Consumers, businesses and politicians should be alert, but fortunately the giant is late on the scene, as there are moany alternatives
25 years ago, I was in Seattle to interview and profile a three-year-old start-up. It was behind an anonymous facade and you almost had to back into the reception. There was a real entrepreneurial vibe and the company was growing rapidly. However, the CEO had stopped packing books himself in his private garage and bringing them to the post office, because the start-up with the unusual name Amazon had already become the third largest bookseller in the US, while selling books to a total of 160 countries.
I described how revolutionary Amazon was in that you could get personalised offers (that was actually Amazon’s invention), how you could choose between different wrapping paper, if it was for a gift, and how Amazon was already using co-creation to get internet users writing books together. However, the founder Jeff Bezos lived in a rented house, drove a small Honda, and the company suffered huge losses.
Today we are talking about one of the world’s largest companies and the world’s second-richest man. Amazon still sells books, but there is almost nothing Amazon does not sell. It is the world’s largest department store – including physical stores – and it has monopoly status in the United States. It is the world’s largest cloud provider with Amazon Web Services. And Amazon is close to outperforming Netflix on the streaming front.
So this week Amazon turned up the streaming signal in Denmark, so we should all be alert. The powerful company is known for its bullying tactics and for receiving unparalleled advantages. For example, in 2019 the giant had to pull out of New York, where it had plans to build a new headquarters and create a lot of jobs, according to the company. But it faced massive and aggressive opposition from local politicians, unions, and ordinary citizens, who had had enough of Amazon’s ability to score huge government subsidies and avoid paying taxes. On the tax front, Amazon complains in advance about the new Danish cultural contribution of 6% of Danish turnover and threatens that it will lead to less investment in Denmark.
Trade unions, including in Germany where Amazon has large warehouses, have been trying for years to get Amazon to treat its employees decently, but the giant is accused time and again of preying on employees who do not even have time to go to the toilet. At the same time, spies have been hired among employees to ensure that no one forms unions.
Amazon is probably the most data-hungry company in the world. Its products are so cheap that few can say no, but that’s because part of the price is data.
For businesses, Amazon’s data power is deeply serious. On Amazon’s digital commerce platform, other companies sell their services, but Amazon holds all the data on sales and purchases and shares it only sparingly with the companies that otherwise help to generate them. Amazon itself also sells products on the platform and can therefore outcompete the others because of its vast knowledge. Last month, the state of California sued Amazon for undercutting its competitors on its own platform. Other states and the EU in particular have long been after Amazon for breaching competition laws. Amazon can also use the wealth of data to keep an eye on start-ups it can buy up before they become too expensive.
When it comes to consumers, Amazon is also a data vampire. It has launched most ‘Internet of Things’ products – so-called ‘smart’ speakers, doorbells, TVs, chatbots, keys, etc – and can thus harvest data directly in many homes. The Washington Post – which is owned by Jeff Bezos – recently warned about just that.
When it comes to Denmark and streaming, Amazon is, fortunately, arriving late to the party. There are plenty of streaming services to choose from, so – with the above in mind – it’s relatively easy to avoid putting your money and data there.
Translated with www.DeepL.com/Translator (free version)
This was first published in Danish in the national daily Politiken
Illustration: ‘Amazon Bezos Data Vampire’ according to Dall-E