Criticism of Amazon

Amazon.com has drawn criticism from multiple sources, where the ethics of certain business practices and policies have been drawn into question. Amazon has also faced numerous allegations of anti-competitive or monopolistic behavior.

Anti-competitive practices

One-click patent

The company has been controversial for its alleged use of patents as a competitive hindrance. The "1-Click patent"[1] is perhaps the best-known example of this. Amazon's use of the one-click patent against competitor Barnes & Noble's website led the Free Software Foundation to announce a boycott of Amazon in December 1999.[2] The boycott was discontinued in September 2002.[3] On February 22, 2000, the company was granted a patent covering an Internet-based customer referral system, or what is commonly called an "affiliate program". Industry leaders Tim O'Reilly and Charlie Jackson spoke out against the patent,[4] and O'Reilly published an open letter[5] to Jeff Bezos, the CEO of Amazon, protesting the 1-click patent and the affiliate program patent, and petitioning him to "avoid any attempts to limit the further development of Internet commerce". O'Reilly collected 10,000 signatures[6] with this petition. Bezos responded with his own open letter.[7] The protest ended with O'Reilly and Bezos visiting Washington, D.C. to lobby for patent reform. On February 25, 2003, the company was granted a patent titled "Method and system for conducting a discussion relating to an item on Internet discussion boards".[8] On May 12, 2006, the USPTO ordered a re-examination of the "One-Click" patent, based on a request filed by actor Peter Calveley, who cited the prior art of an earlier e-commerce patent and the Digicash electronic cash system.[9]

Canadian site

Amazon has a Canadian site in both English and French, but until a ruling in March 2010, was prevented from operating any headquarters, servers, fulfillment centers or call centers in Canada by that country's legal restrictions on foreign-owned booksellers.[10] Instead, Amazon's Canadian site originates in the United States, and Amazon has an agreement with Canada Post to handle distribution within Canada and for the use of the Crown corporation's Mississauga, Ontario shipping facility.[11] The launch of Amazon.ca generated controversy in Canada. In 2002, the Canadian Booksellers Association and Indigo Books and Music sought a court ruling that Amazon's partnership with Canada Post represented an attempt to circumvent Canadian law,[12] but the litigation was dropped in 2004.[13]

In January 2017, doormat products with the Indian flag on them went on sale on the Amazon Canada website. The use of the Indian flag in this way is considered offensive to the Indian community and in violation of the Flag code of India.[14] The Minister of External Affairs of India Sushma Swaraj threatened a visa embargo for Amazon officials if Amazon didn't tender an unconditional apology and withdraw all such products.[15][16]

In January 2017, Amazon.ca was required by the Competition Bureau to pay a $1M penalty, plus $100,000 in costs, overpricing practices for failing to provide "truth in advertising" according to Josephine Palumbo, the deputy commissioner for deceptive marketing practices. This fine was levied because some products on Amazon.ca were shown with an artificially high "list price", making the lower selling price appear to be very attractive, producing an unfair competitive edge over other retailers. This is a frequent practice among some retailers and the fine was intended to "send a clear message [to the industry] that unsubstantiated savings claims will not be tolerated".[17] The Bureau also indicated that the company has made changes to ensure that regular prices are more accurately listed.[18]

BookSurge

In March 2008, sales representatives of Amazon's BookSurge division started contacting publishers of print on demand titles to inform them that for Amazon to continue selling their POD-produced books, they were required to sign agreements with Amazon's own BookSurge POD company. Publishers were told that eventually, the only POD titles that Amazon would be selling would be those printed by their own company, BookSurge. Some publishers felt that this ultimatum amounted to monopoly abuse, and questioned the ethics of the move and its legality under anti-trust law.[19]

Direct selling

In 2008, Amazon UK came under criticism for attempting to prevent publishers from direct selling at discount from their own websites. Amazon's argument was that they should be able to pay the publishers based on the lower prices offered on their websites, rather than on the full recommended retail price (RRP).[20][21]

Also in 2008, Amazon UK drew criticism in the British publishing community following their withdrawal from sale of key titles published by Hachette Livre UK. The withdrawal was possibly intended to put pressure on Hachette to provide levels of discount described by the trade as unreasonable. Curtis Brown's managing director Jonathan Lloyd opined that "publishers, authors, and agents are 100% behind [Hachette]. Someone has to draw a line in the sand. Publishers have given 1% a year away to retailers, so where does it stop? Using authors as a financial football is disgraceful."[22][23]

In August 2013, Amazon agreed to end its price parity policy for marketplace sellers in the European Union, in response to investigations by the UK Office of Fair Trade and Germany's Federal Cartel Office.[24] It is not yet clear if this ruling applies to direct selling by publishers.

Price control

Following the announcement of the Apple iPad on January 27, 2010, Macmillan Publishers entered into a pricing dispute with Amazon.com regarding electronic publications. Macmillan asked Amazon to accept a new pricing scheme it had worked out with Apple, raising the price of e-books from $9.99 to $15.[25] Amazon responded by pulling all Macmillan books, both electronic and physical, from their website (although affiliates selling the books were still listed). On January 31, 2010, Amazon "capitulated" to Macmillan's pricing request.[26]

In 2014, Amazon and Hachette became involved in a dispute over agency pricing.[27] Agency pricing is when the agent (such as Hachette) determines the price of a book; normally, however, Amazon dictates the discount level of a book. High-profile authors became involved; hundreds of writers, including Stephen King and John Grisham, signed a petition saying "We encourage Amazon in the strongest possible terms to stop harming the livelihood of the authors on whom it has built its business. None of us, neither readers nor authors, benefit when books are taken hostage."[27] Author Ursula K. Le Guin commented on Amazon's practice of making Hachette books harder to buy on its site, stating "We're talking about censorship: deliberately making a book hard or impossible to get, 'disappearing' an author." Although her statement was met with some outrage and disbelief, Amazon's actions such as eliminating discounts, delaying the delivery time, and refusing pre-publication orders did make physical Hachette books harder to get. Plummeting sales of Hachette books on Amazon indicated that its policies likely succeeded in deterring customers.[28]

On August 11, 2014, Amazon removed the option to preorder Captain America: The Winter Soldier in an effort to gain control over the online pricing of Disney films. Amazon has previously used similar tactics with Warner Bros. and Hachette Book Group. The conflict was resolved in late 2014 with neither having to concede anything. Then in February 2017, Amazon again began to block preorders of Disney films, just before Moana and Rogue One were due to be released to the home market.[29]

The law firm Hagens Berman filed a lawsuit in district court in New York in January 2021, alleging that Amazon colluded with leading publishers to keep ebook prices artificially high. The state of Connecticut also announced it was investigating Amazon for potential anti-competitive behaviour in its sale of ebooks.[30]

Removal of competitors' products

On October 1, 2015, Amazon announced that Apple TV and Google Chromecast products were banned from sale on Amazon.com by all merchants, with no new listings allowed effective immediately, and all existing listings removed effective October 29, 2015. Amazon argued that this was to prevent "customer confusion", as these devices do not support the Prime Video ecosystem. This move was criticized, as commentators believed that it was meant primarily to suppress the sale of products deemed as competition to Amazon Fire TV products, given that Amazon itself had deliberately refused to offer software for its own streaming services on these devices, and the action contradicted the implication that Amazon.com was a general online retailer.[31][32][33]

In May 2017, it was reported that Apple and Amazon were nearing an agreement to offer Prime Video on Apple TV, and allow the product to return to the retailer.[34] Prime Video launched on Apple TV December 6, 2017,[35] with Amazon beginning to sell the Apple TV product again shortly thereafter.

Amazon has since suppressed other Google products, including Google Home (which competes with Amazon Echo), Pixel phones, and recent products of Google subsidiary Nest Labs (despite the Nest Learning Thermostat having integration support for Amazon's voice assistant platform Alexa). In retaliation, Google announced on December 6, 2017 that it would block YouTube from the Amazon Echo Show and Amazon Fire TV products.[36][37][38][39] In December 2017, Amazon stated that it intended to start offering Chromecast again (which it would do a year later).[40] Meanwhile, Nest stated that it would no longer offer any of its future stock to Amazon until it commits to offering its entire product line.[41]

In April 2019, Amazon announced that it would add Chromecast support to the Prime Video mobile app and release its Android TV app more widely, while Google announced that it would, in return, restore access to YouTube on Fire TV (but not Echo Show).[42] Prime Video for Chromecast and YouTube for Fire TV were both released July 9, 2019.[43]

In December 2019, following the acquisition of Honey — a browser extension that automatically applies online coupons on online stores — by PayPal, the Amazon website began to display warnings advising users to uninstall the software, claiming it was a security risk.[44][45]

Apple partnership

In November 2018, Amazon reached an agreement with Apple Inc. to sell selected products through the service, via the company, selected Apple Authorized Resellers, and vendors who meet specific criteria. As a result of this partnership, only Apple Authorized Resellers and vendors who purchase $2.5 million in refurbished stock from Apple every 90 days (via the Amazon Renewed program) may sell Apple products on the service.[46][47][48] The partnership has faced criticism from independent resellers, who believe that this deal has restricted their ability to sell refurbished Apple products on Amazon at a low-cost. In August 2019, The Verge reported that Amazon was being investigated by the FTC over the deal.[49]

Marketplace participant and owner

Amazon has raised concerns by being both the owner of a dominant marketplace and a retail seller in that marketplace. Amazon uses the data it gets from the entire marketplace (data not available to other retailers in the marketplace) to determine what products would be advantageous to produce in-house, at what price point.[50] The company markets products under AmazonBasics, Lark & Ro,[51] and various other private-label brands. U.S. presidential candidate Elizabeth Warren has proposed forcing Amazon to sell AmazonBasics and Whole Foods Market, where Amazon competes against other marketplace participants as a brick-and-mortar retailer.[52]

EU antitrust charges

The European Commission commenced an investigation in June 2015 regarding clauses in Amazon's e-book distribution agreements which potentially breached EU antitrust rules by making it harder for other e-book platforms to compete. This investigation was concluded in May 2017 when the Commission adopted a decision which rendered binding Amazon's commitments not to use or enforce these clauses.[53]

In July 2019 and in November 2020, the European Commission opened two in-depth investigations into Amazon's use of marketplace seller data as well as possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services. It charged that Amazon systematically relies on nonpublic data it gathers from third party sellers to unfairly compete against them, to the benefit of its own retail business, thus violating competition law in the European Economic Area.[54][55]

Treatment of workers

Amazon has faced various critiques over the quality of its working environments and treatment of its workforce. A group known as The FACE (Former And Current Employees) of Amazon has regularly used social media to disseminate criticism of the company and allegations regarding negative work conditions.[56][57]

Opposition to trade unions

A sticker expressing an anti-Amazon message is pictured on the back of a street sign in Seattle.

Amazon has opposed efforts by trade unions to organize in both the United States and the United Kingdom. In 2001, 850 employees in Seattle were laid off by Amazon.com after a unionization drive. The Washington Alliance of Technological Workers (WashTech) accused the company of violating union laws and claimed Amazon managers subjected them to intimidation and heavy propaganda. Amazon denied any link between the unionization effort and layoffs.[58] Also in 2001, Amazon.co.uk hired a US management consultancy organization, The Burke Group, to assist in defeating a campaign by the Graphical, Paper and Media Union (GPMU, now part of Unite the Union) to achieve recognition in the Milton Keynes distribution depot. It was alleged that the company victimized or sacked four union members during the 2001 recognition drive and held a series of captive meetings with employees.[59]

An Amazon training video that was leaked in 2018 stated "We are not anti-union, but we are not neutral either. We do not believe unions are in the best interest of our customers or shareholders or most importantly, our associates."[60] Two years later, it was found that Whole Foods was using a heat map to track which of its 510 stores had the highest levels of pro-union sentiment. Factors including racial diversity, proximity to other unions, poverty levels in the surrounding community and calls to the National Labor Relations Board were named as contributors to "unionization risk".[61] Data collected in the heat map suggest that stores with low racial and ethnic diversity, especially those located in poor communities, are more likely to unionize. Amazon also had a job listing for an Intelligence Analyst, whose role it would be to identify and tackle threats to Amazon, which included unions and organised labour.[62][63]

On 4 December 2020, Buzzfeed News reported that The National Labor Relations Board (NLRB) accused Amazon for illegally firing a worker who urged for better working conditions during the pandemic. According to Buzzfeed News the National Labor Relations Board filed a complaint against Amazon for firing former warehouse worker Courtney Bowde.[64]

Warehouse conditions in the US

In September 2011, Allentown, Pennsylvania's Morning Call interviewed 20 past and present employees at Amazon's Breinigsville warehouse, all but one of whom criticized the company's warehouse conditions and employment practice. Specific investigatory concerns were: heat so extreme it required the regular posting of ambulances to take away workers who passed out,[65] strenuous workloads in that heat, and first-person reports of summary terminations for health conditions such as breast cancer.[65] The Morning Call also published, verbatim, Amazon.com's direct response to a query by OSHA,[66] where amazon.com detailed its response when heat conditions reach as high as 114 °F (46 °C), including water and ice treatment, electrolyte drinks, nutrition advice, and extended breaks in air-conditioned rooms.[66] Five days after the Morning Call article was published, Amazon stated that it had spent $2.4 million "urgently installing" air conditioning at four warehouses including the Breinigsville facility.[67] However, the original investigator states that when he checked back with current employees for his September 23 follow-up story, "they told him nothing had changed since his original story ran."[68]

In June 2012, Amazon began the installation of a $52 million investment in cooling its warehouses around the country, a major cost for the company equivalent to 8.2 percent of Amazon's 2011 total earnings.[69] Experts speculated Amazon made such a massive investment either to dampen negative publicity over worker conditions and/or to better protect goods in the warehouse such as food and electronics equipment.[69]

"Amazon ships a lot of electronics and food now. It's not good to have that stuff in extreme temperatures," said Sucharita Mulpuru, an analyst with Forrester Research. "I would like to think there was an element of humanity to the decision but there's nothing in Amazon's history or in Jeff Bezos' public persona that would lead me to think that was the driver of the decision. … Rarely has Amazon made any business decisions that didn't affect the bottom line."[69]

In December 2014, the Supreme Court of the United States ruled unanimously against temporary staffing workers for Amazon warehouses in Nevada who were seeking compensation for time spent waiting to go through security screening checkpoints.[70]

Warehouse conditions in the UK

Complaints about Amazon's Marston Gate UK facility date back to 2001.[71] prompting a threatened protest from Billy Bragg. These claims resurfaced in 2008 with fresh reports of "sweatshop conditions".[72][70]

A Channel 4 documentary broadcast on the 1st August 2013 employed secret cameras within Amazon UK's Rugeley warehouse documenting worker abuses, calling the working practices 'horrendous and exhausting'.[73]

In November 2016 a BBC undercover report at Amazon's delivery depot in Avonmouth found that in some instances delivery drivers had no choice but to break the speed limit and use their van as a toilet to save time. It also exposed that after deductions (such as van hire and insurance) drivers could be paid as little as £2.59 per hour, less than half the UK minimum wage.[74]

In December 2016 Willie Rennie, the Liberal Democrat leader in Scotland, said that Amazon should be ashamed of both its working conditions and pay in Dunfermline after photographs were released showing workers camped outside in the winter to save the cost of commuting.[75]

In December 2017, it was reported that Amazon drivers in the U.K. are making less than the national minimum wage because they have to pay for van hire and insurance and did not have enough time to deliver the parcels that were ordered forcing them to urinate in plastic bottles in their vans.[76]

Working conditions for delivery drivers

A September 11, 2018 article exposed poor working conditions for Amazon's delivery drivers, describing a variety of alleged abuses, including missing wages, lack of overtime pay, favoritism, intimidation, and time constraints that forced them to drive at dangerous speeds and skip meals and bathroom breaks.[77] Amazon uses Netradyne artificial intelligence cameras in some partner vans to monitor safety incidents and driver behaviour, drawing criticism from some drivers.[78]

In June 2020, subcontracted delivery drivers based in Canada launched a class action lawsuit against Amazon Canada, claiming that $200 million in unpaid wages were owed to them because Amazon retained "effective control" over their work and should therefore legally be considered their employer.[79]

2018 Workers strike

Spanish unions have called on 1,000 Amazon workers to strike starting on July 10 and expected to last through Amazon Prime Day, with calls for the strike to be seen all across the world, and for customers to follow suit.[80] The strike based in Spain will be timed around Prime Day, with a representative of the Comisiones Obreras (CCOO) union said complaints were based on wage cuts, working conditions, and restrictions on time off.[81] However, other European countries have other raised grievances, with Poland, Germany, Italy, Spain, England, and France all being represented and shown below.[82]

• Poland workers claim an anti-strike law has made it impossible to negotiate a better salary.
• German workers have been fighting for over two years for a collective bargaining agreement.
• Italian workers have highlighted claims that Amazon routinely hires contract workers who aren't required to have benefits.
• Spanish Amazon leaders have unilaterally imposed working conditions when previous collective bargaining agreements had expired.
• English and French Amazon leaders have imposed demanding measures on time and efficiency leading to workers expected to process 300 items per hour and pee in bottles, with penalties being given for sick days and pregnancies.

Stop BEZOS Act

On September 5, 2018, Senator Bernie Sanders (I-VT) and Representative Ro Khanna (D-CA-17) introduced the Stop Bad Employers by Zeroing Out Subsidies (Stop BEZOS) Act aimed at Amazon and other alleged beneficiaries of corporate welfare such as Walmart, McDonald's, and Uber.[83] This followed several media appearances in which Sanders underscored the need for legislation to ensure that Amazon workers received a living wage.[84][85] These reports cited a finding by New Food Economy that one third of fulfilment center workers in Arizona were on the Supplemental Nutrition Assistance Program (SNAP).[86] Although Amazon initially released a statement which called statistics such as this "inaccurate and misleading", an October 2 announcement affirmed that its minimum wage for all employees would be raised to $15 per hour.[87]

Protest over coronavirus policies

During the COVID-19 pandemic, Amazon warehouses in the United States raised their hourly wages by $2 and announced that employees testing positive would be entitled to 14 days of paid leave. After a company statement that two employees at the Staten Island warehouse had been infected, workers there claimed the actual number was 10. On March 30, 2020, between 15 and 60 people attended a walkout to demand that Amazon temporarily close the warehouse in order to disinfect it.[88] The main organizer, Chris Smalls, was subsequently fired, allegedly for violating social distancing guidelines.

Smalls countered that the incident cited, which brought him near an infected employee for 5 minutes, occurred on March 11 meaning that his 14-day quarantine would have already ended if it had been ordered at the proper time. He also stated that the purpose of his conversation was to urge his fellow employee to stay home even when the results of her test were still pending making the company's paid leave option unavailable.[89] New York City Mayor Bill de Blasio ordered an investigation and the state's Attorney General Letita James called the firing "disgraceful".[89] Representative Jerry Nadler welcomed the investigation.[60] Democratic senators from New York, New Jersey, Connecticut, and Ohio sent a letter to Amazon expressing their concerns.[90]

According to leaked emails, Amazon executives, including Jeff Bezos, held a meeting to discuss the implications for the company's image. One email from the general counsel described Smalls as "not smart or articulate".[91]

Similar protests continued into April with one of them taking place at a Minnesota warehouse which held a strike in 2019. This led to the firing of one organizer, Bashir Mohamed, with social distancing as the nominal reason. Supporters of Mohamed countered that the guidelines were set up to be difficult to follow and applied selectively.[92] On April 10, two user interface designers, Emily Cunningham and Maren Costa, were fired after they tweeted support for striking Amazon workers and offered to match up to $500 worth of donations to them. Executives cited "violating internal policies" as justification which has been interpreted as an invocation of a non-disparagement agreement that Amazon employees sign. Cunningham and Costa argued that the firings were retaliatory and partly motivated by their criticism of Amazon with regard to climate change.[90] On April 16, they took part in a virtual meeting related to the crisis with approximately 400 colleagues and environmental activist Naomi Klein. There were reports from some Amazon workers that their calendar invitations to the event were being deleted.[93]

On May 1, the day of Amazon workers' May Day protest strike,[94] Amazon Web Services VP Tim Bray, resigned in protest of the company's treatment of workers.[95][96][97] Weeks earlier, in mid-April, Bray became troubled by Amazon's attacks on, and firing of, warehouse workers for demanding safe working conditions and voiced those concerns among upper management. Bray previously supported the Amazon Employees for Climate Justice (AECJ) workers' campaign for shareholder support of Amazon climate action; he was one of 8000+ employees to sign that petition.

Attempted suicides and hunger strikes by Amazon employees

In 2014, a former Amazon employee Kivin Varghese went on a hunger strike to change Amazon unfair policies.[98]

In November 2016, an Amazon employee jumped from the roof of headquarters office as a result of unfair treatment at work.[99]

Treatment of consumers

Differential pricing

In September 2000, price discrimination potentially violating the Robinson–Patman Act was found on amazon.com. Amazon offered to sell a buyer a DVD for one price, but after the buyer deleted cookies that identified him as a regular Amazon customer, he was offered the same DVD for a substantially lower price.[100] Jeff Bezos subsequently apologized for the differential pricing and vowed that Amazon "never will test prices based on customer demographics". The company said the difference was the result of a random price test and offered to refund customers who paid the higher prices.[101] Amazon had also experimented with random price tests in 2000 as customers comparing prices on a "bargain-hunter" website discovered that Amazon was randomly offering the Diamond Rio MP3 player for substantially less than its regular price.[102]

Kindle content removal

In July 2009, The New York Times reported that amazon.com deleted all customer copies of certain books published in violation of US copyright laws by MobileReference,[103] including the books Nineteen Eighty-Four and Animal Farm from users' Kindles. This action was taken with neither prior notification nor specific permission of individual users. Customers did receive a refund of the purchase price and, later, an offer of an Amazon gift certificate or a check for $30. The ebooks were initially published by MobileReference on Mobipocket for sale in Australia only—owing to those works having fallen into public domain in Australia. However, when the ebooks were automatically uploaded to Amazon by MobiPocket, the territorial restriction was not honored, and the book was allowed to be sold in territories such as the United States where the copyright term had not expired.

Author Selena Kitt fell victim to Amazon content removal in December 2010; some of her fiction had described incest. Amazon claimed "Due to a technical issue, for a short window of time three books were temporarily unavailable for re-download by customers who had previously purchased them. When this was brought to our attention, we fixed the problem..." in an attempt to defuse user complaints about the deletions.[104]

Late in 2013, online blog The Kernel released multiple articles revealing "an epidemic of filth" on Amazon and other ebook storefronts. Amazon responded by blocking books dealing with incest, bestiality, child pornography as well as topics such as virginity, monsters, and barely-legal.[105][106]

Sale of Wikipedia's material as books

The German-speaking press and blogosphere have criticized Amazon for selling tens of thousands of print on demand books which reproduced Wikipedia articles.[107][108][109][110] These books are produced by an American company named Books LLC and by three Mauritian subsidiaries of the German publisher VDM: Alphascript Publishing, Betascript Publishing and Fastbook Publishing. Amazon did not acknowledge this issue raised on blogs and some customers that have asked the company to withdraw all these titles from its catalog.[108] The collaboration between amazon.com and VDM Publishing was started in 2007.[111]

Product substitution

The British consumer organization Which? has published information about Amazon Marketplace in the UK which indicates that when small electrical products are sold on Marketplace the delivered product may not be the same as the product advertised.[112] A test purchase is described in which eleven orders were placed with different suppliers via a single listing. Only one of the suppliers delivered the actual product displayed, two others delivered different, but functionally equivalent products and eight suppliers delivered products that were quite different and not capable of safely providing the advertised function. The Which? article also describes how the customer reviews of the product are actually a mix of reviews for all of the different products delivered, with no way to identify which product comes from which supplier. This issue was raised in evidence to the UK Parliament in connection with a new Consumer Rights bill[113]

Items added onto baby registries

In 2018 it was reported that Amazon has been selling sponsored ads pretending to be items on a baby registry. The ads looked very similar to the actual items on the list.[114]

Third-party sellers

A 2019 Wall Street Journal (WSJ) investigation found third-party retailers selling over 4,000 unsafe, banned, or deceptively labeled products on Amazon.com. According to the WSJ article, when customers have sued Amazon for unsafe products sold by third-party sellers on Amazon.com, Amazon's legal defense has been that it is not the seller and therefore cannot be held liable.[115] Wirecutter reported in 2020 that over several months they "were able to purchase items through Amazon Prime that were either confirmed counterfeits, lookalikes unsafe for use, or otherwise misrepresented."[116] CNBC reported in 2019 that Amazon third-party sellers regularly sell expired food products, and that the sheer size of the Amazon Marketplace has made policing the platform exceptionally difficult for the company.[117]

As of 2020, third-party sellers accounted for 54% of paid units sold on Amazon platforms.[118] In 2019, Amazon earned $54 billion from the fees third-party retailers pay to Amazon for seller services.[119]

Competitive advantages

Tax avoidance in the US

Amazon has been criticized for its refusal to collect sales taxes from customers in states in which it does not have a physical presence, thus giving it a comparative advantage over brick-and-mortar retailers. Hypothetically, some such customers should pay the equivalent amount in use tax directly to their state; however, few customers do so.

The practice of not collecting sales tax on purchases due to lack of a physical presence ended in 2018. On April 17, 2018, The United States Supreme Court heard the case of South Dakota v. Wayfair, Inc., and issued its decision on June 21, 2018. A five-justice majority overturned Quill Corp. v. North Dakota, ruling that the physical presence rule decided in Quill was "unsound and incorrect" in the current age of Internet services.

Tax avoidance in Japan

In July 2009, the Tokyo National Tax Agency ruled that Amazon had to pay 14 billion yen ($119 million) in back corporate taxes, despite its operations in the country being formally represented by the U.S.-based subsidiary Amazon Int'l Sales, Inc.[120] Amazon refused to acknowledge the tax debt, claiming Japan had no jurisdiction on Amazon, due to Amazon not having a physical presence or registered company in Japan.

Tax avoidance in the UK

It was reported in The Guardian, April 4, 2012, that Amazon generated more than £3.3bn of sales in the UK but paid no corporation tax at all on the profits, and that it was under investigation by the UK tax authorities.[121] Amazon's tax affairs were also being investigated in China, Germany, Poland, South Korea, France, Japan, Ireland, Singapore, Luxembourg, Italy, Spain and Portugal.[122]

In November 2012, the UK government announced plans to investigate Amazon.com, along with Starbucks and Google, for tax avoidance.[123] Sky news reported that Amazon faced a temporary backlash and boycott from the general public and other businesses in the UK as a result.[124][125]

Effects on small businesses

Due to its size and economies of scale, Amazon is able to out price local small scale shop keepers.[126] Stacy Mitchell and Olivia Lavecchia, researchers with the Institute for local self-reliance argue that this has caused most local small scale shop keepers to close down in a number of cities and towns in the United States. Additionally, a merchant cannot have an item in the warehouse available to sell prior to Amazon if they choose to list it as well; monopolizing the product and price. Many times fraudulent charges have been made on the company banking and financial channels without approval; since Amazon prides itself on keeping all financial data permanently on file in their database. If they charge your account they will not refund the money back to the account they took it from, they will only provide an Amazon credit. Additionally, there is not any merchant customer support which at times needs to be handled in real-time.[127]

Government contracts

In 2013, Amazon secured a US$600 million contract with the CIA, which poses a potential conflict of interest involving the Bezos-owned The Washington Post and his newspaper's coverage of the CIA.[128] Kate Martin, director of the Center for National Security Studies, said, "It's a serious potential conflict of interest for a major newspaper like The Washington Post to have a contractual relationship with the government and the most secret part of the government."[129] This was later followed by a bid for a US$10 billion contract with the Department of Defense. Although critics initially considered the government's preference for Amazon to be a foregone conclusion, the contract was ultimately signed with Microsoft.[130][131]

The release of the Amazon Echo was met with concerns about Amazon releasing customer data at the behest of government authorities. According to Amazon, voice recordings of customer interactions with the assistant are stored with the possibility of being released later in the event of a warrant or subpoena.[132] A police request for such data occurred during the investigation into the November 22, 2015 death of Victor Collins in the home of James Andrew Bates in Bentonville, Arkansas.[133][134] Amazon refused to comply at first, but Bates later consented.[135][136]

While Amazon has publicly opposed secret government surveillance, as revealed by Freedom of Information Act requests it has supplied facial recognition support to law enforcement in the form of the Rekognition technology and consulting services. Initial testing included the city of Orlando, Florida, and Washington County, Oregon. Amazon offered to connect Washington County with other Amazon government customers interested in Rekognition and a body camera manufacturer. These ventures are opposed by a coalition of civil rights groups with concern that they could lead to expansion of surveillance and be prone to abuse. Specifically, it could automate the identification and tracking of anyone, particularly in the context of potential police body camera integration.[137][138][139] Due to the backlash, the city of Orlando has publicly stated it will no longer use the technology.[140]

Headquarters bidding leverage

The announcement of Amazon's plan to build a second headquarters, dubbed HQ2, was met with 238 proposals, 20 of which became finalist cities on January 18, 2018.[141] In November 2018, Amazon was criticized for narrowing this down to "the two richest cities", namely Long Island City and Arlington, Virginia which are in the New York metropolitan area and Washington metropolitan area respectively.[142] Critics, including business professor Scott Galloway, described the bidding war as "a con" and stated that it was a pretext for gaining tax breaks and insider information for the company.[143][144]

Congresswoman Alexandria Ocasio-Cortez opposed the $1.5 billion in tax subsidies that had been given to Amazon as part of the deal. She stated that restoring the subway system would be a better use for the money, despite rebuttals from Andrew Cuomo and others that New York would benefit economically.[145] Shortly afterward, Politico reported that 1,500 affordable homes had previously been slated for the land being occupied by Amazon's new office.[146] The request by Amazon executives for a helipad at each location proved especially controversial with multiple New York City Council members decrying the proposal as frivolous.[147]

Product availability

Animal cruelty

Amazon at one time carried two cockfighting magazines and two dog fighting videos although the Humane Society of the United States (HSUS) contends that the sale of these materials is a violation of U.S. Federal law and filed a lawsuit against Amazon.[148] A campaign to boycott Amazon in August 2007 gained attention after a dog fighting case involving NFL quarterback Michael Vick.[149] In May 2008, Marburger Publishing agreed to settle with the Humane Society by requesting that Amazon stop selling their magazine, The Game Cock. The second magazine named in the lawsuit, The Feathered Warrior, remained available.[150]

Animal rights group Mercy for Animals has alleged that Amazon allows the listing of foie gras on its website, a product that has been banned in several countries followed by California, and alleged to be produced by the mistreatment of ducks. The listing promoted animal rights groups to launch a movement called "Amazon cruelty".[151][152]

Items prohibited by UK law

In December 2015 the Guardian newspaper published an exposé of sales that violated British law.[153] These included a pepper-spray gun (sold directly by amazon.co.uk), acid, stun guns and a concealed cutting weapon (sold by Amazon Marketplace traders). All are classed as prohibited weapons in the UK. At the same time, The Guardian published a video describing some of the weapons.[154]

Antisemitic content

An article published in the Czech weekly Tyden in January 2008 called attention to shirts sold by Amazon which were emblazoned with "I Love Heinrich Himmler" and "I Love Reinhard Heydrich", professing affection for the infamous Nazi officers and war criminals. Patricia Smith, a spokeswoman for Amazon, told Tyden, "Our catalog contains millions of items. With such a large number, unexpected merchandise may get onto the Web." Smith told Tyden that Amazon does not intend to stop cooperating with Direct Collection, the producer of the T-shirts. Following pressure from the World Jewish Congress, Amazon announced that it had removed from its website the aforementioned T-shirts as well as "I love Hitler" T-shirts that they were selling for women and children.[155] After the WJC intervention, other items such as a Hitler Youth Knife emblazoned with the Nazi slogan "Blood and Honor" were also removed from Amazon.com as well as a 1933 German SS Officer Dagger distributed by Knife-Kingdom.[156]

An October 2013 report in the British online magazine The Kernel had revealed that Amazon.com was selling books that defend Holocaust denial, and shipped them even to customers in countries where Holocaust denial is prohibited by the law.[157]

That month, the World Jewish Congress called on Amazon CEO Jeff Bezos to remove from its offer books that deny the Holocaust and promote anti-Semitism, white supremacy, racism or sexism. "No one should profit from the sale of such vile and offensive hate literature. Many Holocaust survivors are deeply offended by the fact that the world's largest online retailer is making money from selling such material," WJC Executive Vice President Robert Singer wrote in a letter to Bezos.[158][159]

Although Nazi paraphernalia was still listed on Amazon in the US and Canada in 2016,[160] on March 9, 2017, the World Jewish Congress announced Amazon's compliance with the requests it and other Jewish organizations had submitted by removing from sale the Holocaust denial works complained of in the requests. The WJC offered ongoing assistance in identifying Holocaust denial works among Amazon's offerings in the future.[161]

In July 2019 the Central Council of Jews in Germany denounced Amazon for continuing to sell items that glorify the Nazis.

Pedophile guide

On November 10, 2010, a controversy arose over the sale by Amazon of an e-book by Phillip R. Greaves entitled The Pedophile's Guide to Love and Pleasure: a Child-lover's Code of Conduct.[162]

Readers threatened to boycott Amazon over its selling of the book, which was described by critics as a "pedophile guide". Amazon initially defended the sale of the book, saying that the site "believes it is censorship not to sell certain books simply because we or others believe their message is objectionable"[163] and that the site "supported the right of every individual to make their own purchasing decisions". However, the site later removed the book.[164] The San Francisco Chronicle wrote that Amazon "defended the book, then removed it, then reinstated it, and then removed it again".[163]

Christopher Finan, the president of the American Booksellers Foundation for Free Expression, argued that Amazon has the right to sell the book as it is not child pornography or legally obscene since it does not have pictures. On the other hand, Enough Is Enough, a child safety organization, issued a statement saying that the book should be removed and that it "lends the impression that child abuse is normal".[165] People for the Ethical Treatment of Animals, citing the removal of The Pedophile's Guide from Amazon, urged the website to also remove books on dog fighting from its catalogue.[166]

Greaves was arrested on December 20, 2010, at his Pueblo, Colorado home on a felony warrant issued by the Polk County Sheriff's Office in Lakeland, Florida. Detectives from the county's Internet Crimes Division ordered a signed hard copy version of Greaves' book and had it shipped to the agency's jurisdiction, where it violated state obscenity laws. According to Sheriff Grady Judd, upon receipt of the book, Greaves violated local laws prohibiting the distribution of "obscene material depicting minors engaged in harmful conduct", a third-degree felony.[167] Greaves pleaded no contest to the charges and was later released under probation with his previous jail time counting as time served.[168]

Counterfeit products

American copyright lobbyists have accused Amazon of facilitating the sale of unlicensed CDs and DVDs particularly in the Chinese market.[169] The Chinese government has responded by announcing plans to increase regulation of Amazon (along with Apple Inc. and Taobao.com) in relation to Internet copyright infringement issues. Amazon has already had to shut down third party distributors due to pressure from the NCAC (National Copyright Administration of China).[170]

On October 16, 2016, Apple filed a trademark infringement case against Mobile Star LLC for selling counterfeit Apple products to Amazon. In the suit, Apple provided evidence that Amazon was selling these counterfeit Apple products and advertising them as genuine. Through purchasing, Apple found that it was able to identify counterfeit products with a success rate of 90%. Amazon was sourcing and selling items without properly determining if they are genuine. Mobile Star LLC settled with Apple for an undisclosed amount on April 27, 2017.[171]

In the years since, selling of counterfeit products by Amazon has attracted widespread notice, with both purchases marked as being fulfilled by third parties and those shipped directly from Amazon warehouses being found to be counterfeit.[172][173] Counterfeit charging cables sold on Amazon as purported Apple products have been found to be a fire hazard.[174][175] Items that have been sold as counterfeits include a widespread array of products, from big ticket items, to every day items such as tweezers, gloves,[176] and umbrellas.[177] More recently, this has spread to Amazon's newer grocery services.[178]

As a result of these issues, companies such as Birkenstocks and Nike have pulled their products from the website.[173]

Removal of LGBT works

In April 2009, it was publicized that some lesbian, gay, bisexual, transgender, feminist, and politically liberal books were being excluded from Amazon's sales rankings.[179] Various books and media were flagged as "Adult content", including children's books, self-help books, non-fiction, and non-explicit fiction. As a result, works by established authors E. M. Forster, Gore Vidal, Jeanette Winterson and D. H. Lawrence were unranked.[180] The change first received publicity on the blog of author Mark R. Probst, who reproduced an e-mail from Amazon describing a policy of de-ranking "adult" material.[179][180] However, Amazon later said that there was no policy of de-ranking lesbian, gay, bisexual, and transgender material and blamed the change first on a "glitch"[181] and then on "an embarrassing and ham-fisted cataloging error" that had affected 57,310 books[182] (a hacker also claimed to have been the cause of said metadata loss[183]).

Removal of other books

Amazon has removed anti-Muslim,[184] and pro-rape[185][186][187] book. It temporarily banned a book promoting fringe claims about the COVID-19 pandemic, as well as books that promoted fake COVID-19 cures.[188][189]

Partnerships and associations

Hikvision

Amazon has worked with the Chinese technology company Hikvision.[190] According to The Nation, "The United States has considered sanctioning against Hikvision, which has provided thousands of cameras that monitor mosques, schools, and concentration camps in Xinjiang."[190]

Palantir hosting

Amazon provides cloud web hosting services via Amazon Web Services (AWS) to Palantir.[191] Palantir is a well known data analysis company that has developed software used to gather data on undocumented immigrants. The software is hosted on Amazon's AWS cloud.[192]

In June 2018, Amazon employees signed a letter demanding Amazon to drop Palantir, a data collection company, as an AWS customer. According to Forbes, Palantir "has come under scrutiny because its software has been used by ICE agents to identify and start deportation proceedings against undocumented migrants."[191][192]

On July 7, 2019, local Jewish leaders connected with the organization Jews for Racial and Economic Justice, along with Make the Road New York led a protest of more than 1,000 Jews and others in response to Amazon's financial ties to Palantir, and its $150 million in contracts the U.S. Immigration Customs Enforcement Agency (ICE). The direct action shut down Amazon's midtown Manhattan location of Amazon Books. The protest was held on the Jewish day of mourning and fasting, Tisha B'Av, which commemorates the destruction of the ancient temples in Jerusalem.[193][194]

Influence over local news

In late May 2020, ahead of its May 27 shareholder's meeting, at least eleven local news stations aired identically worded segments which commented positively on Amazon's response to the coronavirus pandemic.[195] Zach Rael, an anchor for the Oklahoma City station KOCO-TV, posted that Amazon had tried to send him the same prepared package.[196] Senator and Amazon critic Bernie Sanders condemned the coverage and called it propaganda.[197] The majority of the video provided was narrated by Amazon's public relations manager Todd Walker.[198] Of the eleven identified channels, WTVG in Toledo, Ohio was the only one that attributed the statements to him.[199]

Other legal action

Amazon Bookstore

In 1999, the Amazon Bookstore Cooperative of Minneapolis, Minnesota sued amazon.com for trademark infringement. The cooperative had been using the name "Amazon" since 1970, but reached an out-of-court agreement to share the name with the on-line retailer.[200]

Lush soap

In 2014, UK courts declared that Amazon had infringed the trademark of Lush soap. The soap manufacturer, Lush, had previously made its products unavailable on Amazon. Despite this, Amazon advertised alternative products via Google searches for Lush soap.[201]

Alleged libel

In September 2009, it emerged that Amazon was selling MP3 music downloads falsely suggesting a well-known Premier League football manager was a child sex offender. Despite a campaign urging the retailer to withdraw the item, they refused to do so, citing freedom of speech.[202] The company eventually decided to withdraw the item from their UK website when legal action was threatened.[203] However, they continued to sell the item on their American, German and French websites.

Alleged release of personal details

In October 2011, actress Junie Hoang filed Hoang v. Amazon.com, a $1 million lawsuit against Amazon in the Western District Court of Washington, for allegedly revealing her age on the Internet Movie Database, which Amazon owns, by using personal details from her credit card. The lawsuit, which alleges fraud, breach of contract and violation of her private life and consumer rights, states that after joining IMDBPro in 2008 to increase her chance of getting roles, the actress claims that her legal date of birth had been added to her public profile, revealing that she is older than she looks, causing her to suffer a substantial decrease in acting work and earnings. The actress also stated that the site refused her request to remove the information in question.[204] All claims against Amazon, and most claims against IMDB, were dismissed by Judge Marsha J. Pechman; the jury found for IMDb on the sole remaining claim. As of February 2015, the case against IMDb remains under appeal.[205][206]

Amazon reviews

As the customer review process has become more integral to Amazon.com marketing, reviews have been[207] increasingly challenged for accuracy and ethics. In 2004, The New York Times[208] reported that a glitch in the Amazon Canada website revealed that a number of book reviews had been written by authors of their own books or of competing books. In response, Amazon changed its policy of allowing anonymous reviews to one that gave an online credential marker to those reviewers registered with Amazon, though it still allowed them to remain anonymous through the use of pen names. In April 2010 the British historian Orlando Figes was found to have posted negative reviews of other author's books.[209] In June 2010, a Cincinnati news blog uncovered a group of 75 Amazon book reviews that had been written and posted by a public relations company on behalf of its clients.[210] A study at Cornell University in that year[211] asserted that 85% of Amazon's high-status consumer reviewers "had received free products from publishers, agents, authors and manufacturers." By June 2011, Amazon itself had moved into the publishing business and begun to solicit positive reviews from established authors in exchange for increased promotion of their own books and upcoming projects.[212]

Amazon.com's customer reviews are monitored for indecency but do permit negative comments. Robert Spector, author of the book amazon.com, describes how "when publishers and authors asked Bezos why amazon.com would publish negative reviews, he defended the practice by claiming that amazon.com was 'taking a different approach...we want to make every book available – the good, the bad, and the ugly...to let truth loose'" (Spector 132). Allegations have been made that Amazon has selectively deleted negative reviews of Scientology-related items despite compliance with comments guidelines.[213][214]

In November 2012, it was reported that Amazon.co.uk deleted "a wave of reviews by authors of their fellow writers' books in what is believed to be a response to [a] 'sock puppet' scandal."[215]

Following listing for sale of Untouchable: The Strange Life and Tragic Death of Michael Jackson, a disparaging biography of Michael Jackson by Randall Sullivan, his fans, organized via social media as "Michael Jackson's Rapid Response Team to Media Attacks", bombarded Amazon with negative reviews and negative ratings of positive reviews.[216]

In 2017, Amazon removed an inordinate number of 1-star reviews from the listing of former presidential candidate Hillary Clinton's book, What Happened.[217]

In 2018 and 2020, it was reported that Amazon had for some time allowed sellers to perform a bait-and-switch confidence trick: after reviewers had heaped praise on a particular product, the product would be replaced with a different product altogether while retaining the earlier positive reviews.[218][219]

WikiLeaks hosting

On December 1, 2010, Amazon stopped hosting the website associated with the whistle-blowing organization WikiLeaks. Amazon did not initially comment on whether it forced the site to leave.[220] The New York Times reported: "Senator Joseph I. Lieberman, an independent of Connecticut, said Amazon had stopped hosting the WikiLeaks site on Wednesday after being contacted by the staff of the Homeland Security and Governmental Affairs Committee".[221]

In a later press release issued by Amazon.com, they denied that they had terminated Wikileaks.org because of either "a government inquiry" or "massive DDOS attacks". They claimed that it was because of "a violation of [Amazon's] terms of service" because Wikileaks.org was "securing and storing large quantities of data that isn't rightfully theirs, and publishing this data without ensuring it won't injure others."[222]

According to WikiLeaks founder Julian Assange, this demonstrated that Amazon (a US based company) was in a jurisdiction that "suffered a free speech deficit".[223]

Amazon's action led to a public letter from Daniel Ellsberg, famous for leaking the Pentagon Papers during the Vietnam war. Ellsberg stated that he was "disgusted by Amazon's cowardice and servility", likening it to "China's control of information and deterrence of whistle-blowing", and he called for a "broad" and "immediate" boycott of Amazon.[224]

Environmental impact

In September 2019, employees at their Seattle headquarters, organized under the name Amazon Employees for Climate Justice, walked out in protest over Amazon's climate policy. Specifically, they demanded that Amazon reach zero emissions by 2030, cut ties to oil and gas companies, and to stop funding lobbyist groups accused of spreading climate denialism.[225][226][227]

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External links

• All About Amazon.com Collects some of the best reporting and analysis on Amazon, with an emphasis on critical perspectives.
• "Reasons not to buy from Amazon". Richard Stallman. stallman.org.
• "What's Wrong with Amazon?". Dennis Lehane. Social Justice Books.
• "How To Avoid Dangerous Counterfeits On Amazon This Holiday Season". Wade Shepard. Forbes.