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[dupe] Amazon staffers took bribes, manipulated marketplace, leaked search algorithms (theregister.com)
141 points by Saad_M 29 days ago | hide | past | favorite | 55 comments




re: dupe.

FWIW, this does contain some new/different information. IDK what the dividing line is for dupes, but would like to see new information as it's released.


Note the scale here:

Conspirators paid $100k in bribes. "Products and merchants earned in excess of $100 million in sales revenue."

I haven't heard the job titles of the amazon employees yet, but presumably these are not very senior people. In terms of corruption dynamics, Amazon is now like a planning authority where a friendly official can rubber stamp a large fortune into a real estate developer's pocket.

Also note that, like with government corruption a lot of corruption stays just to the left of criminal red lines. Many former employees of large marketplaces (amazon, FB ads, adwords) move into the more lucrative seller side, either as employees or consultants. They are expected to bring inside knowledge and contacts to the table.

There have already been serious antitrust cases (eg the EU adwords case) concerning these marketplaces. More are coming. Meaningful fines or enforcement is yet to be seen.

Now, $100m corruption incidents.

I'm putting my money on the table now. Tech monopolies are the major political-economic issue of the 2020s.


This is what inevitably happens when you centralize power/authority/buying options for consumers. Amazon can make or break a business/product line. Centralization also makes it much easier for those who are willing to cheat their way to the top.

To a certain extent Amazon's dominance has also directly led to the Web being filled with listicles. It's much easier to write up a list of "recommended" products when all of your referral links can point to Amazon, which is a trusted source of ecommerce for a majority of Americans. It would be much harder for listicles to be as profitable if consumers had 10+ Amazons to choose from when doing their online shopping.


I was thinking this, $100k for taking on that level of risk?


Corruption cases are often like this. You look at the case itself and think "this money for that much risk?"

Ehud Olmert was removed from office as Israel's Prime Minister for taking bribes (in exchange for rezoning) years earlier as mayor of Jerusalem. The amounts seem very petty. About $25k IIRCC. We actually went from Prime Ministership to jail over it.

I suspect the reason these bribes always seem petty is that only a fraction are uncovered. These people take bribes regularly, sometimes for decades. They get busted for one or two.


$100K for a staffer that reviews merchants and product listings is probably more than their yearly salary, in fact it wouldn’t surprise me if it’s not even about double.

This aren’t people on high comp packages the bulk of Amazon’s workforce even if you discount the warehouses isn’t paid SV salaries.


It's amazing what a disgruntled employee will do, and how little it takes to make them do it.


A survey says the you can compromise most employees for $500.

I wanted to do a website called "Ransom Rewards" allowing you to sign up to ransomware your own employer and you could set your own price to pick up data for a research paper but it was considered unethical to even imply you could get paid to fuck over your employer :(


Maybe you should start by surveying the ethics board, and then just pay them $500 to find it ethical. Bootstrapping.


I am assuming that these 100 million in revenue bought in wasn't overnight... and I can guarantee that these reps were paid on a continuity basis.


You might equally assume that the 100 million of revenue uncovered in this case was not the only $100 million dollars earned this way on amazon.

In any case, it's hard to know quite what these numbers represent specifically. You also don't really know exactly what a real estate developer "earned" by bribing a city planner to approve his building.

Take it as an approximation, an estimate of the scale. The $trn market caps and >$100bn revenues of modern tech monopolies can dwarf everything else.

Make no mistake though, $100m in sales is entry level industry-scale. That is, there are industries where $100m of sales due to outright bribery of market officials (what amzn employees are) is enough to make the industry a corrupt industry.


>They are expected to bring inside knowledge and contacts to the table.

This is not always unethical, we exclusively hire former AdWords account mangers for our sem team. This primarily done for branding and reducing the recruitment cost.


If the market is unhealthy (e.g. a monopoly exists in some cases) then it is very much as unethical or illegal as their (former) employers’ market position is: they’re literally leveraging the same conditions to extract value.


Ethical is a broad term. It's not illegal, or in violation of any industry ethics standards that I know of.

That said, it's not illegal (in the US) for politicians to receive payments from companies for consulting, giving lectures or such. It's not illegal (in most countries) to hire former staffers for a politician you wish to lobby as lobbyists, compliance officers or such. I would say that most people do consider some of these ethically questionable.

IMO, the issue is one of nuance and scale. The more subjective, arbitrary or ilegible decisions these employees can make, the larger the risk of corruption. The more employees can make these decisions, the larger the risk. The larger the economic impact of these decisions, the larger the risk.

This case, demonstrates a dangerous nexus. The marketplace has a lot of moderation (or whatever amzn call it). Subjective decision making. Culprits removed suspensions on sellers and products in exchange for naked bribes. For adwords, that might be ad copy approval, adsense categorization. IDK if an adwords account managers can affect quality score, but that would be a big one. I suspect they can. A lot of amazon and google employees make these decisions, another scale for the nexus. These decisions are worth a fortune. In this case, $100m in sales.

Subjective decisions made by many people affecting very large sums.

Once you are at Google or amazon scale, this is big money corruption. $100m in sales. There are whole industries where whoever wins at amazon marketplace, facebook ad market or adwords wins a major market.

In terms of ethics... Ethics either works against some sort of professional or societal standard (eg legal or medical ethics) or you have to examine it from a "who is harmed and is that fair" perspective. Here amazon itself was harmed, so it's straight crime. In other cases, it might be unfair to competitors or consumers. If you are outperforming your competitors on adwords because you hired the most well connected former account manager... I can see where competitors would consider this unfair.


Amazon is a soviet union cybernetics wet dream.

Jokes side: Do you see society coming to realize that a similar system can actually implement a planned economy for real?


Who takes the hit when the demand projections are off?


Bingo! Although, this system would categorically eliminate the issue from the following Soviet-era joke:

> A man goes into a shop and asks: “You don’t have any meat?” “No,” replies the lady, “We don’t have any fish, it’s the shop next door that doesn’t have meat.”

Under the new system, the man wouldn’t have to bounce from store-to-store. There would be one convenient online shop with no meat AND no fish.


An AI driven command economy does not have to be perfect to outperform a free market. If an AI-driven command economy outperforms free markets, the free market dies, just as when self-driving cars become more cheaply insurable because they cause less insured loss, and stop entailing traffic enforcement costs, the human driven car dies.


true, at the same time nowadays the state and the central bank are already taking the hit, at the place of the private economy.


I think one of the problems Amazon suffers -- and this is not a condemnation of the company as a whole -- is that it treats employees like garbage and runs a sweatshop. There is zero loyalty among Amazon employees I know. Some are very highly-compensated sweatshop workers, but sweatshop workers nonetheless (a lot of fintech and quant work the same way, and even more extreme -- you get a lot of money, but you have no work/life balance, are on call 24/7, and if your performance slips for a moment, even due to a family emergency, and you get the pink slip).

That sets a strong environment for corruption.

Why is this not a condemnation of Amazon? Turns out each corporate structure has problems. You pull on one lever, and you get a dozen unwanted consequences. But it's important to recognize the faults of such structures.


To turn this in a more broad discussion, are there any examples of “great” corporate structures for tech firms that scale well? Google has its problems (unwanted side effect being abandoned projects because of how they promote internally), I’ve heard quite a few bad things about Netflix as well. Apple and Microsoft seem to be faring quite well in this regard?


Last I looked, Microsoft's culture was toxic -- much more so than Amazon, Google, or most any other major tech organization. A ton of in-fighting, and decisions made for political reasons. They were working hard to clean it up, but I'm not sure how far they got.

Organizational design is a complex problem. It's like finding a great employee or a great spouse. They don't exist; it's a question of fit-to-function. Linus Torvalds would be a lousy doctor, and my doctor would be a lousy programmer. You really can't get everything. If you try, you fail. It's a question of aligning organizational structures to what you're trying to do. If you're running a sweatshop in India like a corporate R&D lab, or vice-versa, you're gonna fail.

I would argue Amazon has a great corporate structure which scales well for the purpose it's designed for. Amazon has been winning for alignment to profit/growth, for innovation, for customer-focus, and loses on the employee sweatshop front. That ain't bad. I think it's cracking a bit under COVID19, but at least for two decades, it's done really well for both customers and growth.

Google was a great org structure for its first decade, and then grew complacent in hiring, and when bad employees came in, it started failing in virtually everything else; I'm not sure it's coming back, but I hope it does. For now, it's been sailing on its (very significant) momentum, but that eventually wears off. It doesn't seem to have the right executive team in place anymore, though, so I'm not sure how it might come back.


Not only do they work their employees hard and offer limited benefits, they tightly constrict what they can say and what they can do outside of work.

For instance, want to grab a couple buddies and do a game jam? That's against the rules and could result in you being disciplined.


And after you leave. They have nasty non-competes, and they do sue employees on the way out the door. Even when they're wrong, they're right; threat of cost of lawsuit is enough to deter 95% of their employees.

I didn't want to work for Amazon in part for that reason.


> Why is this not a condemnation of Amazon?

this is a feature unique to capitalism not just Amazon.


Capitalists can value the long term advantages of having a fairly compensated and happy workforce. A company might be able to gain a short term benefit by mistreating or underpaying workers, but in a properly regulated capitalist system this will lead to public backlash, regulatory attention, corruption, and ultimately employees leaving for competitors.


Capitalist markets, even when thinking through the long term, don't work like that. A lot of costs of messing with employees are externalized. If I lay off my workforce after a product ships, issue stock options worth 10 cents, or otherwise, the result is a lack of trust in tech management as a whole.

The direct blowback on the individual company is pretty small. Would you ever find out if a manager you were interviewing with had done that? Or a startup?

The US was more efficient when companies treated employees better, and when companies were like a community who took care of each other. But, as an individual manager, and even more so as a company, I come out ahead if I treat employees more aggressively.

Better transparency would help. If employees could see company financials, it would solve a world of hurts. The information asymmetry is a lot of what leads to inefficient markets here.


They could, but they don’t because the short term usually works out just fine for them.


I agree with you, but even among capitalists Amazon is uniquely brutal to work for.


Management is very corrupt at Amazon. Lets just say the teams tasked with catching theft are strongly pointed to the lowest level employees like dock workers, pickers, and stowers. Lets also just say the managers are the ones shoving product over the fence.


"Your Honor, I was taking bribes merely out of customer obsession!"


Good to see that something is being done but when there's money to be made and humans are in the decision loop there's going to be an opportunity for social engineering and corruption. Amazon is the biggest target but I suspect this is going on anywhere else there's a large enough cohort of shoppers (eBay?).


I'm generally against the 20th century solution of breaking companies up when it comes to tech companies... but Amazon's problems are not Facebooks or Google's. It's way simpler, and it fits the mold perfectly. First of all, Amazon should absolutely not be allowed to operate both a retailer and a marketplace. Second of all, this marketplace is way too large. It is clearly not in the consumers favor for such a large marketplace to exist.

Fortunately Amazons service oriented architecture should make this break up a breeze.


Do large companies basically create an “eggs all in one basket” risk?

If the market supplied by Amazon was instead supplied by 10 smaller companies, the attack surface would be higher but the impact would be lower, right?

Feels like large corporations could be seen as a national security risk (and not just “guns and ammo” security but “economic stability” security)


>Feels like large corporations could be seen as a national security risk

Already are, governments have outsourced many functions to corporations. Ban on Huawei is an example.


Amazon already has many competitors for their retail business. Costco, Target, Home Depot, Lowes, Bed Bath Beyond, Walmart, eBay, Overstock, Wayfair, Aliexpress, etc.

The barrier to entry for retail is very low, and reflected in the low profit margins.


Let’s compare like to like, though. In theory anyone could start a site to provide a marketplace for sellers for $5/month in hosting and maybe a few hundred bucks in upwork costs for standing up a php e-commerce platform. In practice the cost to compete with Amazon is much higher.


Competition with any larger entity is more difficult in metrics that are improved by scaling.

My point was that Amazon has many capable competitors.


The barrier to entry in that market (Amazon and its competitors) is staggering compared to the barrier to entry into the general "sell stuff online" market.

I also don't agree with your list of competitors. Amazon is more like a mall, while almost uniformly the others you list are more like a retailer acting as a middle-man between wholesalers and the general public. I'd agree with Aliexpress and maybe Walmart.

It's just not a healthy market.


Part of me wants to believe this comment is satire, but the better part of me knows this is HN, so conceivably someone would call the barrier to entry for competing with Amazon's retail unit "very low"


It IS very low because anyone with a few hours can put together a shopify or woocomerece store and instantly start selling whatever their heart desires.

Competing against Amazon's scale is tough as it would be a huge challenge to be able to offer next day shipping for free anywhere in the US, but you can add value other places.


The comment wasn't "the barrier of entry to selling a thing on the internet" the comment was in a thread where the context was competitors on the scale they could be replacements for Amazon.

The barrier for that is not a Shopify page... that's not going to get you a fleet of Boeing 767s that shore up your nation-wide logistics chain able to deliver a 3 dollar dog toy 200 miles in less than 24 hours.

Even Walmart is struggling to compete with that, how can someone say that there's a low barrier of entry there with a straight face?

In fact you seem to be aware of this because literally the next line down you say... Competing against Amazon's scale is tough

-

This is just another typical HN contextomy. People need to learn read a comment in the context it's given, rather than going "well technically, if you just ignore the context given, it's actually this totally unrelated thing."

It gets exhausting having to constantly point out context that's literally right there.


No, I completely understood. This is like the people in the 90s who were going "How can anyone compete with Wal-mart who has retail stores in every city and an incredible distribution network?"

I stand by my statement that the barrier to entry for retail has never been lower.


Apparently you don't stand by your statement since you literally just changed it...

My comment refers to "the barrier to entry for competing with Amazon's retail unit" to which you reply "it IS very low".

Which is comical.

Now it's shifting to "the barrier to entry for retail has never been lower."

-

If you had said that we wouldn't be having this conversation, because newsflash:

> This is like the people in the 90s who were going "How can anyone compete with Wal-mart who has retail stores in every city and an incredible distribution network?"

It only took this little thing called the Internet taking off, a company that took decades to grow to the scale where they could compete with it along with their revenue from other business units like this little one called "AWS".

So yeah, if we're willing wait another couple of decades I'm sure the next Amazon would have an easier time now that they don't have to wait for the concept of Internet shopping to become mainstream.

Doesn't exactly address the original comment's point that the barriers to building something to compete with Amazon are very high though does it?

It's almost like trying to compete with Amazon's retail unit means somehow competing with a product riding on their revenue from all their other units, including AWS. The writing has been on the wall there though: https://www.businessinsider.com/amazons-cloud-is-funding-its...


Amazon doesn’t offer free shipping, it’s simply included the price of the product.

It’s also not next day many times in my experience, and other companies online ordering experience and shipping times are comparable.

What’s not comparable is that Amazon doesn’t stand behind stuff purchased from their flea market of a store, whereas I can have more trust in the supply chain at pretty much any other retailer.


In a sense entering the market is easy -- sign up to Shopify, drop ship from China, etc.

On the other hand, competing in the market is not easy.

Maybe that's what he meant?


Competing in any market isn’t easy, especially with low margins. If it was, someone would be doing it, since people have a goal to earn money.

The comment I replied claimed Amazon didn’t have competition, to which I wanted to point out that the retail side of Amazon has a ton of competition. And single digit profit margins are pretty hard proof of competition, and/or low barrier to entry. Because again, people have a goal of earning money, and the only reason they would accept single digit margins is if others would take their business.


I guess this effects all companies that run a platform whether it be social or market based. The question is what can a company do prevent bad internal actors without put their employees under draconian rules?


Maybe any major change to a system, for example turning on an seller's account that was banned, should require a small explanation that is reviewed by additional employees.

For example 1,user x disables account, fraudulent health products

2,user y enables account, ????

Seems like many major changes almost never require a user to justify them with a written explanation.


I'm sure it's just a few rogue staffers rather than being a structural issue.

Because of course it's not problem for the company that owns and controls the marketplace to compete with most of the products in it. It's only a few bad apples.

That was sarcasm by the way.

There is a sane alternative and it's called distributed protocols.


I think Jeff has become inactive of managing Amazon's online retail business unit and stopped caring few years ago. The results:

- fake products

- fake reviews

- ad based search

- massive scale bribery scheme


I reported a violation of Amazon's community guidelines and Seller TOS for a popular electronics product I purchased earlier this month (details: http://leanmedia.org/amazon-is-broken/). Here's the thread with support:

Me: Hi. The box for this product contained a card that says "Amazon $20 gift card" and looks like a gift card, but the back says I have to give a 5 star review and send my order information to an outlook email address. Is this legitimate? Is it really a $20 Amazon gift card?

Amazon: Thank you so much for your information on this, I will certainly pass it along here so that we can check this promotion or offer directly with the seller Because I am not seeing that advertised on the item at all And would not be capable of confirming if that is a legit Amazon gift card because, I do not see that offer on the item

Me: So what should I do?

Amazon: My best suggestion would be to contact the seller directly for this through this link [redacted] So that you can confirm directly with them if this is legit or not Certainly giving away gift cards for good reviews is not professional And I have to report the seller for that

Me: I thought this type of offer was forbidden by Amazon's own policies for sellers. But I will contact them using the link you sent to ask them if that's what you recommend.

So I contacted the seller through Amazon's closed system. This is what happened:

Me: I received your product and inside the box is a card that says "Amazon $20 gift card" and looks like a gift card, but the back says I have to give a 5 star review and send my order information to an outlook email address. Is this legitimate?

Seller: Thanks for your contact. Could you please follow the instruction and contact us on the email? Please be rest assured that we will fulfill our promise.

So, to summarize:

- Amazon has strict rules in place that forbid asking for 5 star reviews or paying for reviews (https://sellercentral.amazon.com/gp/help/help.html?itemID=18...)

- Amazon's own support people have a difficult time telling the difference between violations of this policy and legitimate promotions, and leave it up to customers to contact these sellers on their own to figure it out.

- The rule-breakers are all too willing to lie through their teeth, brazenly using Amazon's own communication system to do so.

- Nothing happened to the seller, they are still selling this equipment without penalty on Amazon and will continue to violate the rules knowing nothing will happen.

Amazon is completely broken.


I wrote a 1 star review for similar behavior and my review was removed. Amazon is either corrupt or stupid.


not really surprised about this and almost impossible to isolate with a company consisting of 1m employees and growing.




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