> Yet as today’s letter points out, subsequent investigations by The Wall Street Journal, Reuters, and The Markup revealed that not only did Amazon employees working on private-label items have access to third-party data, but they routinely used it, even discussing it openly in meetings. “Amazon employees regularly violated the policy—and senior officials knew it.”
That's pretty incredible. I'm curious what kind of data this is; knowing the nature of the data would help us understand how platform operators can abuse their position.
Consider: you are on the Amazon Basics product development team. If you do well, you will be promoted, given bonuses, and greatly financially rewarded. If you do poorly, well, Amazon let's go of 6% of employees in every org every year[0].
There are policies in place saying that you definitely can't look at the data around which third party sellers are doing well, selling lots of stuff. But also there's no auditing in place to see if you check it or not. It's all a big data warehouse and you have access to it.
And hey, you've heard everyone else is looking at this data. You're just taking a quick look to get ideas do you don't get fired. What's the harm? You'll help the company do well and won't have to polish your resume.
They should have used the Google excuse for the middle step.
Construct an algorithm that tells you what you want, based on the data that you're not supposed to be using, and then throw your hands up when anybody asks and say "Nobody really knows how ML models work."
Or before machine learning was an option: management consultants.
PMs at Amazon, even people who need visa sponsorships, have options (and probably better options). Don't defend their poor choices. Engineers at Amazon have even more options.
Ethical people act ethically and tend to stay far away from the unethical.
It follows that unethical people will this group together to commit their unethical conspiracies. See the Political parties, big oil, pharma, insurance, the fed, hedge funds, etc.
Ethical people have been self selecting out of these lucrative industries forever. What’s left are the clueless and the criminal.
I wouldn't say it's a capitalism problem but more of the erosion of a free market.
Anything that is counter to a free market rewards unethical behaviors. But politicians don't need to be bought. It's just what has been tolerated. This is a great enabler and you can see this with the SEC as just one example.
Regulatory capture occurs [1] and the megacorps infiltrate. People want to get ahead and they hide behind these megacorps, many of which have unethical behavior pushed by the leadership, investors, their boss, and sometimes even condoned by in-house lawyers. If there is no risk to shareholder value and no risk of personal charges, they will do it.
We need some criminal charges levied and some extreme fines. Maybe just set the fines to equal the money they stash overseas? It HAS to grossly outweigh the economic gain from the behavior, so that it's a big hit to shareholder value. [1]
There are always rewards for unethical behaviors, which is why people engage in them. This is true whether the framework is communism, capitalism, or marriage.
Competition encourages the unethical behaviors and punishes the ethical behaviors. Set the competition knob to 0, everyone slacks, crank it to 11, and everyone cheats.
Despite the fact that managing this balance is fundamental to a capitalist society, it's extremely typical for the latter half of this balance to be ignored, for competition to be framed as an unmitigated positive, and for the Goodhart's Law side of it to be completely swept under the rug.
Culpability should be attributed both to the individual and to the system. Otherwise it's easy to construct systems that bypass responsibility. Like we see here.
I feel like what differs is what type of unethical behaviors different systems encourage.
Capitalism encourages screwing over other people, being cutthroat in business, etc.
Communism encourages different faults, such as passivity, mob mentalities, and not taking responsibility.
Anarchism would discourage considering the effects of 2nd-order+ consequences.
The competition knob is but one knob among many. It's the one America happens to have at about an 8.5 (and one which I dislike greatly), but I don't think this problem is unique to capitalism.
>The competition knob is but one knob among many. It's the one America happens to have at about an 8.5 (and one which I dislike greatly), but I don't think this problem is unique to capitalism.
Given the levels of consolidation we've seen over the past 30 years or so, I'd say that a lack of competition also contributes to unethical behavior. In fact, the consolidation pursued by many corporations is predicated on swallowing up even potential competitors in an effort to consolidate their dominant position.
If you don't follow the perverse incentive du jour in a decentralized system, you'll get rolled.
We're drifting off topic, though. If Amazon heavily incentivizes bad behavior, should they be allowed to reap the rewards and discharge the blame? Absolutely not. They're culpable.
Even better, you can be like Johnson & Johnson and create a new crappy glove, then abuse bankruptcy laws to transfer liability to that new glove so that it becomes responsible for everything. Now you get away with committing robbery and you still get to keep your favorite glove too.
It’s data on what products are selling well, which they use to create clones and then sell under “Amazon Basics” and other brands.
It’s a problem because the small sellers take the financial risk trying to sell a new product, then when Amazon sees it’s doing well they make the clone and get the profits.
I think it indicates a deeper problem, either on how we perceive these companies, or how Amazon succeeded in making itself look like a random traditional company. I don't know the solution outside a very prominent decade lasting lawsuit we could all point at, the same way we had the Microsoft antitrust lawsuit decades before.
Amazon on one hand wants to pretend to be a third party market place to avoid liability, regulation, inventory holding risks and so on, and on the other hand wants to collect all the profit, data and exert control as a first party seller.
If you still have an Amazon account, ask for your data download from Amazon.com. You will probably be astounded to see that they retain just about every interaction you have ever had on their platform and products. I was a light user and received 88 zip files containing many files within them containing IP addresses, devices, and the most minute details. Now imagine how much they collect about sellers and products. You can assume it is everything they can collect.
TBF every company managing a web application should be doing the same.
You positively need to know what your users come to click on, where they bail, what features they never use, what browsers constantly drop out at this specific part of your website, what IP uses the bot that scrapes your most costly site wide search every millisecond etc.
Sure, any of these data could be derive from more focused, pinpoint check if you knew in advance what exactly you need to know. But let's be realistic, there's no way to anticipate every single use case and only collect the minimum data needed to fulfill it.
I don't see detailed usage data collection as a critical issue as long as it isn't sold/leaked/stored for decades/misused to harm. We can come up with so many cases where it has been effectively misused, but I'd argue it's like saying kitchen knives are misused again and again to kill people and we should stop their use. It's not realistic.
I am well aware that any commercial site tracks everything they can. I was merely trying to answer this guy's question about what data Amazon has on sellers.
Personally I don't like having to show my ID when I walk into a store and then have a guy follow me around with a clipboard writing down everything I look at, touch.. I run out of such stores which is why I deleted my Amazon account.
> Personally I don't like having to show my ID when I walk into a store and then have a guy follow me around with a clipboard writing down everything I look at, touch.. I run out of such stores which is why I deleted my Amazon account.
This...is kinda like the next frontier, with in-store camera tracking and linking it to the customer at checkout (either through the loyalty card or credit card token if applicable). We're already partially in that future IMO.
Yes physical stores are becoming as hostile as ecommerce sites. When i enter one, my phone stays in airplane mode, wear a mask to evade facial recognition and pay cash.
The difference is that Target is a retail store, not a marketplace. Target has already bought your products from you when Target sells them to customers, and aggregates data about its own sales of your products.
Amazon is a marketplace, and pays nothing to buy your products when they're offered for sale on its virtual shelves. It purports to provide an open and equal common area for companies (including itself) to sell products, yet only Amazon has access to the treasure trove of data about the behavior of consumers on its site.
> Target has already bought your products from you when Target sells them to customers
This is not true for all products. Some are sold under a pay-per-scan model, where the product is owned by the supplier up until the barcode is scanned at checkout, whereupon it is immediately purchased by the store and sold to the consumer.
For other products, suppliers may also be required to accept unsold goods for a full refund of the store’s purchase price.
Stores are marketplaces too, and shelf space – particularly the valuable shelf space like end caps – is not free.
There are products like that, but to my knowledge, there's not a lot of them and it tends to be certain specialized categories. The only example I can think of where the supplier will refund the product if it doesn't sell is live plants.
Another example of a product that commonly has a full refund clause is books.
But pay-per-scan is much more common. Examples include everything from trading cards to makeup to sandwich bread. The supplier will often restock these products themselves, so the store doesn't even need to track inventory.
I'm having trouble finding any solid numbers on what percent of products are sold pay per scan. I just know that in the retail stores I've worked in, the only examples I know of are live plants and possibly aquarium fish.
Target is an online marketplace for 3rd-party products. They don't go out of their way to advertise it, but they call the program Target+. You can find online-only 3rd-party items by searching their website. They ship the items to you, and you can return them in-store if there's a problem. Most people never notice the middleman supplier.
Walmart does this too. Newegg made the switch several years ago. Large retail outlets which do not have a "marketplace" online option are the exception rather than the rule.
Different companies do different levels of vetting, but the retail ecosystem is vastly more accessible to small-timers than it was in the 2000s.
Beside the fact that they lied to Congress about.. I guess there is an expectation.
If you put your products on Amazon marketplace, you are expected to join a marketplace. You don't necessarily expect for Amazon to also join the marketplace by using your data to compete against you.
Also you can use Amazon services and warehouses even for products that you do not wish to sell on Amazon website. Essentially using Amazon as a 3PL service. Again, you might not expect Amazon to use your data for their own products.
If you sell your products to Target, this isn't exactly a marketplace. This is a retail outlet. You know they can measure your sales, measure your competitor sales, etc. And you know they won't lie to you about doing it.
It's been a long time since some of the congressional hearings about anti-competitive practices in the software industry, and I'm afraid I'm too tired to look up the details at the moment, but one of the items I remember from the discussion was that Amazon sales employees were allowed by company policy to look at aggregated figures (per-market, per-industry, etc) for merchants on their platform.
That's fine as-is -- nothing wrong with that in principle -- but what I seem to recall employees began doing (and I can totally imagine how this would become an underground "sneaky trick" that employees would begin to learn and share with each other) was to create so-called aggregate groups that only contained a very small number of merchant businesses.
That way they could claim (and perhaps keep a straight face when saying) that they were only looking at aggregate group-level figures, but the statistical reality of the situation would have been that they were looking at information about a few -- or perhaps even only one -- business.
Somewhat related: any time a business/person has access to data about a customer or their business, they're in a position of power and are able to use that data against the customer.
When you apply to rent a house, you're required to provide pay stubs and salary information. The landlord can (does?) use this to know how much they can jack up your rent next lease term (my landlord raised our rent $800/month in January).
Same with insurance salespeople, car salespeople, etc. Everyone who gets access to your financial data can use it against you.
There should be a 3rd party involved -- they take your documentation and then report to the landlord/salesperson/etc. a simple "is the person qualified?" Yes or No. And then permanently destroy said documentation.
Yeah tell me about it. I actually made a mistake, they raised it by $600. The landlord acted so surprised when we didn't renew our lease. When we left, the landlord listed it and rented it out for the original lease amount. I'm guessing those people can expect a big rent increase when their term is up as well.
Yeah, the third-party sellers know that. That's what they've been screaming about for a decade while being squeezed out of the market. Now let's see if we're willing to prosecute white collar crime against regular people for once.
Considering this is an indictment in america against a monopolistic company: Nothing will happen, amazon will continue printing money and the small guys can whine all they want.
So I am a bit confused. How does this differ from in store brands like Bowl & Basket (Shoprite) or Good & Gather(Target)? Haven't those in-store brands been going on for years and years selling clones and commodities?
Do many large grocers in the US seem to be regionalized? This mention of "Shoprite" may have given me an idea of the location this poster is from (Eastern Mid-Atlantic region?)
My experience over the past few decades is that the grocery store companies have slowly consolidated from small chains, to regional companies, to national empires, but they keep the original name of the store from 30 years ago to appear “local”.
Yea pretty much every region has its own grocery brand. There's always walmart/target and whole foods/trader joes in urban areas, but then there's a local brand too. We got Jewel in my area.
A quick bit of browsing the Amazon Basics line of products would certainly lead one to assume they had totally knocked off the 3rd party products they thought they could without getting major brand pushback.
I'm not sure about all Amazon Basics, but a few of the ones that I checked out were just third-party products that Amazon made deals with to slap their name on. Similar to how Costco's Kirkland brand is often the same as a popular brand but with a different label.
For example, the Amazon Basics guitar pedals are created by Nux pedals (the PCBs even have Nux on them).
So from what I can tell a lot of these are not ripoffs, just rebranded products. Amazon doesn't need to waste resources on manufacturing products that are already being sold on their site, but they can make deals with people that are already manufacturing those products.
Amazon never claimed it didn’t knock off other sellers’ products. What it claimed is that it didn’t use private data about how well other sellers’ products sold to decide what to knock off – a claim that was apparently false.
I’m surprised I scrolled through the entire comment thread and have yet to find someone raise the following concern.
With this reputational and data exposure hit revealed, exactly how much are you going to believe the same organization when they say, “we’d never violate your trust placed in our AWS services!” Keep in mind this is the same organization that gleefully says, “your margin is my opportunity”.
It seems more likely that Amazon would just purchase this data from Nielsen or IRI. The data would be nearly as good for the Amazon Brand teams, without the moral hazard of looking at private seller data. It may seem weird to purchase data on your own storefront, but it protects you from situations like this.
this seems like it might make sense, but amazon is incredibly uncooperative on their sales data as you might guess. even for an IRI or Nielsen, its a challenge to obtain this data with a large enough sampling
The way to deal with this is to arrest a whole group of Amazon execs, and offer the usual deal - the first one to make a full confession and implicate others gets off, the others get prosecuted. This is official DOJ policy.[1]
Agreed, nothing sort of holding executives accountable with actual threat of prison time fixes this. Fines don’t matter once you are the winner in the market. Have to set an example and stop individuals from feeling safe when lying for companies.
Fines against individuals, with a prohibition on further compensation/employment by the company/organization would likely be sufficient to discourage this behavior. There is widespread disagreement as to whether prison should be used as a punitive tool, and it would serve no other purpose in a case like this.
Corporate fines seem ineffective and almost useless , especially because these sorts of actions will often benefit the individuals undertaking them (principal agent problem). I suspect the motivation behind corporate fines is that they can be large monetary amounts, and look good for the investigator/agent/attorney.
Going to jail is a lot scarier than getting a bonus clawed back and losing your job when you have enough to retire on already.
Personal fines and no prison time just tweak the risk/reward calculation a little bit. These executives make a lot of money, and I would guess if they are the type to do illegal behavior they wouldn't mind gambling if the reward is great enough. I could even see it making this behavior more likely to happen if it's clear that they won't go to jail for illegal behavior and all they have to worry about is a fine and losing their job.
>"Going to jail is a lot scarier than getting a bonus clawed back and losing your job when you have enough to retire on already."
Reductio ad absurdum: Getting executed is even scarier than prison, shouldn't we 'spring for' that instead?
I think that a fine which meaningfully reduces an individual's means is possible, and preferable to using prison sentences to instill fear.
My view is that the extreme sentences provided for in legislation are causing many non-guilty people to plead to lesser offenses, which is a real problem. I also think that we shouldn't be crowding jails and prisons with people who have committed civil offenses.
What do you believe prison is for? Do you think it works?
The deterrent has to be enough of a deterrent to actually deter people, else it's a negligible downside risk (like a slap on the wrist fine and job loss for this case). Yes, execution would certainly put a stop to this behavior, even more so than jail time (and could also help with prison overcrowding), but I think to err is human and execution is a little too extreme and would cause society to be unhappy and scared.
Yes, I think there are a lot of extreme prison sentences in this country and we incarcerate way too many people. But I think it is ridiculous to be so lopsided with punishments and only put people without means in jail. White collar crimes like this one have a larger negative impact on society than some guy caught stealing a car and they should not get off with a slap on the wrist.
I don't think prison is for rehabilitation. Some humans act incredibly selfishly and if there are no consequences to bad actions, they will act selfishly and they will have a negative impact on society. Law enforcement and criminal justice is a balancing act with no perfect right answer. It is not tenable to be too far on either end of the spectrum and I think we need to try to strike that balance where crime is deterred enough but where we don't live in a police state dystopia that causes a depressed and miserable society. I don't really know where that point is, but I am all for equitable punishment of white collar criminals.
I’d agree if I believed they could/would take money out of their retirement accounts and somehow disallow benefitting from trusts, but that seems highly unlikely.
Prison time allows for disincentivizing as well as rehabilitation. Death sentence on the other hand…
Perhaps part of the problem are our prison conditions. And the minimal effort directed towards true rehabilitation. Fixing those might make prison time less ethically fraught.
I looked at your other comments and they're usually quite contributory and positive, so with that in mind, what inspired this one today? Because it's just the very worst sort of annoying pedantry.
>"Less people are willing to gamble their lives. The threat of prison is more effective than the threat of losing some money."
Since you brought it up... reductio ad absurdum: The threat of execution is even effective than prison, shouldn't we 'spring for' that instead?
As per my sibling comment:
I think that a fine which meaningfully reduces an individual's means is possible, and preferable to using prison sentences to instill fear.
My view is that the extreme sentences provided for in legislation are causing many non-guilty people to plead to lesser offenses, which is a real problem. I also think that we shouldn't be crowding jails and prisons with people who have committed civil offenses.
If fines are to work they would have to meaningfully reduce an individual's standard of living and continue to enforce that. Otherwise what's to stop Amazon from having people lie to congress, get fined, and then "gift" them the money back with a heavy bonus? What's to stop Amazon's corporate buddies from hiring the liar with a massive bump and a bonus to cover the fine?
Some crimes justify "extreme sentences" and knowingly lying to congress should be one of them. I find a prison sentence far less extreme than forcing a person to a lower standard of living and preventing them from being to work for accept large amounts of money in the future.
> The threat of execution is even effective than prison, shouldn't we 'spring for' that instead?
That would also be an effective deterrent, more so than prison alone probably. Torture would be even better, especially torture of family, friends, and pets.
> My view is that the extreme sentences provided for in legislation are causing many non-guilty people to plead to lesser offenses, which is a real problem. I also think that we shouldn't be crowding jails and prisons with people who have committed civil offenses.
Everything has pros and cons. How many innocent people will plead to a lesser crime vs how much will crime be reduced by the threat of prison?
In lieu of a study to answer that, we have to rely on our experiences dealing with people. You seem to believe a criminal will be deterred by fines, but I disagree.
This isn’t the type of opinion that can be changed by arguing over the internet.
Counterpoint: a fine will do nothing but ensure that assets will end up in trust. Prison will actually ensure that even if they do escape financial ruin, they will be paying a debt in hard, non-fungible, time.
I can think of something that would work. If Amazon is found guilty of abusing it's the data it's trusted witb, for anything, the entire company should be banned from doing business with the government. No government purchases of goods, no services hosted on AWS, no logistics provided by Amazon's last mile services, etc. If Amazon are shown to be abusing data then they shouldn't be allowed to have any public data.
Maybe even extend that to all government suppliers...
Isn't that considered illegal as well, to arrest people without enough evidence and then demand they admit guilt to be released? I can see how this would hurt a case more than it would help one. Imagine if there is a jury trial and it comes out that people were forced to make confessions under duress.
> before then, cops and the prosecutor only need "probable cause" which is typically understood to allow that evidence may be gathered later.
No, it isn't; probable cause must be based in evidence. For cases requiring indictment, this evidence is presented to a grand jury before charges can formally be filed; for cases where the conditions allowing warrantless arrest do not apply, it occurs in the presentation of evidence to support an arrest warrant; for other cases the evaluation (by hearing or otherwise) happens generally within 48 hours of arrest, and delay to gather evidence has specifically been ruled unconstitutional.
It's not hard to show probable cause. The issue in most corporate crime is not "did it happen", but "who knew about it" and "who authorized it". Prosecutors, to get an indictment, only have to show it happened, and that the people being prosecuted probably knew what was going on, or should have known. Sorting out exactly who said and did what when when comes out later.
Aren't they more afraid of violence and threats from the other execs? I would think that some violent threats are not off the table when there's so much on the line (jail time) and so much money involved.
Eh, I could believe that certain Amazon execs wield as much or more power than whatever authority they’re dealing with. At least in the sense that they command more people and more money that whatever organization is prosecuting them.
I think the DOJ and other agencies are way too addicted to getting fines. I don't think they want to interrupt that cashflow by actually going after people.
That's probably happening too but the bigger perverse incentive is that they don't want to actually debilitate market leading companies to ensure the monopoly of the remaining companies.
The burden of proof in cases like this is actually carried by the mountains of emails, product design documents, and all other forms of internal documentation. Only the e-mails get regularly purged.
This isn't a dope dealer growing weed in his car and having his buddies sell it for him. These sorts of operations produce a lot of paperwork. As an employee who is actually tasked with building/working with all of these systems/processess, you don't get inducted into the secret conspiracy with a nod, wink, handshake, and a secret decoder ring.
> “Amazon lied through a senior executive’s sworn testimony that Amazon did not use any of the troves of data it had collected on its third-party sellers to compete with them,”
It's time to set an example. This sworn testimony was knowingly false. So charge this Senior executive with lying to Congress and lay down the likelihood of prison time. Watch them flip on their other execs.
Everyone suspected they were lying, but suspicion isn't proof. If proof has emerged, it's imperative to go hard enough to make up for the many times where conservative standards of proof let obvious lies slip through.
Agreed, amazon's executives are exteremly entitled, this is just one in series of examples where they think of themselves as untouchable. The executives need to be proved wrong about their untouchability.
That's pretty incredible. I'm curious what kind of data this is; knowing the nature of the data would help us understand how platform operators can abuse their position.