor laws. Fed up with Amazon’s numerous alleged labor law violations at its warehouse in Bessemer, Alabama, the National Labor Relations Board pressured Amazon into reaching a settlement in December in which the company promised to comply with federal laws that protect workers’ right to unionize.

But just a month after that settlement, the NLRB again accused Amazon of serious labor law violations, this time at its Staten Island warehouse. In a complaint issued on 27 January, the NLRB said that one of Amazon top anti-union consultants, Bradley Moss, had called union organizers “thugs”, a word that some see as racially insensitive considering that most of the organizers in Staten Island are Black. The NLRB also said Moss had told workers it would be “futile” to vote for a union because a union would “never happen here”. The NLRB said Amazon committed other illegalities; confiscating pro-union literature, preventing workers from distributing flyers in break rooms and telling workers they couldn’t distribute union literature without Amazon’s permission. Amazon denies the NLRB’s allegations. While Amazon pushes its anti-union message to the max – remember the anti-union posters it put in its toilet stalls – Amazon seems averse to letting its employees utter a pro-union peep.

Amazon has earned the dubious distinction of replacing Walmart as the nation’s fiercest anti-union employer. This week, more than 6,000 workers at Amazon’s warehouse in Bessemer are getting a second chance to vote on whether to have a union; the NLRB ordered a new election after asserting that Amazon’s illegalities prevented a fair, first union vote there.

The bottom line here: not only would unionizing Amazon make it a better place to work – something Bezos says he badly wants – but a successful unionization vote at Amazon would be a huge, hopeful signal to embattled workers across the US that even at a fiercely anti-union corporation like Amazon, workers can indeed choose to have a union as a surefire way to improve their jobs and their lives.


Steven Greenhouse is a journalist and author, focusing on labor and the workplace. He is a senior fellow at the Century Foundation and the author of Beaten Down, Worked Up: The Past, Present, and Future of American Labor

Jeff Bezos has become too removed from employees to see what's really going on, say the fired Amazon tech workers who inspired a VP to publicly quit

FIRST IT WAS WAREHOUSE WORKERS, NOW ITS ENGINEERS, 

THORESTEIN VEBLEN THOU ART AVENGED 

Julie Bort BUSINESS INSIDER 

Axel Springer/Blue Origin/ Business Insider

Maren Costa and Emily Cunningham, the two fired Amazon tech workers at the center of a PR firestorm, spoke to Business Insider about their experiences at the ecommerce giant. 

Costa and Cunningham were leaders of an internal group of Amazon employees protesting the company's treatment of its warehouse workers. The group also called for Amazon to take more urgent action on climate change.

The two say they were both fired on the same day and at the same time for violating Amazon's external communications and non-solicitation policies. Soon after they were fired, Costa and Cunningham organized a protest of Amazon. 

The firing of Costa and Cunningham, and the protests that followed, caused Amazon VP Tim Bray, a highly-respected coder, to resign and publicly condemn the company.

The entire episode has led to an upswing in Amazon engineers speaking out against their employer's tactics, even as state attorneys general start looking for answers. 

The fired workers, one of whom has been with Amazon for 15 years and has internally worked on many changes, say the whole situation is caused by one thing: Amazon founder and CEO Jeff Bezos has become too insulated from his own company.

At 3 p.m. Pacific Time on April 10, Maren Costa — a user experience designer and 15-year veteran of Amazon with 9 patents pending — joined a video call with her boss's boss. The invite, sent to her last minute, was odd: It didn't have a subject line. 

It wasn't unusual to speak to him on a video call with the company still on work-from-home orders so she didn't think much about it until she logged on and saw an HR person had joined the call.

The HR person said: "You have been warned in the past for breaking the external communication policy and you continue to break policies including the no solicitation policy, and by doing so you have decided to end your employment with Amazon, effective immediately," Costa told Business Insider, remembering the conversation.

She was instructed to box up any company property, send it back to Amazon and the call was ended.

"I worked at Amazon for 15 years and was fired in one phone call and I didn't even get to say a word," Costa says.

Amazon tech employee Emily Cunningham says she was also fired from Amazon, on the same day and time, for the same reasons.

Maren Costa YouTube/Amazon Employees for Climate Justice"I got a meeting invite at 2:45 for a 3 o'clock call with my director," Cunningham said. She couldn't make the meeting and replied asking for a later date — only to discover that she had been cut off from Amazon's network at 3 p.m. At around 4, she got a call from an HR person that lasted about 60 seconds, she says, where she was informed that she was fired for violating corporate policies.

The external communication policy forbids Amazon employees from speaking publicly without getting authorization from the company beforehand. It was updated in January, 2019, after an employee activist group was formed to push Amazon towards adopting a more aggressive climate change policy.

Both Cunningham and Costa were leaders of that group, known as Amazon Employees for Climate Justice (AECJ).

The group was supported by hundreds of other Amazon tech workers, some of whom publicly signed open letters in support. They staged events, got media coverage, and successfully influenced Amazon to embrace a set of new climate-related policies — although the company didn't bend to all their demands. After AECJ began its campaign, Amazon CEO Jeff Bezos also announced a plan to spend $10 billion of his own money funding climate science work.

AECJ's activism expanded into supporting the company's army of warehouse workers when story after story reported on a grueling work environment. Then COVID-19 struck, and AECJ pushed Amazon to do more to protect warehouse workers as some of those workers complained the company was not doing enough to protect them. US warehouses workers now account for at least 600 cases and three deaths, as Business Insider previously reported.

So what prompted Amazon to fire Costa and Cunningham when it did? The pair tell Business Insider that they believe it was sparked by something that happened earlier that same day: Another Amazon engineer, a member of AECJ who had given the company his two-week notice, sent out a calendar invitation to thousands of his coworkers — inviting them to an event to listen to warehouse workers speak about their experiences amid the pandemic.

Amazon deleted the event from employees' calendars. Not long after, Costa and Cunningham got their mysterious meeting invitations. The company also fired two warehouse workers who had protested conditions, over what it said were unrelated violations of corporate policies.

The firings has led to an uproar this week, even as the company draws more attention from governmental authorities. On Wednesday, a group of lawmakers sent a letter to Amazon CEO Jeff Bezos asking him to explain the firings of Costa, Cunningham and the warehouse workers.

Costa and Cunningham tell Business Insider that they believe the whole situation is really caused by one thing: Amazon founder and CEO Jeff Bezos has become too insulated from his own company.

Amazon declined to comment for this story.
Shocked to the core

Cunningham was saddened, but not surprised, at being fired. She had formed AECJ to "make Amazon a better company," she said — and had been prepared to lose her job over it. If her children ever asked her what she had done to help stop the climate crisis, she wanted to have an answer.

But Costa, who had been with Amazon for a decade and a half, says that she was shocked to the core. When she joined AECJ, she thought that Amazon would listen and work with the group. She remembers telling colleagues: "We can totally do this. Amazon has always been receptive. If you have good ideas and you have the data, people will listen, resources will come," she recalled.

Costa says that in her 15 years there, she's successfully used Amazon's internal mechanisms to advocate for change "many times in the past."

Emily Cunningham YouTube/Amazon Employees for Climate Justice

The group wanted Amazon to commit to reducing its carbon footprint, and fast enough to keep pace with the recommendations of climate scientists.

AECJ also wanted Amazon's cloud arm, Amazon Web Services, to stop helping the major oil companies in the extraction process. The group hoped Amazon would drop Big Oil, in the same way that Google employees pressured Google Cloud into forgoing weapons-related work for the Pentagon.

Members of the group scheduled meetings with Amazon higher-ups like the director of sustainability, "but every internal avenue we tried was met with silence and dead ends," Costa said.

So AECJ fired up a Twitter account, wrote public letters, scheduled public protests, and shared their opinions on the matter with the press.

And they won some significant victories. Amazon promised to become net zero carbon across its businesses by 2040, — which, the company points out, is a decade ahead of the Paris Agreement. But 2040 was a decade later than the deadline that AECJ was pushing for.

By comparison, in January, Amazon's Seattle-based rival Microsoft promised to be carbon negative by 2030, more in line with AECJ's hope for Amazon.
A VP quits in solidarity

Once fired, Costa and Cunningham turned their attention into throwing a full-blown, all-day protest event on Friday, April 24, a couple of weeks after news had circulated that they had been terminated. They lined up 30 speakers including climate scientists and several Amazon warehouse workers.

One particularly moving story came from a New York-based warehouse worker who described how Amazon management was slow to tell some employees about new coronavirus cases in their facility — but got much better about it in the wake of a walkout protest in March.

Hundreds of people joined the live protest event, and thousands more watched it online. The audience included one Amazon's most famous engineers, Tim Bray, a vice president with the rare title of distinguished engineer. Bray is revered in the coding world as the inventor of XML, a special language for web pages that became wildly popular with companies sharing documents over the web.

On Monday he made international headlines when he publicly quit, citing the firings of Costa, Cunningham and the warehouse workers after watching the protest event as his reason for leaving.

"Management could have objected to the event, or demanded that outsiders be excluded, or that leadership be represented, or any number of other things; there was plenty of time. Instead, they just fired the activists," he said, explaining that he, too, tried discussions through regular channels before he quit.

"Firing whistleblowers...is evidence of a vein of toxicity running through the company culture," he wrote, saying he was sad to be walking away from a job that he loved. He said that quitting cost him about $1 million.

And the reverberations continued. Brad Porter, a VP and engineer at Amazon, responded to Bray's criticisms, calling them "deeply offensive to the core." Porter argued that Amazon "has responded more nimbly to this crisis than any other company in the world." Amazon says that it's spending billions to protect its workers with everything from buying millions of masks, doing temperature scans, reducing workloads to maintain social distancing, to developing its own COVID tests.

But there's simmering unrest among Amazon's engineering ranks. Anton Okmyanskiy, a principal engineer at Amazon Web Services, wrote on LinkedIn that he was inspired by the resignation of the well-respected Bray, and suggested that "Amazon stay ahead of anger-driven regulatory enforcement by becoming a leader on social justice issues. It is time!"

And programmers this week were openly calling on Amazon engineers to quit on a thread on Hacker News, a popular online hangout for tech workers. This came after someone posted that some Amazon engineers were so upset they want to help the warehouse workers organize, but were afraid of being fired if they did.
Where's Jeff?

In Costa and Cunningham's view, this is all a sign that CEO Jeff Bezos, now the wealthiest man in the world who owns multiple mansions and is building his own space program via his company Blue Origin, has become out of touch with ordinary people, especially his own employees.

Costa believes that Amazon as a company has drastically changed from her early days. CEO Jeff Bezos is famously fascinated with the concept of "Day 1," the notion that even a company as big as Amazon needs to stay as small and scrappy as a brand-new startup on its first day of business. "Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death," Bezos is widely quoted as saying.

In Costa's view, this whole episode is a sign that "Amazon has become a Day 2 company," and that "they've lost that innovative, excited, brave and bold, let's make history attitude."

Costa remembers the early days when the company would send tech workers "to stand shoulder-to-shoulder with warehouse workers to get packages out to customers on time." She says that it was an exciting time, when the whole company would pull together for a common goal.

Indeed, Amazon used to require every Level 7 tech employee and above (which is to say, its more senior staff) to spend two days working in the warehouses as part of their training, according to one long-time Amazon engineer.

But as Amazon has grown into a massive conglomerate — a major retailer, private-label manufacturer, cloud computing provider, and Hollywood producer — Bezos has seen his fortune and fame grow, and is now the richest man in the world.

"Jeff has become so removed from normal human beings," Costa says. His "blind spots" are the lives of his employees and customers, she believes. She points to his recent visit to an Amazon warehouse, where the arrival of the mask-wearing CEO was treated as a special PR event, rather than a normal part of his daily duties as chief executive.

Meanwhile, AECJ's activism continues to have ripple effects pushing Amazon towards even more scrutiny.

For instance, New York Attorney General, Letitia James said last month that the firing of an activist warehouse worker at a Staten Island facility could have violated labor laws, and she has called on watchdogs to open an investigation.

Amid the ongoing COVID-19 crisis, attorneys general from 14 states are questioning Amazon's sick leave policies for warehouse workers. And in France, Amazon shut down its distribution centers after courts ruled it was not allowed to continue to have warehouse workers working to sell non-essential goods.

Are you an Amazon insider with insight to share? Contact Julie Bort via email at jbort@businessinsider.com or on encrypted chat app Signal at (970) 430-6112 (no PR inquiries, please). Open DMs on Twitter @Julie188. 

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