|From: Glenn Petersen||9/11/2019 8:18:22 PM|
|Amazon Probed by U.S. Antitrust Officials Over Marketplace|
The FTC is interviewing merchants to determine whether the e-commerce giant is using its market power to hurt competition.
By Spencer Soper and Ben Brody
September 11, 2019
A team of Federal Trade Commission investigators has begun interviewing small businesses that sell products on Amazon.com Inc. to determine whether the e-commerce giant is using its market power to hurt competition.
Several attorneys and at least one economist have been conducting interviews that typically last about 90 minutes and cover a range of topics, according to three merchants. All were asked what percentage of revenue their businesses derive from Amazon versus other online marketplaces like Walmart Inc. and EBay Inc., suggesting regulators are skeptical about Amazon’s claims that shoppers and suppliers have real alternatives to the Seattle-based company. One merchant, Jaivin Karnani, said he was surprised the FTC returned his call the very next day.
The interviews indicate the agency is in the early stages of a sweeping probe to learn how Amazon works, spot practices that break the law and identify markets dominated by the company. The length of the interviews and the manpower devoted to examining Amazon point to a serious inquiry rather than investigators merely responding to complaints and going through the motions, antitrust experts say.
Amazon shares fell less than 1% to $1,812 at 9:36 a.m. in New York.
“Early in an investigation, that’s a sign of staff doing a serious job,” said Michael Kades, who spent 20 years at the FTC. “They’re spending lots of time with witnesses and trying to really understand what they’re saying.”
Amazon hasn’t disclosed an investigation by the FTC, and the agency rarely confirms scrutiny of individual companies. But Chairman Joe Simons told Bloomberg in August that he welcomed hearing from third-party merchants, who now sell more than half of products on Amazon. Such private conversations are likely to yield far more insights into Amazon’s business than the public grilling of tech executives by Congressional committees.
Amazon declined to comment and pointed to a statement Consumer Business chief Jeff Wilke made in June when asked about reports that the FTC was looking into Amazon. ”We believe that most substantial entities in the economy deserve scrutiny,” he said. “Our job is to build the kind of company that passes that scrutiny with flying colors.” The FTC declined to comment.
The probe is part of a broader examination of the control companies like Amazon, Google and Facebook have over the U.S. economy. The FTC is also investigating Facebook while the Justice Department is probing Google. Separately, 50 state attorneys general have announced an antitrust probe of Google. The House Judiciary Committee is also probing big technology companies. One area of interest is whether Amazon has an unfair advantage over third party merchants when it competes with them to sell similar products on its own platform.
A key early task for the FTC is defining Amazon’s competitive universe. The company has long argued that it should be considered a retailer that competes against rivals online and offline, a designation that Amazon says gives it a meager 4% share of the U.S. retail market. If Amazon’s market is narrowly defined as online shopping, its share rises to almost 40%—giving it significant leverage. Narrowing the market by product category, such as electronic books, gives Amazon even more dominance.
The FTC is also seeking to determine the extent of Amazon’s power over its suppliers. All three merchants fielded questions on how much of their revenue comes from Amazon compared with other online platforms. Many sellers get 90% or more of their sales from Amazon, making them vulnerable to the company’s demands and abrupt, unexplained changes in its policy.
FTC investigators examining Amazon likely want to move quickly to make sure states or other agencies don’t get ahead of them, said Jennifer Rie, an analyst at Bloomberg Intelligence who specializes in antitrust litigation. The investigators start by learning the inner workings of the company before narrowing their inquiry.
“They’re trying to learn as much as they can about the industry from people who aren’t the target of their investigation,” Rie said. “They’re in a background phase.”
The FTC’s interest in Amazon is spreading to sellers via word-of-mouth. Some merchants fear incurring Amazon’s wrath by cooperating with the agency. One who spoke with an FTC attorney said he was assured the conversation would be confidential unless it led to an official complaint against Amazon or the transcript was subpoenaed by Congress.
“These conversations are going to keep happening,” said Chris McCabe, a former Amazon employee who now runs a business helping Amazon merchants. “I’ve had several people ask me how to go to the FTC. I give them an email, and the FTC is taking their calls.”
Desperation prompted merchant Karnani to contact the agency to report his difficulties selling video games and electronics on the site. Karnani told investigators he lost 10% of his sales after Apple and Amazon reached an agreement last year to limit who could sell Apple products on the site. The change followed years of concern about counterfeit iPhone accessories. He also described account suspensions in recent months during which Amazon hung on to his inventory and money.
“I told them if Amazon suspends you, it’s like a death knell,” said Karnani, who has been selling on the site for two years. “I told them when Amazon shuts you off, they sit on your money for 90 days and there’s nothing you can do. They were surprised about that.”
Merchants can appeal suspensions. But even if they prevail, it’s a guilty-until-proven-innocent process that can cut off their sales for weeks without warning, potentially putting them out of business. Amazon in August instituted a new 30-day-notice policy regarding suspensions to appease regulators in Germany, who maintained the process was unfair because it wasn’t transparent. In an emailed statement, an Amazon spokesperson said: “We have an appeals process where sellers can explain how they will prevent the violation from happening in the future or let us know if they believe they were compliant.”
Molson Hart, who sells toys on Amazon through his company Viahart, said he spoke with the FTC for 90 minutes about an article he posted on Medium detailing how 98% of his sales come from Amazon and that other platforms like EBay and Walmart account for less than 2% of revenue. He declined to discuss specifics of his conversation with FTC investigators but said the conversation focused on his Medium article. It argued that Amazon, which faces little competition online, has been raising fees and selling advertising—forcing merchants to raise prices.
Another Amazon merchant, who spoke on condition of anonymity, said he spent about 90 minutes on the phone with an FTC investigator in July and has since provided the agency with documents and data.
He described helping triple sales of a health and beauty brand by spending hundreds of thousands of dollars to advertise on the site. Amazon noticed, placed its own wholesale orders with the brand and sold the product directly, cutting him out and sticking him with hundreds of thousands of dollars in unsold inventory. Another time, he told investigators, Amazon discovered one of his products being sold for less at Walmart.com and then made the item less visible to shoppers until the Walmart price went back up.
If merchants are so reliant on Amazon for sales that they are unwilling to offer better prices on other platforms like Walmart and EBay, that can hurt competition, said Diana Moss, president of the American Antitrust Institute, a nonprofit that advocates for aggressive antitrust enforcement. “That really is the central question in an inquiry like this, and that's why Amazon downplays its market power.”
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|From: Glenn Petersen||9/16/2019 8:26:23 PM|
|Amazon reportedly tweaked its search results to promote more profitable products|
Published Mon, Sep 16 2019 12:01 PM EDT
Updated Mon, Sep 16 2019 1:18 PM EDT
Annie Palmer @annierpalmer
Amazon changed the algorithms that power its product-search system to favor products with higher profit margins, The Wall Street Journal reported, citing sources familiar with the situation.
- Amazon changed the algorithms that power its product-search system to favor products with higher profit margins instead of items that are bestsellers or the most relevant for consumers, The Wall Street Journal reports.
- Some divisions at Amazon had also pressured search engineers to favor its own “private-label” products, although it’s not clear from the report if the changes ended up boosting those products.
The company adjusted its product-search system late last year so that instead of surfacing products that were bestsellers or the most relevant for consumers, it incorporated new variables meant to boost the prominence of products that delivered higher profit margins.
Some divisions in the company had also pressured search engineers to favor its own “private-label” products, although it’s not clear from the report if the changes ended up boosting those products.
Internally, high-level executives in Amazon’s retail business and A9, the company’s search team, fought over the move. Retail executives believed Amazon should showcase in-house brands, similar to how grocery stores promote their own brands, while employees who worked on the project argued that it wasn’t in Amazon customers’ best interest to surface its own products first, according to the Journal.
Additionally, Amazon’s own lawyers pushed back against the change, saying it could attract further scrutiny from antitrust regulators.
An Amazon spokesperson told CNBC that it did not change search results to include profitability, but acknowledged that long-term profitability is one factor it used when evaluating new search features.
“We have not changed the criteria we use to rank search results to include profitability. When we test any new features, including search features, we look at a number of metrics, including long term profitability, to see how these new features impact the customer experience and our business as any rational store would, but we do not make decisions based on that one metric. Amazon designs its shopping and discovery experience to feature the products customers will want, regardless of whether they are our own brands or products offered by our selling partners,” said the spokesperson.
The spokesperson also noted that Amazon’s online sales represent less than 1% of global and 4% of U.S. retail sales, and that its private label sales represent only 1% of the total products sold on its site.
The report comes as Amazon faces ongoing antitrust probes from the European Union’s competition watchdog, as well as in the U.S. over its marketplace activity. Last week, as part of a broader antitrust inquiry into major tech companies, leaders of the House Judiciary Committee requested documents from Amazon regarding how its own products factor into its search algorithm, as well as what data is made available to sellers on the platform.
The company’s shares are down about 2% in mid-day trading.
Read the full report from The Wall Street Journal.
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|To: Glenn Petersen who wrote (163865)||9/18/2019 1:39:21 PM|
|IMO -a future Amazon given. Increasing consumer cost to use the Prime feature. However cutting FED-X I suppose helps with shipping costs. |
4 Ways to Avoid Paying $119 for Amazon Prime Free Shipping
With Prime Day reportedly right around the corner, you'll want to sign up for Prime ASAP. But if you're looking to pay less than $119 for Amazon Prime, there are options.
By PCMag Staff
June 18, 2019 3:00PM EST
In 2014, Amazon Prime got a price hike from $79 to $99 per year. It was the first for Amazon Prime in the program's nine-year history, and the online retail giant said the increase was necessary to offset the fuel and transportation costs needed to deliver millions of items in two days, for free.
Last year, Prime got another price hike, from $99 to $119 per year.
Prime is free to join for 30 days, so you can try it without making that year-long commitment. Sign up at the holidays to get free shipping on your gift purchases and then cancel, for example. There's also the option to sign up for Prime for $12.99 per month, though if you plan to use it for any length of time, the $119 annual fee is a better deal.
The main Prime perk is free, two-day shipping, and that could soon be one-day shipping. But Prime members also get Amazon Video streaming, Amazon Prime Music, Prime Reading, and Amazon Photos. If you're a regular Amazon user, Prime is a pretty good deal.
But perhaps you're on a budget and are looking for ways to pay less than $119 for Amazon Prime free shipping and other perks. Here are some options.
1. Join Amazon Student
Students still get a discounted Amazon Prime rate when they join Amazon Student.
Those who sign up get a six-month trial that includes free, two-day shipping on Prime items, as well as access to Prime Video, Amazon Photos, Prime Reading, and free same-day delivery in certain areas. Once the six-month trial is up, Amazon charges $59 per year or $6.49 per month for four years or until graduation, whatever comes first. At that point, Prime Student also kicks in unlimited Amazon Music streaming. To qualify as a student, you'll need a .edu email adress.
2. Get an EBT or Medicaid Discount If you have a valid Electronic Benefits Transfer (EBT) or Medicaid card, you can sign up for Amazon Prime for $5.99 per month for up to four years. After Amazon verifies your accounts, you're eligible for free, two-day shipping, Prime Video, Prime Music, and Prime Photos; Household sharing is not included. EBT/Medicaid status will have to be verified every 12 months; Amazon will email you to re-verify.
3. Spend $25 or More If free shipping is your game, Amazon offers free shipping on orders of $25 or more for those without Prime, with delivery in 5-8 business days. With millions of items, it's not hard to rack up enough items to hit the $25 mark. Some items are not eligible; look for "FREE Shipping" messaging on the product detail page to see if your item qualifies. You can get free, one-day shipping with gift cards, but they don't apply to the $25 total, Amazon says. If you're just shy of $25, select a cheap, add-on item.
4. Get a Subscribe & Save Membership Shoppers who tend to buy the same things should look into a Subscribe & Save Membership. Although it does not cover everything on the site, members can save up to 15 percent on orders and receive free shipping on every Subscribe & Save order. Members must select eligible items, and choose a delivery schedule to subscribe. While it's not as expansive as an Amazon Prime membership, it is convenient and worth a look.
Alternatively, you can always find other ways to get free shipping on the web. FreeShipping.org has a continually updated database of thousands of free shipping coupon codes for a massive number of online stores. Browser add-ons such as PriceBlink.com, Coupons at Checkout, InvisibleHand and Honey will find coupon codes and discounts, many for free shipping, at thousands of online stores.
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|From: Sr K||9/19/2019 2:00:27 PM|
1:52 PM ET 09/19/2019
Amazon to Add 100,000 Electric Vehicles as Part of Climate Pledge
Amazon.com Inc. plans to buy 100,000 electric delivery trucks as it seeks to reduce its carbon emissions in the face of criticism of its environmental impact.
The order was part of a broader company pledge made by Chief Executive Jeff Bezos while speaking at the National Press Club in Washington D.C. Thursday. He said the company plans to be carbon neutral by 2040 and plans to meet the goals of the Parisclimate agreement 10 years early.
The e-commerce giant is ordering the electric vehicles from the suburban Detroit-based startup Rivian Automotive.
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|From: JakeStraw||9/20/2019 3:57:25 PM|
|AWS Announces General Availability of Amazon EC2 G4 Instances|
New accelerated computing instances feature NVIDIA T4 Tensor Core GPUs to provide the most cost-effective compute in the cloud for running machine learning inference and graphics-intensive applications
“We focus on solving the toughest challenges that hold our customers back from taking advantage of compute intensive applications,” said Matt Garman, Vice President, Compute Services, AWS. “AWS offers the most comprehensive portfolio to build, train, and deploy machine learning models powered by Amazon EC2’s broad selection of instance types optimized for different machine learning use cases. With new G4 instances, we’re making it more affordable to put machine learning in the hands of every developer. And with support for the latest video decode protocols, customers running graphics applications on G4 instances get superior graphics performance over G3 instances at the same cost.”
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|From: Sr K||9/20/2019 11:41:56 PM|
A ‘Grass Roots’ Campaign to Take Down Amazon Is Funded by Amazon’s Biggest Rivals
Walmart, Oracle and mall owner Simon Property Group are secret funders behind a nonprofit that has been highly critical of the e-commerce giant
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|From: Glenn Petersen||9/22/2019 4:04:57 PM|
|Report: Walmart and Oracle among secret funders behind ‘grassroots’ campaign to blast Amazon|
by Taylor Soper
on September 20, 2019 at 9:56 am
Peruse through the social media feed and website of the Free & Fair Markets Initiative, and it’s clear that the “nonprofit watchdog” has Amazon in its crosshairs.
What’s not so clear is that the so-called “grassroots” campaign has the financial support of Walmart, Oracle, and mall owner Simon Property Group — three of Amazon’s biggest rivals across industries such as retail and cloud computing.
The Wall Street Journal reported Friday morning that those three companies are secret funders behind the campaign, which has blasted Amazon’s business practices — including its treatment of warehouse workers; its use of personal data; its lack of support for local communities; and more — since launching last year.
“Concerned consumers, business owners and taxpayers are coming together to stand up to the harmful business practices of Amazon and demand that the company does its fair share in our local communities, for their employees and everyday Americans. The Free & Fair Markets Initiative is their unified voice,” reads the description of a YouTube video posted by the group.
Free & Fair Markets Initiative tweeted more than 300 times about Amazon’s HQ2 project, WSJ reported, and this week it called Amazon’s climate change announcement “nothing more than greenwashing.”
Free & Fair Markets has kept its funders secret and falsely claimed that average citizens support the group, the WSJ reported. It’s run by communications firm Marathon Strategies, which reportedly asked for $250,000 per company to fund the anti-Amazon campaign.
The story reflects the lengths that companies are willing to go to help curb Amazon’s market share. It’s also an example of mounting pressure on Amazon from similar groups and lawmakers who are questioning the company’s growing footprint and power.
A spokesperson for Oracle told the WSJ that it contributed to Free & Fair Markets. We’ve reached out to Amazon, Walmart, and Oracle for comment, and will update this story when we hear back. Update: An Amazon spokesperson said that the WSJ story “speaks for itself.” Amazon also provided this statement to the WSJ:
“The Free & Fair Markets Initiative appears to be little more than a well-oiled front group run by a high-priced public affairs firm and funded by self-interested parties with the sole objective of spreading misinformation about Amazon.”
And here’s a tweet from Jay Carney, Amazon’s senior vice president of global corporate affairs. Amazon CEO Jeff Bezos retweeted the tweet.
Taylor Soper is GeekWire's managing editor, responsible for coordinating the newsroom, planning coverage, and editing stories. A native of Portland, Ore., and graduate of the University of Washington, he was previously a GeekWire staff reporter, covering beats including startups and sports technology. Follow him @taylor_soper and email firstname.lastname@example.org.
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