{"id":200133,"date":"2021-07-01T18:29:00","date_gmt":"2021-07-01T23:29:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2021\/07\/01\/today-in-amazon-rat-fery\/"},"modified":"2021-07-01T18:29:00","modified_gmt":"2021-07-01T23:29:00","slug":"today-in-amazon-rat-fery","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2021\/07\/01\/today-in-amazon-rat-fery\/","title":{"rendered":"Today in Amazon Rat-F%$#ery"},"content":{"rendered":"

A brief rundown of poor Amazon behavior, first despite triple digit temperatures in the Pacific Northwest, and the Kent, Washington warehouse continued operations in brutal heat with no air conditioning<\/a>. <\/p>\n

Next, and more significantly, Amazon is demanding stock warrants to carry some merchants’ products in their store<\/a>, which in addition to being something that Glass-Steagall USED<\/b> to ban is a pretty big slam dunk example of anti-competitive behavior:<\/p>\n

Suppliers that want to land Amazon.com<\/a> Inc. as a client for their goods and services can find that its business comes with a catch: the right for Amazon to buy big stakes in their companies at potentially steep discounts to market value. <\/p>\n

The technology-and-retail giant has struck at least a dozen deals with publicly traded companies in which it gets rights, called warrants, to buy the vendors\u2019 stock in the future at what could be below-market prices, according to corporate filings and interviews with people involved with the deals. <\/p>\n

Amazon over the past decade also has done more than 75 such deals with privately held companies, according to a person familiar with the matter. In all, the tech titan\u2019s stakes and potential stakes amount to billions of dollars across companies that provide everything from call-center services to natural gas, and in some cases position Amazon among the top shareholders in those businesses. <\/p>\n

The unusual arrangements offer another window into how Amazon uses its market heft to increase its wealth and clout. The company has been under growing scrutiny from regulators and lawmakers<\/a> over its competitive practices, including with companies it partners with<\/a>. <\/p>\n

\u2026\u2026\u2026<\/p>\n

Amazon routinely leverages its size and power to force terms that benefit itself, including by getting partners in one business to sign on to its other services<\/a>; learning about up-and-coming technology companies through its venture-capital fund<\/a>; or creating top selling Amazon branded goods<\/a> that compete with small sellers on its site. It has aggressively competed to wrest market share from rivals, which Amazon says results in better deals for shoppers. <\/p>\n

In its supplier deals that include warrants, Amazon throws its weight around to exact lucrative terms, knowing many companies won\u2019t refuse, according to former Amazon executives who worked on the deals. <\/p>\n

An Amazon spokeswoman said the warrants it obtains in commercial agreements are typically tied to milestones that Amazon has to meet, such as large purchases from the supplier. The company declined to comment on specific deals, or say how many warrants it has exercised or the amount of money it has made from such agreements. The spokeswoman said it has warrant deals in fewer than 1% of the commercial agreements it enters into. <\/p>\n

Grocery distributor SpartanNash<\/a> Co. last year amended a contract with Amazon to deliver groceries to its Amazon Fresh arm. The Grand Rapids, Mich.-based company had been supplying Amazon with food since 2016, but this time Amazon added a condition: if it bought $8 billion worth of groceries over seven years, it could get warrants to purchase around 15% of SpartanNash\u2019s stock at a price potentially lower than the market. Amazon also said it wanted to be notified of any takeover offers for SpartanNash and have a 10-day window to offer a counterbid.<\/p>\n

\u2026\u2026\u2026<\/p>\n

Amazon has been doing such deals with vendors for about a decade but has aggressively increased the practice in the past few years, said former Amazon executives and lawyers who worked on structuring the deals. In its latest quarterly report, the company valued its warrants at $2.8 billion, more than five times the level three years ago. Amazon doesn\u2019t disclose the value of stakes it owns as a result of exercising its warrants.<\/p>\n

A broader measure of its warrants and the stakes it holds in companies through warrants, direct investment or other ways increased 10 times to $8.4 billion in that period, according to Amazon\u2019s quarterly filings.<\/p>\n

\u2026\u2026\u2026<\/p>\n

Like stock options, warrants let the holder buy a company\u2019s shares at a set price during a set period. If the stock surpasses that strike price, the warrant holder can buy shares at a below-market price.<\/p>\n

Corporate executives in a range of industries and lawyers said Amazon\u2019s push to get warrants as part of vendor deals is highly unusual. Warrant deals have more commonly been used by investors who back companies in financial trouble, in deals deemed high risk.
<\/span><\/p><\/blockquote>\n

Amazon is using its market dominance to steal from the share-holders, but that’s OK with the corrupt stooges that Robert Bork unleashed on antitrust law.<\/p>\n

\u2026\u2026\u2026<\/p>\n

In talks with Atlas Air Worldwide Holdings<\/a> Inc., Amazon broached a 10-year leasing deal, with similar terms. This time Amazon demanded warrants that would amount to up to 20% of Atlas\u2019s equity over five years\u2014with an option for 10% more later\u2014depending on how much business it gave Atlas. Amazon also wanted the right to elect a director to Atlas\u2019s board, after meeting certain milestones. <\/p>\n

People involved on both sides said that warrants were a condition of Amazon partnering with Atlas. \u201cThere was definitely a sense that if it wasn\u2019t agreed to there wouldn\u2019t be a deal,\u201d said one of the people. Atlas executives didn\u2019t want to pass up the revenue opportunity from Amazon and viewed giving up the warrants as the price of doing business with Amazon, said the person.<\/p>\n

\u2026\u2026\u2026<\/p>\n

Former Amazon executives said they avoided doing anything during supplier negotiations, such as putting its ultimatums in writing, that would give fodder to critics who have said Amazon abuses its power. One of the former executives said that most companies complied with its demands over warrants. Several former Amazon executives who worked on such deals said in interviews that they found them to be unfair and one-sided, saying the companies weren\u2019t in a position to refuse and that most of the upside went to Amazon.
<\/span><\/p><\/blockquote>\n

This is extortion and demanding kick-backs, and while it is likely legal, it really shouldn’t be. <\/p>\n

This sort of behavior is baked into its DNA, as we can see by their dealing with the press<\/a> as well, with intimidation and lies being the rule rather than the exception:<\/p>\n<\/p>\n

\n

It was a slow news day at Gizmodo, the tech website where Dell Cameron worked. Without a story of his own to report he decided to aggregate\u2014a journalism term for rewriting and crediting\u2014a day-old Tampa ABC-affiliate\u2019s TV piece<\/a> on how Amazon\u2019s Ring home surveillance security system was being marketed to dozens of Florida police departments. <\/p>\n

A day later, an email from an Amazon spokesperson popped into Cameron\u2019s inbox. The brief email claimed that the Tampa-based reporter, Adam Walser, was \u201ccorrecting his story\u201d and suggested that Cameron would need to do so as well. In her mail, the spokesperson challenged the accuracy of the station\u2019s entire report<\/a>. \u201cIt is inaccurate that AWS or Amazon is marketing Amazon Rekognition to law enforcement, either individually or in combination with Ring,\u201d she wrote. <\/p>\n

Cameron checked, and he didn\u2019t see a correction on the Tampa story. Before making any change to his post, Cameron decided to reach out to Walser and double-check. \u201cI read him the exact email that they sent me,\u201d Cameron says. Walser was puzzled, according to Cameron. \u201cHe said \u2018That\u2019s just not true, we\u2019re not issuing a correction. I don\u2019t know what they\u2019re talking about.\u2019\u201d Cameron wrote back to the Amazon spokesperson relaying what he\u2019d been told, and mentioning that Gizmodo was planning their own potential follow-up story that was \u201clikely to include that Amazon attempted to obtain a correction from Gizmodo by falsely claiming the ABC station was planning to issue one.\u201d <\/p>\n

The Amazon spokesperson doubled down, insisting that a correction had indeed happened. She accused Cameron of being \u201cup in arms\u201d and \u201cthreatening\u201d by mentioning the possibility that Gizmodo would publish a piece about being misled by Amazon. \u201cI do not appreciate being called\u2026 a liar,\u201d she added in a follow-up email. <\/p>\n

\u2026\u2026\u2026 <\/p>\n

\u201cI do not believe for a second that this person is naive or didn\u2019t understand what a correction is,\u201d Cameron told me recently, almost two years after the interaction. \u201cThey got a job in the PR department at one of the most powerful companies in the world. I think they were trying to trick me into correcting a story and didn\u2019t expect me to go back and contact the reporter.\u201d<\/p>\n

It\u2019s not unusual for communications teams for corporations, non-profits, and the government all alike to be withholding in their interactions with the press and to try to spin things in the best possible light. It\u2019s rarer that companies try to mislead and intimidate the press into falling into the lines that they want. But of the dozen journalists I spoke with for this story, most of whom declined to be identified out of concern for professional repercussions, all recalled times Amazon\u2019s press team had engaged in manipulative and sometimes deceitful behavior. According to these writers and editors, and my own experience reporting on the company, Amazon\u2019s comms team readily employs these rarer, bare-knuckle PR tactics. The ultimate result isn\u2019t just that reporters have a harder time writing stories. Some may be deterred from writing on the company at all. And if those that do are deceived and unduly influenced, then by extension the public is as well. <\/p>\n

Aside from Cameron, at least two reporters recalled moments when they felt Amazon\u2019s press team had outright lied to them. Almost all of the journalists told me they found that Amazon press relations was either the most or among the most clawing and deceptive corporate communications team that they had dealt with in their work. <\/p>\n

\u201cAmazon is the only company I\u2019ve dealt with that has directly lied to me,\u201d said one tech writer, recalling instances when Amazon boasted of warehouse safety guidelines in ways that journalists who had spoken with rank-and-file employees had found not to be true. <\/p>\n

\u201cThey\u2019d often lie about things we had proof of,\u201d said another reporter, citing times they had visual evidence contradicting the communications teams\u2019 claims. \u201cThere will be videos of these big walkouts and they\u2019ll say only a few workers participated.\u201d
<\/span>
\u2026\u2026\u2026<\/p>\n

\u201cI do think that the broader effort is to disincentivize you from telling the truth. They want you to feel like it\u2019s going to be a world of pain if you do your job,\u201d one veteran tech reporter said. \u201cEven if corrections aren\u2019t needed, it\u2019s still a headache and a waste of time for reporters and editors and lets them know that they\u2019re probably scheduling another headache for themselves the next time that they decide to write about Amazon.\u201d <\/p>\n

Another reporter at a smaller outlet with less resources described a similar chilling effect after the company pressured him after a critical story. \u201cIt just eats up so much of time, going back and forth with our attorneys,\u201d the reporter said, describing how the trouble had made him hesitant to cover Amazon again. \u201cYou think twice about it. Is it really worth it? Maybe you have a good story but it won\u2019t change how they do business. It\u2019s kind of a scary thing.\u201d<\/p>\n

Amazon tried a similar tactic this September on Reveal\u2014a non-profit investigative news shop that often releases its stories in partnership with newspapers, broadcasters, and other outlets\u2014after it published an award<\/a> winning<\/a> series from<\/a> a team led by reporter Will Evans about the company\u2019s efforts to mislead the public about warehouse injury rates. \u201cYesterday we published an investigation<\/a> into Amazon\u2019s massive misinformation campaign. Naturally, we\u2019re now the *subject* of their misinformation campaign,\u201d wrote<\/a> Andy Donohue, Reveal\u2019s deputy director of projects. <\/p>\n

\u2026\u2026\u2026 <\/p>\n

But others noted Amazon is willing to go to bold lengths compared to other companies they\u2019ve reported on. Amazon has a broader reputation for fostering a cutthroat corporate culture<\/a>, which seems to be reflected in the company\u2019s external communications. Ahead of April\u2019s high profile unionization vote at the company\u2019s Bessemer, Alabama facility, Amazon fallaciously<\/a> tweeted claims that its hard-pressed drivers and warehouse pickers didn\u2019t actually have to pee in bottles, and chided lawmakers like Bernie Sanders and Elizabeth Warren who had spoken out about the company\u2019s labor conditions. Recode reported<\/a> that the tweets were directly driven by Jeff Bezos, the company\u2019s CEO and one of the world\u2019s most wealthy men.<\/p>\n

While that suggests the company\u2019s aggressive PR efforts flow from the very top, there are other executives with a role in overseeing public relations and related portfolios. While the most high profile may be vice president of global corporate affairs Jay Carney, the former Time magazine reporter and Obama White House press secretary, two former Amazon communications staffers and another employee with knowledge of Amazon\u2019s communications team told me that Drew Herdener, the vice president of communications, usually calls shots internally. <\/p>\n

\u2026\u2026\u2026
<\/span>
Amazon\u2019s tactics seem to be well known among reporters. Beyond the dozen with personal experience I spoke with for this story, many others who had not themselves faced an Amazon harangue were aware of the company\u2019s aggressive approach. Indeed, hints of Amazon\u2019s press strategies have leaked out over the years. In 2019, a Twitter glitch notified users when they were put on other users\u2019 private lists. Caroline Haskins, a reporter at BuzzFeed who had broken a series of stories on Amazon Ring, noticed that Morgan Culbertson, an Amazon PR person, had added her to a list<\/a> called \u201cHaters.\u201d
<\/span><\/p>\n<\/blockquote>\n

The goal is to have these tactics, “Well known among reporters.”  The technical term for this is, “Chilling Effect.”<\/p>\n

Even reporters who have never written a story about Amazon are leery of writing one.<\/p>\n

\n

\u2026\u2026\u2026<\/p>\n

It was not the first time I had been yelled at by a press flack\u2014that\u2019s not uncommon. Nor was it the first time I had been asked for a correction. But it was the first and only time a press flack tried to aggressively antagonize and intimidate me into stripping a quote out of a published story from an established expert. <\/p>\n

That expert, Stacy Mitchell\u2014the co-director of the Institute for Local Self-Reliance, a research group that advocates for small businesses\u2014has seen the impacts of Amazon\u2019s PR wrath firsthand. When I spoke with her for this story, Mitchell said that she\u2019s had editors \u201ctone-down and remove stuff to reduce the blowback from Amazon\u201d or \u201cat least brace themselves,\u201d when preparing to publish op-eds she\u2019s written.
<\/span><\/p>\n<\/blockquote>\n

See Effect, Chilling. <\/p>\n

\n

<\/span> \u2026\u2026\u2026 <\/p>\n

\u201cI\u2019ve heard about Amazon\u2019s bullying from many journalists,\u201d Mitchell says. \u201cI sometimes ask reporters about it, and sometimes they bring it up off-handedly.\u201d <\/p>\n

\u2026\u2026\u2026<\/p>\n

Even accepting that less than ideal reality, Amazon seems to be doing something that goes beyond mere spin. Facebook, Google, or other tech giants\u2019 softer pressure and prodding certainly don\u2019t come with the best of intentions. But employing aggressive, intimidation tactics and playing word games that severely contort the truth clearly goes beyond the line, wherever it is. <\/span><\/p>\n<\/blockquote>\n

I am not surprised.  The company was founded by a contemptible sociopath, and the company (Corporations are people, my friend) is a contemptible sociopath as well.
<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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