Sep 19, 2019

The war on Amazon

Illustration: Sarah Grillo/Axios

For the last 2 years, Amazon has largely been a subplot in the global backlash against Big Tech, with much of the scrutiny on Facebook, Uber and Google — until now.

Why it matters: Amazon is one of the richest companies in history, and for decades, no amount of bad news has stuck to it. Now, an onslaught of regulatory investigations and critical coverage is putting the behemoth on the defensive.

The latest: Federal investigators are conducting an antitrust probe into Amazon, along with Google, Apple and Facebook — and small sellers who operate on the e-commerce giant's platform are lining up to speak to the Feds, says Chris McCabe, a former Amazon employee who now consults for brands.

  • "Sellers haven’t really had an outlet like the FTC before to approach with these concerns and complaints," he says.

And in just the last 4 weeks ...

  • An investigation by the Wall Street Journal uncovered over 4,000 items on Amazon's site that have been deemed unsafe by federal agencies. Amazon said it continually reviews the productson its site to make sure they are safe and comply with federal regulations.
  • The Journal also reported that Amazon changed its search algorithm to promote its own products.
  • A number of stories have shed light on the stressful, low-paying and physically taxing jobs inside Amazon's many warehouses. The company has started paying warehouse workers to tweet positive things, and it's leading members of Congress on tours around its facilities to rehabilitate its image.
  • The company grabbed headlines when it cut Prime free delivery to just one day, but that dizzying pace has implications for Amazon's contracted drivers and for the environment. Drivers have struck and injured or killed people while speeding to deliver packages on time, BuzzFeed reported. The investigation prompted 3 senators to urge CEO Jeff Bezos to keep a closer eye on Amazon's contractors.
    • An Amazon spokesperson told Axios, "Safety is and will remain Amazon’s top priority as evidenced by the vast percentage of deliveries that arrive on time and without incident."
  • Amazon is getting into trouble with publishers and brands. The company broke an embargo on Margaret Atwood's new novel due to a logistical error, then apologized. Birkenstock quit selling shoes on the platform after counterfeits surged.
  • And it's upsetting some customers. Hijacked product reviews on the site are tricking shoppers, per Consumer Reports. "We have guardrails in place to prevent products from being incorrectly grouped, either due to human error or abuse," a company spokesperson said.

The big picture: Amazon touches everything from retail to robotics to movie-making, but "the larger the company is and the more industries it's in, the more opportunities there are to screw up," says Ryan Hamilton, a professor at Emory University.

But, but, but: Amazon is resilient.

  • "Leaving Amazon requires a lot of sacrifice," Hamilton says. "To cancel Amazon Prime? That's a lifestyle change. You need to be really worked up to do that, and some people are. But most are like, 'Meh.'"

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