with Tonya Riley
Amazon’s business is booming amid the novel coronavirus pandemic. But it’s still a political target in Washington.
One of the top tech industry critics in Congress is now calling for the Justice Department to open a new, criminal antitrust investigation of the e-commerce juggernaut. Sen. Josh Hawley (R-Mo.) said recent reports indicate the company “has engaged in predatory and exclusionary data practices to build and maintain a monopoly.” His letter, addressed to Attorney General William Barr, cites the Wall Street Journal’s reporting that Amazon employees used data from third-party sellers to develop competing products.
He said government action is even more urgent because of the virus.
“Thousands of small businesses have been forced to suspend in-store retail and instead rely on Amazon because of shutdowns related to the coronavirus pandemic,” Hawley said. “Amazon’s reported data practices are an existential threat that may prevent these businesses from ever recovering.”
The backlash from Hawley stands in stark contrast to the company’s goodwill tour.
Amazon has been trumpeting the many new jobs it’s creating during the pandemic and its role in delivering essential items. The company’s stock climbed to a record high in recent weeks as its e-commerce business appears to not just be immune to the pandemic but benefiting from it. As the country grapples with a record-setting surge in unemployment, the company has announced plans to hire 175,000 new employees, mostly in jobs in its warehouses. Meanwhile, the pandemic dealt a blow to brick-and-mortar retailers, as companies such as Macy’s furlough thousands, as Elizabeth Dwoskin reported.
“There are really two Americas right now,” said Scott Galloway, a marketing professor at the New York University Stern School of Business, told Elizabeth. “There is Big Tech and there is everyone else. They can do what very few companies can do, which is play offense in the middle of a pandemic.”
(Amazon chief executive Jeff Bezos owns The Washington Post.)
Amazon has pushed back on the notion the pandemic could make it even stronger as other companies falter. Amazon spokesman Dan Perlet told Elizabeth in a statement, “While we appreciate the opportunity as a retailer to serve customers and are seeing increased demand for essential products, there are no winners out of Covid-19.”
Amazon did not immediately respond to request for comment about Hawley’s letter, but the company told the Wall Street Journal it has launched an internal investigation into how its employees were using seller data.
Yet the health crisis is exacerbating long-running sore spots for the company in Washington. Amazon’s recent success could raise new questions about its power.
The Federal Trade Commission was already reportedly scrutinizing the company, interviewing sellers about its data practices. Amazon is also part of the House antitrust subcommittee’s investigation of the tech industry, as well DOJ's broad review of large tech companies. Amazon, however, has not disclosed formal investigative inquiries from DOJ or FTC as have Facebook and Alphabet.
Those investigations are slowed for now, Elizabeth reports.
But some of the trends that prompted them could be accelerated as many pandemic sellers become even more dependent on Amazon’s channels.
ProPublica reported many suppliers are favoring Amazon over other retailers out of fear the company’s algorithms will bury them in rankings if they have product shortages at a time when such vendors are more reliant on e-commerce. Amazon spokeswoman Jodi Seth says the ProPublica report is based on “temporary changes” made in light of covid-19.
“It shouldn’t be surprising to anyone that, by definition, products need to be in stock to be on a current best sellers list, and that sellers will prioritize sending stock to retailers where they are out of stock,” she said. “These temporary changes were in no way designed to advantage any particular Amazon brand, retail vendor or seller—they were based on how to best serve customers during the outbreak while helping ensure the health and safety of our employees.”
President Trump’s long-running feud with the company has also persisted.
The administration has weighed tough terms on an emergency coronavirus loan to the U.S. Postal Service in an effort to change charges for delivering packages, Jacob Bogage and Lisa Rein report. A potential price hike on package deliveries – USPS’s sole area of profitability in recent years – could hit Amazon and other Internet companies that Trump argues are exploiting the service.
Trump recently suggested to reporters that USPS loses money on every package they deliver for Amazon — a claim The Post's fact checker has given four Pinocchios.
Trump has also conspicuously omitted mention of Amazon at many White House coronavirus task force briefings — even when praising actions by other tech company chiefs or hosting major retail executives. Bezos, however, is a member of the administration’s Great American Economic Revival Industry Groups retail task force.
The virus is also renewing concerns among regulators about the company’s treatment of warehouse workers.
The New York state attorney general’s office says Amazon may have violated safety standards by taking “inadequate” steps to protect warehouse workers in the state amid the pandemic, NPR reported last night.
The office says the company may have run afoul of the state’s whistleblower laws for dismissing a warehouse worker who helped lead a protest in a Staten Island facility, according to a letter to Amazon obtained by NPR. The worker, Christian Smalls, called to close the plant after several workers there contracted the coronavirus. Employees have fallen sick at Amazon warehouses around the world, and they have complained Amazon is not offering them proper protective gear.
“While we continue to investigate, the information so far available to us raises concerns that Amazon’s health and safety measures taken in response to the COVID-19 pandemic are so inadequate that they may violate several provisions of the Occupational Safety and Health Act,” as well as other federal and state guidelines, Letitia James’s staff wrote in the letter.
Five Democratic lawmakers also recently pressed Bezos on the company’s decision to fire Smalls.
Amazon has said Smalls was fired for putting other workers at risk by coming to the warehouse after coming in contact with another employee who tested positive for the coronavirus. The company has also said it’s taking measures to keep staff safe, such as enforcing social distancing and supplying masks to U.S. and European workers.
Our top tabs
Surveillance technology could help Americans get back to work. But it's untested and raises privacy concerns.
Businesses, schools and other venues that attract large crowds are embracing surveillance systems, including fever-screening stations and Bluetooth-enabled social distancing detectors, Drew Harwell reports.
So far federal regulators haven't put limits on the technologies. Last month, the Equal Employment Opportunity Commission loosened rules to allow employers to take workers' temperatures and even reject coronavirus-positive applicants. And Food and Drug Administration guidelines that suggest temperature-scanning cameras should be used alongside clinical-grade thermometers aren't legally binding.
That could set a new norm as more workplaces and businesses such as hotels and grocery stores adopt thermal cameras that have yet to be backed by significant research.
Tech companies behind the new field of products say their work is crucial to reopening the economy, however.
“We feel like this AI can help bring things back to normalcy,” said Daniel Putterman, co-chief of thermal surveillance company Kogniz. “I don’t believe body temperature is a piece of private information anymore.”
The government website responsible for doling out a new round of small-business loans crashed yesterday.
The glitch left thousands of small businesses wondering if they will get access to the additional $484 billion in Paycheck Protection Program funding that Congress passed last week, Aaron Gregg, Renae Merle and Ben Golliver report.
Bankers who worked through the weekend to prepare applications for clients expressed their fury online. Cynthia Blankenship, corporate president of Bank of the West, a small community lender in Texas:
Trying to do hundreds of PPP loans and Etran immediately crashed! So frustrating not to have access funding for so many small businesses! @BankoftheWestTX @JohnCornyn @michaelcburgess @RepKenMarchant @ICBA @FDIC @myibat @realDonaldTrump @stevenmnuchin1 #SmallBusiness @SBAgov— Cynthia Blankenship (@cblankbow) April 27, 2020
Rob Nichols, CEO and president of the American Bankers Association, said his trade group's members voiced concerns to the agency:
Our member banks across the country are deeply frustrated at their inability to access @SBAGov's E-Tran system. We have raised these issues at the highest levels. Until they are resolved, #AmericasBanks will not be able help more struggling small businesses.— Rob Nichols (@BankersPrez) April 27, 2020
Tab Bank in Utah said on Monday it had been able to push only five of more than 1,200 applications through the online system before it crashed.
“I have been sitting here, watching my screen, refreshing for three hours,” Curt Queyrouze, the bank’s chief executive, told The Post. “The entire time we’ve been talking, it’s said ‘load.’ ”
Tab Bank processed only 90 applications before the initial $349 billion in small-business coronavirus relief funding ran out. Congress passed an additional $310 billion in funding last week. Some big businesses criticized for exhausting the initial fund, including Shake Shack and the Los Angeles Lakers, have returned their loans.
The Small Businesses Administration warned businesses that system problems could occur, media director Carol Wilkerson said.
“SBA notified lenders yesterday that pacing of applications into the E-Tran system would occur, meaning all lenders would be able to submit at the same rate per hour,” Wilkerson said.
Verizon, AT&T and Comcast extended their promise to not shut off service or charge late fees through June 30.
The companies first agreed to the pause in March after the Federal Communications Commission urged providers to keep Americans online during the pandemic, David Shepardson at Reuters reports. Comcast also promised to extend unlimited data for no additional charge.
Other companies are expected to follow suit this week in announcing that they will extend their programs past the end of the school year, Reuters reports.
Despite increased demand from more Americans staying at home, telecom companies have reported that networks are holding up well — a claim that has been echoed by President Trump and some FCC officials.
Inside the industry
Some venture capitalists are criticizing start-ups for taking small-business coronavirus relief funds.
Many of the start-ups, already backed with millions in funding, are using the money to extend their cash on hand rather than keep employees, Erin Griffith and David McCabe at the New York Times report.
“We just think those companies ought to not get in line in front of Main Street businesses,” said Albert Weng, an investor at Union Square Ventures who is part of a small chorus of VCs urging start-ups not to grab the cash.
But others in the industry say start-ups are just as entitled to the assistance, regardless of their backing.
“These are potentially some of the most important companies for America’s future competitiveness,” said Justin Field, the senior vice president of government affairs at the National Venture Capital Association, a lobbying group.
More from the industry:
Britain's National Health Service will eschew the contact tracing technology that Apple and Google are rolling out and launch its own software.
The government-designed app will match contacts on a centralized computer and then send alerts to individuals, Leo Kelion at BBC News reports.
Tech giants have said their approach better secures users' personal information, but global governments have been skeptical of their promises. The approach puts the United Kingdom at odds with a number of other allies including Germany and Switzerland that are moving forward using Google and Apple tools.
Amazon reinstated a worker at its Shakopee, Minn., fulfillment center after more than 50 workers staged a walkout Sunday.
The worker alleges she was fired for staying home to protect her two children, an action that would have been covered by unlimited paid leave extended by the company during the pandemic, Lauren Kaori Gurley at Vice reports. (That policy will terminate on May 1.)
Amazon wouldn't confirm whether the worker had been fired and accused the workers of “spreading misinformation” without elaborating. Amazon has also terminated other Shakopee and Staten Island warehouse workers involved in protests of working conditions, though the company denies the terminations were protest-related.
- Google will announce earnings today.
- Facebook and Microsoft will announce earnings on Wednesday
- Apple, Amazon and Twitter will announce earnings on Thursday
Rant and rave
Zoom's rivals have found a new arena for competition. CNBC's Jordan Novet:
what's next, a Microsoft Teams wedding? https://t.co/TgTfh3WqWI— Jordan Novet (@jordannovet) April 27, 2020
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