The brain-splitting moment happened about a week ago. A video (watermarked with the logo of a camera from Ring, an Amazon company) showing a man delivering an Amazon package, finding a box of snacks on a porch, then dancing went viral. My mind failed to find joy in the moment.
Think of the moving parts. There’s a hungry and dehydrated Amazon employee—or, more likely, an Amazon contractor—finding a slight reprieve from his gruelling job only to see that moment turned into some weird viral ad. There’s a Ring security camera, made by Amazon, watching what this Amazon employee or anyone else in the neighbourhood is doing and potentially sharing that video feed with the local police department.
There’s the knowledge that Amazon and Ring have used police partnerships to bait potential package thieves in what could be described as a marketing campaign for a privately run state-sponsored surveillance effort.
Ten years ago, this situation would have sounded perverse to me. Although Amazon was a much smaller company back then, you might argue that 2010 was a powder keg moment for Amazon. Sales were up 40 per cent year-over-year. The company launched Amazon Studios. Amazon’s stock price was about to skyrocket. In fact, if you’d invested in Amazon a decade ago, you’d be looking at a total return of 1,232 per cent in December 2019.
Those milestones might only look extraordinary in retrospect, however, knowing that Amazon has become much more than a successful business. The rest of Amazon’s decade was one big hit, one big acquisition, one big record after the other. As the next decade arrives, it’s obvious that Amazon founder and chief Jeff Bezos has built some sort of grotesque post-capitalistic empire that makes Standard Oil look like a local firewood stand. Not only does Amazon dictate the future of retail in the United States and around the world; its sprawling cloud computing business all but ensures that, on any given day, you can’t use the internet without putting a penny in Bezos’s bank account.
What’s one to do when staring into the depths of dystopia? In this particular instance, maybe stop buying shit on Amazon—that’s what I’ve been trying to do. (There’s nothing like a good old fashioned boycott to take on our 21st-century tycoons.) But pushing back against the empire Bezos built is not as simple as no longer shopping at this everything store. I’m afraid it might already be too late to stop Amazon.
Think about your life at the end of the last decade. Think about how you bought stuff and survived. Chances are, when you bought stuff on Amazon, you paid for shipping and waited and ultimately wondered if maybe going to the store would have been more convenient. Chances are you couldn’t imagine that Amazon would have microphones installed in scores of millions of homes in the near future or that Amazon Prime would be a ticket to cheaper groceries at Whole Foods. Chances are you didn’t worry about Amazon building a privately owned surveillance state.
But let’s just try to walk through history. In 2010, things were quite different for Amazon customers. At the time, to most people, Amazon was still just an online retailer and not necessarily an essential one. Amazon Prime was also on the fringes. Although the program had been around since 2005, the free two-day shipping benefits were still limited to certain items, and additional benefits like Amazon Prime Video were in their infancy. Yet, by participating in this strange Amazon fan club, being a Prime Member must have felt edgy and unlikely. The dues—$US80 ($117) a year in 2010—must have seemed like a bargain. Few could have believed that the subscription model would catapult Amazon into its current sphere of power.
It’s hard to imagine Amazon’s current dominance without the success of Prime. In terms of sheer size, Amazon’s market cap has grown from around $US60 ($88) billion a decade ago to a high of over $US970 ($1,417) billion this year, a period in which Amazon Prime membership has skyrocketed. The service now has well over 100 million subscribers. In the United States, a standard Amazon Prime membership costs $US120 ($175) a year, which breaks down to $US10 ($15) a month. It’s a no-brainer for plenty of people. As I explained in a hand-wringing post last year, though, paying for Amazon Prime also tends to encourage you to buy more stuff on Amazon. If you really think about it, Amazon Prime is just a 21st-century Sam’s Club. Pay a membership fee for some discounts, and the next thing you know, you’re taking home gallon-sized jars of peanut butter because they were a great deal. It’s a successful model. And it’s also built on the backs of gig workers who often receive crappy pay and no benefits to pack and deliver your purchases as quickly as possible.
I’d argue that Amazon Prime amounts to more than some twisted discount club, though. By becoming a Prime member, customers are self-identifying as Amazon enthusiasts, the most loyal customers who like to buy whatever the company is selling. In recent years, that’s included not only books or merchandise but also fancy groceries, voice-controlled gadgets, and home security systems. All of those new product categories also give Amazon ample opportunity to collect more data on its customers. If you’re a Prime Member who shops at Whole Foods, asks Alexa about the weather, and uses a Ring security camera, Amazon potentially knows what you eat, when you’re sad, and how often you walk around the house naked.
Few people would look at this online bookseller 20 years ago and anticipated that it would lead the way in crafting a privately owned surveillance state. Practically nobody could have predicted that, by the 2010s, Amazon would be not only selling unsuspecting gadget enthusiasts smart speakers that double as wire-tapping devices but also partnering with police departments to offer them easy access to private home security cameras sold by their company. Yet, both of those things came true. Alexa is widely regarded by privacy advocates as severely problematic surveillance tools. Meanwhile, Amazon-owned Ring and its companion neighbourhood-watch app Neighbours are increasingly criticised for teaming up with 700 police departments nationwide and helping to turn Ring users into crime-fighters. Those police partners can use a dedicated portal to request home security footage from users, and in return, many of them help sell more Ring cameras.
This Alexa and Ring data-gathering stuff is scary and, in retrospect, feels slightly unexpected. But the current impact of data collection in those products pales in comparison to how Amazon’s primary businesses, retail and cloud-computing, are reshaping the global economy. Once you zoom out from the individual user experience, it’s downright terrifying to realise how powerful Amazon might become in the next ten years.
It’s no surprise the online store that became an online megastore knows a lot about what we buy. This kind of data is very handy for helping Amazon’s algorithms to suggest what we should buy next. According to some, however, Amazon is abusing its access to customer data and moving towards becoming a huge all-powerful retail monopoly. The complete picture of Amazon’s dominance might even be more powerful than that.
Critics say that Amazon uses its vast stores of customer data to copy popular companies’ products and then, though its own private labels, give Amazon-owned products preference in the company’s search results as well as its powerful recommendation engine. In other words, antitrust officials with the Federal Trade Commission (FTC) has been investigating Amazon for anti-competitive behaviour for months now, although the agency hasn’t revealed many details about its sweeping probe. We won’t know what the FTC might do if it does find that Amazon is hurting competition.
Earlier this year, the agency hit Facebook with a record $US5 ($7) billion fine for violating consumers’ privacy. Some prominent politicians, like presidential hopeful Elizabeth Warren, are calling to break up Amazon and other tech giants, including Facebook, Apple, and Google.
Who knows how likely a big breakup really is, though. Amazon, after all, has become one of the most powerful players in Washington in recent years. The company has increased its spending on lobbying exponentially since the start of the decade and now employees over 100 lobbyists across the nation’s capital to work on its various interests. (Jeff Bezos also spent $US250 ($365) million from his own fortune to buy The Washington Post, but that’s kind of beside the point.)
Amazon is also chin-deep in lucrative government contracts and could earn nearly $US5 ($7) billion from Amazon Web Services cloud computing contracts this year alone. It’s surely no mistake that Amazon picked northern Virginia as the home of its second headquarters last month. That’s where a lot of government contracts get negotiated.
If it even seemed possible that the government would try to break up Amazon, Jeff Bezos might make the first move and split up the company on his own terms. Some think that Bezos could easily spin off Amazon’s retail business from the increasingly popular Amazon Web Services (AWS). The latter business launched nearly 20 years ago, after Amazon realised it could make extra money selling cloud computing services based on the data centre infrastructure it had built for its core retail business.
Nowadays, the lion’s share of Amazon profits come from AWS, which has become the world’s largest cloud computing service provider. That also means that, nowadays, it’s virtually impossible to use the internet without accessing Amazon’s servers. So naturally, it would make a splash with regulators if Bezos turned Amazon and AWS into two separate companies—perhaps a big enough splash to drown out their antitrust concerns.
Those concerns are bound to evolve. For instance, the FTC started investigating the Amazon marketplace for anti-competitive behaviour earlier this year, and then earlier this month, the probe expanded to include AWS. Since current interpretations of antitrust law hinge upon whether customers are harmed due to predatory pricing, it’s hard to know what exactly the FTC is trying to figure out.
Consumer harm is difficult to define. Consider Amazon’s growing list of private labels, of which there are dozens selling everything from engine oil to furniture. Third-party sellers have complained that Amazon not only monitors customer buying data to track trending products but also makes its own versions of popular products to sell through its own brands. This sounds anti-competitive, but because Amazon is so damned big and antitrust laws vague, the company has so far found a way to push back against accusations of monopolistic behaviour.
Amazon’s share of the e-commerce market, according to one research firm, is nearly 40 per cent. That is significant. Amazon’s PR team would likely point to statistics that Amazon controls a much smaller percentage of total retail in the United States. A more troubling trend, however, is how Amazon has historically entered new markets, only to dominate them within a few years.
Amazon launched AWS in 2006 and by 2018, its market share dwarfed seasoned competitors like Microsoft and Google. Amazon launched the Kindle in 2007 and by 2018, Amazon commanded 84 per cent of the e-reader market and close to 90 per cent of the e-book market. Amazon acquired Zappos in 2009 and by 2018, it was the biggest online seller of shoes and apparel by far.
Does this dominance harm people? Amazon’s dominance certainly limits choice, especially when it comes to shopping online, so that’s bound to hurt consumers in the long run. Amazon’s aggressive logistics goals, like its recent pledge to make free one-day shipping the default for Prime members, might please Prime members, but it’s undoubtedly ruthless toward Amazon workers and contractors.
The scale and growth of AWS is impressive, although one could easily imagine what a disaster it would be if the platform ever failed. And the Ring network—this is the one I keep thinking about—some Ring owners might feel safer knowing that the cops might catch a bad guy using their security camera. They might feel differently if their camera gets hacked or police abuse its access to this giant privately owned surveillance system.
Of course, some of these doomsday scenarios are hypothetical. Most of them aren’t. Amazon’s mistreatment of workers is well documented, and we saw just last year that a single AWS outage in Virginia wreaked havoc across the internet. I sure hope we never see the damage that Ring’s creepy neighbourhood watch campaign can do, but it feels inevitable.
Amazon is inevitable. Even in the event of a big breakup, the company isn’t going to stop dominating the marketplace any time soon, if only because it’s got such a commanding lead.
The logistics operation alone seems impossible to beat. There are 175 Amazon fulfillment centres around the world that encompass 150 million square feet of space for storing and shipping products.
Amazon is expanding its fleet of planes and trucks, and an army of individual Amazon Flex drivers cover the last mile, paying for their own vehicles and fuel as Amazon’s surveillance of their work becomes increasingly Orwellian. Meanwhile, Amazon has a habit of barring sellers from using competing logistics solutions like FedEx.
There is a glimmer of hope that hardy competitors will innovate their way out of Amazon’s shadow. As a growing number of business owners complain about the many downsides of selling on Amazon—fees are high, counterfeiters run rampant, and so forth—alternative e-commerce platforms are swooping in to fill demand. Entrepreneurs can easily set up their own stores on platforms like Shopify, Wix, and Squarespace in order to avoid going through Amazon.
Some big brands are also choosing to go it alone. Nike recently announced that it would no longer sell its products through Amazon, though it would continue to use AWS to power its apps and website.
Even if these efforts to resist Amazon’s continual rise succeed, it’s hard to imagine a near future in which the company declines. The next ten years might not represent the same sort of metastatic takeover that Amazon accomplished in the 2010s, but Amazon’s influence will surely continue to spread.
There are somethings you can do to escape Amazon’s reach. You can look to the government for tougher regulations on Amazon or just a general crackdown on monopolistic tech companies. You can change your own buying habits—read: you can quit buying shit on Amazon—although you most definitely can’t avoid using AWS if you like using the internet.
You can avoid the scary Amazon-owned surveillance products like Alexa and Ring. You could even find an old nuclear fallout shelter and live there for the next decade, eating beans out of cans and reading pulp fiction.
You can’t stop Amazon alone. Unless your name is Jeff Bezos, and you might find it in your heart to be less relentless. Did you know that Bezos originally wanted to name his company “Relentless” instead of Amazon. If you type relentless.com into your browser, it will actually redirect you to Amazon. The inside joke feels pretty dark when you realise how true it’s become.