When the Numbers Don’t Add Up, Everything Counts
Posted at 8:00h, 25 Jul 2017 in Amazon by Bonnie Halper No Comments 135 Likes Share

Should America’s Tech Giants Be Broken Up?, Bloomberg asks. Apple, Amazon, Google, and Facebook may be contributing to the U.S. economy’s most persistent ailments.

The word ‘anti-trust’ has been brought up frequently as of late, and in the age of online, it’s not simply about the detriment to consumers. In this age of globalization – and the tech behemoths, including Amazon, Google and Facebook, do have an undeniable global reach – it’s also about destabilizing the world economy. After just two decades, Jeff Bezos is on the brink of displacing Bill Gates as the world’s wealthiest person.

While we’re well aware of the fact that things tend to happen more quickly in internet time, at this juncture in our history, it’s not about the time, it’s about the repercussions.

Amazon: The Past 30 Days Alone

In this past month alone:

  1. Amazon announced that they will sell Sears brand Kenmore appliances (Sign of surrender? Sears agrees to sell Kenmore brand on Amazon.com), and Sears, who had been suffering financial woes and closing many of their stores, suddenly saw their market cap swell by 10%. The assault wipes $12.5 billion off Home Depot, other appliance-seller stocks. According to CNBC, “Some analysts saw a buying opportunity in home improvement stocks Home Depot and Lowe’s, among the best performers in the retail space and so far viewed as “Amazon-proof.” So much for that and is anyone Amazon proof? Side note and strange turn of events: there was a time when its catalog was ubiquitous in America. The Sears catalog was how and where America shopped. Says Econolife, “Through the Sears catalogue, the millions of people who remained on the farm could buy goods ranging from thumb tacks to cars to clothing and furniture. Maybe we could say that Sears and Montgomery Ward were Amazon’s great grandparents?”
  2. Launched Spark, a shoppable feed of stories and photos aimed at Prime members, according to Techcrunch. Forest through the trees, it’s also aimed at Pinterest in terms of product discover, and Instagram. “Amazon Spark could be seen as something of a Pinterest competitor, as well, but the actual format for the service is a feed-style interface – which is why the comparison with Instagram seems more apt.” In any case, one of its clear intentions is to wipe the much smaller Pinterest out of existence.

Given Facebook’s copying many of the features of Snap, whom they failed to acquire, seems the behemoths’ (as in Facebook is not alone in this) current mantra is to copy or acquire. Given the launch of Facebook Communities, which is a clear case of Facebook’s going after Meetup’s lunch, the former rather than the latter seems to be the choice du jour.

  1. Amazon dealt a massive blow four major grocers – Kroger, Costco, Target and Wal-Mart – all of whom saw their stocks tank once Amazon announced their intention to buy Whole Foods (Grocery stocks tank as ‘Amazon effect’ strikes fear in investors).
  2. Amazon also dealt a massive blow to Blue Apron, according to Business Insider, when it launched its meal kits service, which has been selling out as Blue Apron stock tanked. And is continuing to tank.
  3. Amazon Patented a robot to stalk you at the airport. Just in case you need to charge your cellphone, computer, or whatever electronics you happen to have in tow. Here’s how it works, according to the article, “You will make a wireless request (perhaps with your last precious few moments of juice). The robot will find you in a crowd using sensor data. Through a cloud-based application, the robot can even find you automatically when your power hits below 10%. Nothing, of course is free, so the robot will ask you to watch an ad, complete a survey, or pay some money.” And we’re sure that they’re not sucking up perhaps more information than may be readily apparent. Where would they store it all, after all? A-hem.
  4. And let’s not forget Amazon Echo (Amazon Echo Show Reviews: Privacy Concerns, Sound Improvements, and Video Calling as Killer App).
  5. Bezos, Slim, and Buffett, Publicly Pleading Poverty, Ask Congress for Help With Their Newspapers. Notes the NYSun, “in this case, the rich individuals wanting special treatment are the newspaper owners themselves. Washington Post owner Jeff Bezos (worth $83.9 billion, according to the Bloomberg Billionaire’s Index), New York Times owner Carlos Slim (worth $61.1 billion), and Buffalo News owner Warren Buffett ($76.9 billion), publicly pleading poverty, are asking Congress for a helping hand in their negotiations with Google, controlled by Sergey Brin ($45.6 billion) and Larry Page ($46.8 billion).” When asked previously about driving booksellers out of business, said Bezos, “People can complain about that, but complaining is not a strategy. And Amazon is not happening to book selling, the future is happening to book selling.” Ah ,when the shoe is on the other foot. We realize that it’s apples and oranges, but wonder how he likes them apples.

How Amazon Has Been Gaming the System

We know what Amazon takes, and Adam Townsend points out what Amazon has kept or been given in order to reach its Amazonian size, pun intended (Amazon is a country, Jeff Bezos is its tyrant and we are the useful idiots):

  • Amazon has managed to avoid its share of taxes and tax collection. They had a pre-tax income of $3,512 million but paid only $152 million in taxes for an effective tax rate of 4.33%, The IRS is currently suing for $1.5 billion in unpaid taxes and in the EU, regulators are challenging the (legality) of certain tax structures in Luxembourg and elsewhere
  • Since 2005, Amazon has received approximately $900 million worth of subsidies to construct and operate its facilities, with $241 million awarded since the start of 2015, taxpayer money that greases the track for a corporation that has to build these facilities, regardless of any potential subsidies, (and) secured a $600 million contract from the CIA for building a ‘private cloud’ for the CIA to use for its data needs
  • The Postal Service is subsidizing Amazon package delivery with first-class mail. If costs were fairly allocated, on average parcels would cost $1.46 more to deliver. Two-thirds of Amazon’s domestic deliveries are made by the Postal Service, giving Amazon even greater benefit.

Now the FTC is (finally) probing allegations of Amazon’s deceptive discounting. Seems that their so-called discounted prices might have been a bit misleading. Amazon denies it but for the record, “Amazon settled similar allegations with Canada’s Competition Bureau in January. It paid a fine of C$1 million ($756,658.60) as part of the settlement.”

Considering the Sears/Kenmore alliance, and if Amazon is any indication, tech seems to be evolving into an era of work with us or perish, or in the case of Blue Apron, so long and thanks for all the fish.

But Wait! There’s More!

PJ Media noted that “In the background, but very much part of the conversation, is Amazon’s engorgement on the The Washington Post company, a once-honored (Watergate!) news organization that Amazon boss Jeff Bezos essentially bought for parts — the main part being the still-influential newspaper in the Imperial City of Washington, D.C. This isn’t so much of a financial investment as a form of protection money — although Bezos had the chutzpah recently to whine about the deleterious effect of Google and Facebook on print’s advertising base, and to make a pitch to the U.S. government for anti-trust protection.”

The President tweeted: A new INTELLIGENCE LEAK from the Amazon Washington Post,this time against A.G. Jeff Sessions.These illegal leaks, like Comey’s, must stop!

“The president here puts his finger on Bezos’ long game in buying the Post — with its long-burnished connections to the deepest of the Deep State swamp creatures, the always-wrong CIA — and its past journalistic credibility. Owning the Post gives him leverage over not only Trump, but the federal government as well; it’s worth almost any amount of money that Bezos wants to spend in order for his to be the public voice of the most important city in the world, a city made of money, dedicated to the pursuit of power, and determined to keep the good times rolling without grubby outside interference from the likes of the nouveau-riche Trump family.”

Disruption Turned Destruction

We’ve noted some of this before, but important to be aware of how incredibly fast this is all moving. Fortunes – and jobs – are being wiped out overnight and not in the name of innovation, but rather destruction. As the Bloomberg article suggests, it may be time that “authorities look to 1956, when the U.S. forced Bell Labs to license its patents to all comers. The result was a deluge of innovation (semiconductors, solar cells, lasers, cell phones, computer languages, and satellites) commercialized by new companies (Fairchild Semiconductor International, Motorola, Intel, and Texas Instruments) and the formation of Silicon Valley. Why not require the tech superstars to do the same? Who knows what forces that might unleash?” We know that the behemoths are not only in it for the long game, but that they’ve clearly stepped up the pace, and their reach (This creepy tool reveals how Facebook’s AI tracks and studies your activity. This is no time to be short sighted. Who knows what forces that might unleash. Onward and forward.