[HN Gopher] Amazon lied about using seller data, lawmakers say, ...
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Amazon lied about using seller data, lawmakers say, urging DOJ
investigation
Author : ProAm
Score : 236 points
Date : 2022-03-09 17:57 UTC (5 hours ago)
(HTM) web link (arstechnica.com)
(TXT) w3m dump (arstechnica.com)
| xutopia wrote:
| And they'll get a small fine that's the cost of business for
| them.
| saberworks wrote:
| Somewhat related: any time a business/person has access to data
| about a customer or their business, they're in a position of
| power and are able to use that data against the customer.
|
| When you apply to rent a house, you're required to provide pay
| stubs and salary information. The landlord can (does?) use this
| to know how much they can jack up your rent next lease term (my
| landlord raised our rent $800/month in January).
|
| Same with insurance salespeople, car salespeople, etc. Everyone
| who gets access to your financial data can use it against you.
|
| There should be a 3rd party involved -- they take your
| documentation and then report to the landlord/salesperson/etc. a
| simple "is the person qualified?" Yes or No. And then permanently
| destroy said documentation.
| [deleted]
| mabbo wrote:
| > "Amazon lied through a senior executive's sworn testimony that
| Amazon did not use any of the troves of data it had collected on
| its third-party sellers to compete with them,"
|
| It's time to set an example. This sworn testimony was knowingly
| false. So charge this Senior executive with lying to Congress and
| lay down the likelihood of prison time. Watch them flip on their
| other execs.
| mataug wrote:
| Agreed, amazon's executives are exteremly entitled, this is
| just one in series of examples where they think of themselves
| as untouchable. The executives need to be proved wrong about
| their untouchability.
| jjoonathan wrote:
| Agreed.
|
| Everyone suspected they were lying, but suspicion isn't proof.
| If proof has emerged, it's imperative to go hard enough to make
| up for the many times where conservative standards of proof let
| obvious lies slip through.
| [deleted]
| besus wrote:
| A quick bit of browsing the Amazon Basics line of products would
| certainly lead one to assume they had totally knocked off the 3rd
| party products they thought they could without getting major
| brand pushback.
| symlinkk wrote:
| I bought an Amazon basics monitor stand and it even had the
| branding of another company (Ergotron) printed on it.
| shampto3 wrote:
| I'm not sure about all Amazon Basics, but a few of the ones
| that I checked out were just third-party products that Amazon
| made deals with to slap their name on. Similar to how Costco's
| Kirkland brand is often the same as a popular brand but with a
| different label.
|
| For example, the Amazon Basics guitar pedals are created by Nux
| pedals (the PCBs even have Nux on them).
|
| So from what I can tell a lot of these are not ripoffs, just
| rebranded products. Amazon doesn't need to waste resources on
| manufacturing products that are already being sold on their
| site, but they can make deals with people that are already
| manufacturing those products.
| kodah wrote:
| > Yet as today's letter points out, subsequent investigations by
| The Wall Street Journal, Reuters, and The Markup revealed that
| not only did Amazon employees working on private-label items have
| access to third-party data, but they routinely used it, even
| discussing it openly in meetings. "Amazon employees regularly
| violated the policy--and senior officials knew it."
|
| That's pretty incredible. I'm curious what kind of data this is;
| knowing the nature of the data would help us understand how
| platform operators can abuse their position.
| victor106 wrote:
| Not by any means defending Amazon here, genuinely curious.
|
| How does this differ from say Walmart/Target/CVS etc.,
| launching their own private branded labels?
|
| Even they have access to all the data on the best selling
| products.
| mjamesaustin wrote:
| The difference is that Target is a retail store, not a
| marketplace. Target has already bought your products from you
| when _Target_ sells them to customers, and aggregates data
| about _its own_ sales of your products.
|
| Amazon is a marketplace, and pays nothing to buy your
| products when they're offered for sale on its virtual
| shelves. It purports to provide an open and equal common area
| for companies (including itself) to sell products, yet only
| Amazon has access to the treasure trove of data about the
| behavior of consumers on its site.
| c0nkflict5uxway wrote:
| Target is an online marketplace for 3rd-party products.
| They don't go out of their way to advertise it, but they
| call the program Target+. You can find online-only 3rd-
| party items by searching their website. They ship the items
| to you, and you can return them in-store if there's a
| problem. Most people never notice the middleman supplier.
|
| Walmart does this too. Newegg made the switch several years
| ago. Large retail outlets which do not have a "marketplace"
| online option are the exception rather than the rule.
|
| Different companies do different levels of vetting, but the
| retail ecosystem is vastly more accessible to small-timers
| than it was in the 2000s.
| granzymes wrote:
| > Target has already bought your products from you when
| Target sells them to customers
|
| This is not true for all products. Some are sold under a
| pay-per-scan model, where the product is owned by the
| supplier up until the barcode is scanned at checkout,
| whereupon it is immediately purchased by the store and sold
| to the consumer.
|
| For other products, suppliers may also be required to
| accept unsold goods for a full refund of the store's
| purchase price.
|
| Stores are marketplaces too, and shelf space - particularly
| the valuable shelf space like end caps - is not free.
| dahfizz wrote:
| The most salient difference, in my opinion, is that Amazon
| stood in front of Congress and lied about it.
|
| If they instead told Congress that this is a long established
| retail practice, I would be more sympathetic to that
| argument.
| jeromegv wrote:
| Beside the fact that they lied to Congress about.. I guess
| there is an expectation.
|
| If you put your products on Amazon marketplace, you are
| expected to join a marketplace. You don't necessarily expect
| for Amazon to also join the marketplace by using your data to
| compete against you.
|
| Also you can use Amazon services and warehouses even for
| products that you do not wish to sell on Amazon website.
| Essentially using Amazon as a 3PL service. Again, you might
| not expect Amazon to use your data for their own products.
|
| If you sell your products to Target, this isn't exactly a
| marketplace. This is a retail outlet. You know they can
| measure your sales, measure your competitor sales, etc. And
| you know they won't lie to you about doing it.
| kornhole wrote:
| If you still have an Amazon account, ask for your data download
| from Amazon.com. You will probably be astounded to see that
| they retain just about every interaction you have ever had on
| their platform and products. I was a light user and received 88
| zip files containing many files within them containing IP
| addresses, devices, and the most minute details. Now imagine
| how much they collect about sellers and products. You can
| assume it is everything they can collect.
| jka wrote:
| It's been a long time since some of the congressional hearings
| about anti-competitive practices in the software industry, and
| I'm afraid I'm too tired to look up the details at the moment,
| but one of the items I remember from the discussion was that
| Amazon sales employees were allowed by company policy to look
| at aggregated figures (per-market, per-industry, etc) for
| merchants on their platform.
|
| That's fine as-is -- nothing wrong with that in principle --
| but what I seem to recall employees began doing (and I can
| totally imagine how this would become an underground "sneaky
| trick" that employees would begin to learn and share with each
| other) was to create so-called aggregate groups that only
| contained a very small number of merchant businesses.
|
| That way they could claim (and perhaps keep a straight face
| when saying) that they were only looking at aggregate group-
| level figures, but the statistical reality of the situation
| would have been that they were looking at information about a
| few -- or perhaps even only one -- business.
| orev wrote:
| It's data on what products are selling well, which they use to
| create clones and then sell under "Amazon Basics" and other
| brands.
|
| It's a problem because the small sellers take the financial
| risk trying to sell a new product, then when Amazon sees it's
| doing well they make the clone and get the profits.
| mabbo wrote:
| Consider: you are on the Amazon Basics product development
| team. If you do well, you will be promoted, given bonuses, and
| greatly financially rewarded. If you do poorly, well, Amazon
| let's go of 6% of employees in every org every year[0].
|
| There are policies in place saying that you definitely can't
| look at the data around which third party sellers are doing
| well, selling lots of stuff. But also there's no auditing in
| place to see if you check it or not. It's all a big data
| warehouse and you have access to it.
|
| And hey, you've heard everyone else is looking at this data.
| You're just taking a quick look to get ideas do you don't get
| fired. What's the harm? You'll help the company do well and
| won't have to polish your resume.
|
| [0] https://www.businessinsider.com/amazon-performance-
| review-6-...
| MegaButts wrote:
| Consider: not working for an unethical company.
|
| PMs at Amazon, even people who need visa sponsorships, have
| options (and probably better options). Don't defend their
| poor choices. Engineers at Amazon have even more options.
| kittiepryde wrote:
| Capitalism (Society?) rewards unethical behaviors, as long
| as it's even just a little obfuscated. It's a competition
| for resources.
| nickff wrote:
| There are always rewards for unethical behaviors, which
| is why people engage in them. This is true whether the
| framework is communism, capitalism, or marriage.
| jjoonathan wrote:
| Competition encourages the unethical behaviors and
| punishes the ethical behaviors. Set the competition knob
| to 0, everyone slacks, crank it to 11, and everyone
| cheats.
|
| Despite the fact that managing this balance is
| fundamental to a capitalist society, it's extremely
| typical for the latter half of this balance to be
| ignored, for competition to be framed as an unmitigated
| positive, and for the Goodhart's Law side of it to be
| completely swept under the rug.
|
| Culpability should be attributed both to the individual
| _and to the system_. Otherwise it 's easy to construct
| systems that bypass responsibility. Like we see here.
| nickff wrote:
| Every communist state has been rife with communism.
| Centralization is what increases the reward to
| corruption.
| jjoonathan wrote:
| If you don't follow the perverse incentive du jour in a
| decentralized system, you'll get rolled.
|
| We're drifting off topic, though. If Amazon heavily
| incentivizes bad behavior, should they be allowed to reap
| the rewards and discharge the blame? Absolutely not.
| They're culpable.
| [deleted]
| loeg wrote:
| Shareholders don't seem too worried about this.
| nebula8804 wrote:
| So I am a bit confused. How does this differ from in store brands
| like Bowl & Basket (Shoprite) or Good & Gather(Target)? Haven't
| those in-store brands been going on for years and years selling
| clones and commodities?
| philistine wrote:
| The difference is Amazon knowingly lied to Congress. Shoprite
| and Target did not.
| jcranberry wrote:
| That seems like it would be incredibly stupid and have little
| upside.
| megaman821 wrote:
| It seems more likely that Amazon would just purchase this data
| from Nielsen or IRI. The data would be nearly as good for the
| Amazon Brand teams, without the moral hazard of looking at
| private seller data. It may seem weird to purchase data on your
| own storefront, but it protects you from situations like this.
| arrosenberg wrote:
| Yeah, the third-party sellers know that. That's what they've been
| screaming about for a decade while being squeezed out of the
| market. Now let's see if we're willing to prosecute white collar
| crime against regular people for once.
| quxpar wrote:
| Why would this case be the exception?
| f1refly wrote:
| Considering this is an indictment in america against a
| monopolistic company: Nothing will happen, amazon will continue
| printing money and the small guys can whine all they want.
| Animats wrote:
| When will Amazon executives be arrested?
|
| The way to deal with this is to arrest a whole group of Amazon
| execs, and offer the usual deal - the first one to make a full
| confession and implicate others gets off, the others get
| prosecuted. This is official DOJ policy.[1]
|
| [1] https://www.jdsupra.com/legalnews/sometimes-confession-is-
| go...
| chagaif wrote:
| Aren't they more afraid of violence and threats from the other
| execs? I would think that some violent threats are not off the
| table when there's so much on the line (jail time) and so much
| money involved.
| 88840-8855 wrote:
| I agree.
| nathanyz wrote:
| Agreed, nothing sort of holding executives accountable with
| actual threat of prison time fixes this. Fines don't matter
| once you are the winner in the market. Have to set an example
| and stop individuals from feeling safe when lying for
| companies.
| nickff wrote:
| Fines against individuals, with a prohibition on further
| compensation/employment by the company/organization would
| likely be sufficient to discourage this behavior. There is
| widespread disagreement as to whether prison should be used
| as a punitive tool, and it would serve no other purpose in a
| case like this.
|
| Corporate fines seem ineffective and almost useless ,
| especially because these sorts of actions will often benefit
| the individuals undertaking them (principal agent problem). I
| suspect the motivation behind corporate fines is that they
| can be large monetary amounts, and look good for the
| investigator/agent/attorney.
| onemoresoop wrote:
| They could game that and take turns when they want to
| retire. Fines are not enough. Prison time would make a
| better deterrent.
| nickff wrote:
| Paying a huge fine will likely disrupt a retirement plan.
| [deleted]
| trillic wrote:
| Not if the company pays it.
| nickff wrote:
| > _" Not if the company pays it. "_
|
| That's why I included the "... prohibition on further
| compensation/employment by the company/organization...".
| [deleted]
| onion2k wrote:
| I can think of something that would work. If Amazon is found
| guilty of abusing it's the data it's trusted witb, for
| anything, the entire company should be banned from doing
| business with the government. No government purchases of
| goods, no services hosted on AWS, no logistics provided by
| Amazon's last mile services, etc. If Amazon are shown to be
| abusing data then they shouldn't be allowed to have any
| public data.
|
| Maybe even extend that to all government suppliers...
| deutschew wrote:
| Not when there are political ramifications to the beneficiaries
| of Amazon's generous "donations"
| encryptluks2 wrote:
| Isn't that considered illegal as well, to arrest people without
| enough evidence and then demand they admit guilt to be
| released? I can see how this would hurt a case more than it
| would help one. Imagine if there is a jury trial and it comes
| out that people were forced to make confessions under duress.
| ruined wrote:
| you only need evidence at trial. cops and prosecutors coerce
| people into pleading guilty without any evidence every day.
| [deleted]
| dragonwriter wrote:
| > you only need evidence at trial.
|
| False.
|
| > before then, cops and the prosecutor only need "probable
| cause" which is typically understood to allow that evidence
| may be gathered later.
|
| No, it isn't; probable cause must be based in evidence. For
| cases requiring indictment, this evidence is presented to a
| grand jury before charges can formally be filed; for cases
| where the conditions allowing warrantless arrest do not
| apply, it occurs in the presentation of evidence to support
| an arrest warrant; for other cases the evaluation (by
| hearing or otherwise) happens generally within 48 hours of
| arrest, and delay to gather evidence has specifically been
| ruled unconstitutional.
| ruined wrote:
| ah, you sniped my edit.
|
| there are a _lot_ of details that vary state by state,
| but i 'll say that not all charges require a grand jury,
| and 48 hours is clearly "later"
| Animats wrote:
| It's not hard to show probable cause. The issue in most
| corporate crime is not "did it happen", but "who knew
| about it" and "who authorized it". Prosecutors, to get an
| indictment, only have to show it happened, and that the
| people being prosecuted probably knew what was going on,
| or should have known. Sorting out exactly who said and
| did what when when comes out later.
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