Am I reading this right?
Amazon accepted advertisers hawking junk ads which made ad prices more expensive and gave less relevant ads to their customers.
This can't be a violation of any law or ethical rules... Does anyone seriously think serving only good and relevant ads is an ethical obligation. Can't retailers accept ads from anyone without vetting for quality control.
The only thing I can think of here is FTC is trying to make a weak case that Amazon is a monopoly by claiming look they had the power to show crappy ads. Which is a weak argument.
Maybe Amazon is too big and too dominant in the market. I don't know. But this article and this aspect of the case looks weak.
I don't know what has happened to YouTube ads in the last year or so, but now that YT is cracking down on adblockers, I'm seeing a lot of them. One thing I'm noticing is that most ads are absolutely garbage.
It was one thing to see the 'professional' ads for T-Mobile internet and makeup and whatnot, but I'm seeing a ton of clickbait-style ads for things that are very clearly get-rich-quick and/or straight-up scams. "This one new method of heating your house is taking America by storm!" "This new device that cleans your house in five minutes is being called revolutionary by experts."
You may be seeing the ads but you’re likely still blocking the tracking/targeting.
Disable targeted advertising on any platform that allows it and you’ll see the lowest form of generic click bait junk ads. Twitter used to allow this and I disabled only to be fed streams of shock-factor click bait rather than industry-relevant ads.
High-quality, expensive, polished ads only go to demonstrably high-value demographics.
Turns out there’s at least some merit to the argument that targeted ads create a better experience (for some, at least).
Consumers have a limited wallet anyway, and you know how most people are: they will spend most of their income anyway. So the ad business is more about shifting where the money goes, than about conferring any extra value.
"Raised prices to increase profits" describes many business decisions, but if a company does that after eliminating their competition, policymakers & economists understand that to be a bug of the algorithm 'capitalist market competition' that requires redress, a betrayal of a populace that has been sold a system on its merits (and is willing to tolerate its costs for those merits) but which is not displaying those merits consistently and is failing to improve our lives.
Arguably a firm that has established itself as a standard marketplace with strong network effects, should not be allowed to favor certain products with disproportionate placement in exchange for a kickback. They have become more like a government body than a private enterprise, and if they're dumb enough to slaughter that golden goose for temporary boosts ("dinner"), their behavior demands a degree of regulation if we are to ensure market competition & ensure a benefit to consumers and manufacturers.
What is the proposition for an independent vendor selling on Amazon? To them, the service of selling their merchandise is essentially a monopoly market, they don't get a choice of whether to participate, and Amazon charges high fees to start with and is now demanding ever-higher fees for reasonable search placement.
Imagine what the exact same FTC would be saying if Amazon exerted control over which ads were displayed based on what converted to more product sales (and thus revenue for Amazon).
Advocating for a less equal ads marketplace seems like such a strange position for the FTC to take.
Are they simply throwing out every possible accusation and seeing what sticks?
The correct solution is a no ads marketplace. Where search results return what the user searched for and literally no one (not even Amazon) gets to pay to put their products at the top of the results.
SEO is hidden? SEO is the sea that the entire internet has drowned in, unless you know where to go diving through it to find underwater caves that still have some air left.
Can a regular person (or an expert) tell that you see an ad? Usually yes, as it's banner or some visually distinct piece of a web or real estate.
Can one tell that a text is produced by SEO? Usually no (especially, when it's good quality).
Now, the difference is:
- In ads case, a government comes and asks for a tax. Because there is a clear case for a transaction in an economy sense (ad for money).
- In SEO case, no transaction proof is there. Can't come and ask to pay tax, or regulate anything. It could be a happy customer who wrote a piece of text. Or clever SEO author. Or both mixed. Can't tell! In this sense SEO brings less or no tax.
How do you define that? Do you exact match on query text? How products that convert better? Have lower return rates? Is a 1 start product that matches the query exactly better than a 5 start that mostly matches? Etc, etc.
I don’t follow your reasoning. Amazon stands acccused of “pay to play” market behavior. If you want to participate as a seller in the Amazon monopsony marketplace, you have to pay. That’s the behavior of a monopolist.
Grocery stores sell shelf space, particularly prime positioning, and that’s a practice that predates the internet. Add to that the fact that most websites sell ad space as a primary or secondary revenue generator.
Yes, Amazon is a middleman and they take as big a cut as they can.
Is that abusing a monopoly or simply the nature of being the most successful marketplace? That’s for the courts to decide, I guess. (Or not since they’ll obviously settle before it goes to decision.)
Amazon is not only charging sellers for placement, but they deliberately threw a bunch of fake and shitty products up on their marketplace to force sellers to cough up more money.
They also require sellers not to sell their product cheaper anywhere else, which I’ve never understood how they can get away with.
I find Amazon's search to be worthless. Frequently, I search for a book with author's name. Frequently, that book does not show up. On more than a few occasions, it would be on the 2nd page of search "results" (most of page 1 are "sponsored" = adverts). Now, I just use Google and that results in the book I'm looking for. On other things, I find Google returning less than useful results when searching for things.
Yeah, this was my reaction too. They run shitty ads and serve shitty search results: fair enough, take your business elsewhere. I'm not sure what the story is. I feel I must be missing something, because it's the FTC raising a stink and not just Vice. Whether it has merit or not, the FTC presumably is not just trying to get clicks. I'll wait until another (better) news source provides additional context before forming an opinion.
You can't necessarily do that. Amazon is a pseudo monopoly.
But if the FTC is trying to use that as antitrust evidence against Amazon, it feels like a weak angle. Which is not a good sign given their recent history.
I guess it depends on what counts as junk. It seems like allowing false advertising or outright malicious scams should be an ethical if not legal issue.
However, seeing as Amazon calls them defects, it sounds more like they're just non-relevant ads. Sellers might have a case that they were paying for some level of targeting and and getting worse click through rates than advertised.
Wait until you hear what that other company did. They inserted a whole extra ad slot in the search results! Half the organic results are now below the fold. sob
The combination of 'it makes it more expensive for the consumer' added with 'sellers are not allowed to sell their products cheaper on other sites even if it is cheaper to sell on those sites' means they are anti-competitive and harming the market. This is the issue.
The case against Microsoft was based on Microsoft giving away a free browser. That never made any antitrust sense - no consumer harm was ever demonstrated.
Ironically, today every platform includes a free browser.
The case against Microsoft was that they used revenue from other markets to offer a browser for free so that they could prevent a competition in the browser space...
There is an argument that the browser is a feature, not a product. But that is not the case for back then.
It wasn't so much offering a browser for free as compelling PC vendors to not bundle their competitor's browser. You might of course argue that a PC should have zero browsers bundled...
Microsoft also bundled a text editor (EDLIN). It didn't impair anybody else from writing and selling editors. They also included a programming language (BASIC) for free. Didn't impair other language creators.
Have you noticed that vast categories of computer programs are free today? Do you realize that every one of those was funded by revenue obtained elsewhere?
That whole anti-trust case was chock full of jaw-dropping absurdities.
BTW, the D Language Foundation is funded by donations. We charge $0 for our products. Anyone can also fork it and do whatever they please with the fork. We particularly like it when people use it for commercial purposes, i.e. making money!
This is largely true, of course, but also a complete non sequitur? There have been free and donation based things for a long time. Shareware was very awesome, to me.
But to pretend Microsoft was not engaging in questionable practices feels very bullshit heavy. And an equivalency game here is very discrediting to both arguments.
Questionable about their practices? I remember the effort it used to take to get netscape to be the browser your machine used. It was comically difficult to do, at times. So much so that I was never comfortable going for the paid Opera, as I just didn't think it would stick to my machine.
It is frustrating, because I think it is largely fair to say that netscape was the worse option at the time. Navigator was largely trash. That said, jscript and activex controls were both obvious land grabs on the internet. I'm... not really sure how most any part of what all Microsoft did back then can be defended.
> jscript and activex controls were both obvious land grabs on the internet
Jscript was developed originally for Netscape in 1995 and was standardized in 1997. Not sure how that is a questionable land grab by Microsoft.
P.S. I wrote a jscript interpreter back in 1999 or so. It was used as a drop in replacement for Microsoft's implementation. It did not require heroic efforts to make.
I remember jscript being mainly a way for them to not have to use the name javascript. Which, fair that that entire history is nonsense. I have weaker memories of doing things that would work in jscript that would not work in javascript. But, I also consider that in my concession that navigator was not a good browser.
You comparing the D Language Foundation to Microsoft here is nothing short of hilarious. Does your nonprofit even have employees? How much of the market have you captured? How many billions of dollars in revenue are you getting?
Classifying what Microsoft got in trouble for as merely "giving away a free browser" shows that their PR campaign was a resounding success.
It wasn't just having IE be distributed with the operating system, or even having it be the default (as the EU later got upset about). They would have been perfectly fine in this position had they not attempted to use it anti-competitively: coercing OEMs to not include competing browsers like Netscape on pain of financial penalties.
I installed and used Netflix for free in those days. Nobody paid a penalty for that.
I later switched to Explorer, not because it was free, but because Explorer crashed far less often than Netscape. Netscape crashed constantly. Only a desperate person would continue to use it.
The free one, whatever that was. It was a long time ago. If you're saying Netflix Gold didn't crash as often, the crashing free version was not a convincing advertisement for it.
There was a lot of money made in the PC era by making better tools than the ones bundled with DOS. Netscape wasn't one of them, because it was worse than the bundled one.
Consumer harm wasn’t originally a requirement for antitrust enforcement. It was added by conservative jurists mostly to make it difficult to successfully bring antitrust cases. And hey, it worked!
(sigh) I think you're a lost cause, but maybe someone else will read this.
Monopolies tend to keep growing until they are broken up. Monopolies don't have to charge high prices to consumers if they can increase their profits at the expense of sellers. In the case of Amazon, sellers may be authors or publishers who get squeezed. They may be small businesses. They may be big businesses. There is additional harm to the consumer from the distorted marketplace which results.
You may not be aware, but Microsoft engaged in a lot of monopolistic activity, including preventing OEMs from including the BEOS operating system as a dual boot operation on systems which shipped with Windows. You may also not be aware that Microsoft tried to get Apple to kill their own browser, a.k.a. "knife the baby". Google it.
> (sigh) I think you're a lost cause, but maybe someone else will read this.
In my experience he will confidently state his existing beliefs as the absolute truth, refuse to provide any supporting evidence, and ignore any evidence to the contrary. ¯\_(ツ)_/¯
> Monopolies tend to keep growing until they are broken up
No, they don't. Left alone, they grow until they collapse from internal bureaucracy and inefficiency.
> Monopolies don't have to charge high prices to consumers if they can increase their profits at the expense of sellers.
Microsoft gave away the browser for free.
> In the case of Amazon, sellers may be authors or publishers who get squeezed.
Resellers normally buy at wholesale prices and sell at retail. The same percentage as Amazon takes for providing retail services. As a small business (Datalight and Zortech days) I am well aware of this.
> You may not be aware
I am aware. Microsoft failed to stop Linux, and failed at stopping Apple.
> No, they don't. Left alone, they grow until they collapse from internal bureaucracy and inefficiency.
Eventually, maybe. But it usually takes far too long and if we speed up the process (and smooth out a boom/bust cycle at the same time) then that seems like a win to me.
If we agree that smaller companies are more efficient then we should actively bias the economy towards them rather than allowing big companies to outcompete them purely because they have market power.
Big companies are the engines that drive an economy with productivity and employment. Small companies are the future big companies. A healthy economy needs both.
Trying to bias an economy towards small business means your economy will be backward and unproductive.
> If we agree that smaller companies are more efficient
I did not say that. Small companies become big companies by being more efficient than existing big companies. As time goes on, big companies slowly get strangled by bureaucracy and inability to adapt to changing times, and come unglued.
But the economy needs their efficiency when they are young.
They did lots shady things also, belt and suspenders style. Which is the subject here.
I started on gopher and Mosaic and Netscape was far ahead and good enough for a long while. Only until IE4 did MS pull away. Of course by IE6 the damage was done and they left the entire industry broken with a moribund dominant browser that took a decade to recover from. Rot in hell.
If you knowingly participate in scams, hawking junk <anything>, defrauding customers, or any other thing, then yes, that's some shady shit. Does it break any laws? Not a lawyer, but it damn sure breaks the spirit of law (intentionally leaving out "the").
While I largely agree: "knowingly made things worse for consumers and suffered no consequences" does seem like meaningful (but far from sufficient) evidence of excessive control over a marketplace. If things were healthy, you'd expect competition to capitalize on that enshittification.
Intentionally making sites shit to boost profit is pretty routine.
And not just internet rags that bury a tiny slither of content under dozens of ads and popups.
The classic one is insurance sites. It's an open secret that they make the claims process as difficult as possible. The ideal insurance claim platform for an insurer is basically to register all zeros on Lighthouse, with a session timeout 50% less than the observed time taken to complete the process (which of course has umpteen pages with no progress indicator and a super slow page load).
Similar with government websites related to welfare and services. The harder it is to use, the more people will give up, and the greater the cost savings.
It’s similar to the repairs line on an appliance extended warranty I once got. I set a stopwatch the moment the hold music and “our lines are busy af” messages began: the call connected at the stroke of 30 minutes—not a second more or less. I did this because it was a third call to this service and I suspected there was a mandatory hold time to make people give up filing claims.
I dislike Vice's journalism style, IMO psyops, and rather obtrusive ads. To me, the FTC announcement, beyond being the original source, is to the point and respects my time.
I'd be curious if anyone can explain why the FTC doesn't go after Amazon for using its dominance and profits in AWS to massively subsidize its Amazon.com retail offerings (i.e. movie studio/healthcare/grocery/delivery) and undercut its competition in those spaces.
It's seem to have stopped since ZIRP has ended and Bezos has moved on but for awhile the AWS profits seem like they were feeding an ever growing conglomerate of disparate businesses with the intent of owning every market. [1]
Such actions feel somewhat similar to Microsoft using its dominance and profits from Windows to give its browser away for fee.
This ads suit seems like a distraction.
That said I'm not particularly anti-monopoly and have a Prime membership - mostly just curious.
I am speaking entirely speculatively, but I’d imagine it might be having to do with going for low-hanging fruit, or at least trying to chip away legally before (or instead of) sweeping anti-trust litigation.
The appetite for this kind of action hasn’t exactly been great the last few decades, and big swings can lead to big misses (like Activision-Microsoft)
The EU also has a much stronger regulatory framework than the United States does. American corporate-friendly policy decisions make litigating anti-trust more difficult. Not to mention congressional inaction means regulatory policy is stuck generally in the last century. The case against Google has seemed the strongest yet, but we shall see how things play out.
I remember when DealExtreme (DX.com) was popular. I complained that their search was broken and returned to many unrelated results. Their reply was that that boosted sales. That was when I started trying to avoid them. Not the are gone.
What about how AliExpress' search works? The first few listings will be prior viewed items, typically wildly unrelated to the current search-- just remarketing ads based on products visited. Then the things labeled as ads are even more outlandish and inappropriate (serums, pills, pseudo-scams)-- but I guess the ROI is there, else they wouldn't be running them. Similar to the old days of FB where any scammy rebill products were allowed, then once an advertiser base was built, they canned all of the exceptionally unscrupulous advertisers.
Unrelated but their drop shipping service was great, complete with practically free custom branding on anything customer facing.
Before it became the insane high-volume low-profit fraud ridden race to the bottom it is now, I made spending money in university selling Wii accessories on both eBay and a simple online shop.
I was always up front about authenticity, long shipping times, and tested products myself first.
Then Amazon and Aliexpress came along (to the mainstream) so it’s no surprise they couldn’t remain viable.
Which is in interesting because Amazon's "Leadership Principles" a are well-known and well-publicized part of Amazon's culture. Number 1 on that list is of course "Customer Obsession", which states:
>"Customer Obsession: Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers."[1]
It's probably no surprise that this is little more than a meme whose sole purpose is to be ceremonially regurgitated during job interviews.
It really isn't a meme. It's taken pretty seriously at the company, often gets cited in meetings as a reason to do (or not do) something, and is almost always referenced in large strategic projects/planning docs. It's even sometimes included in criteria for determining performance/promotions.
The problem lies in the fact that there's no one single definition of who "the customer" is, and no one single definition of what the best thing for that customer is. One team might see customer obsession as making sure only the best ads are shown, but there's probably another team who thinks that being obsessed about customers means showing the _most_ ads, while a third team sees _the ad companies_ as "the customer" and thinks that being customer obsessed means making them as happy as possible.
There's a weird side effect about being so serious about customer obsession. Like I mentioned earlier, it's often used as a promotion criteria, so people will come up with weird stuff and then spin it as "customer obsessed" so they can get promoted, even if it's something like showing more ads or constantly reminding people to buy something (which probably gets spun as "helping the customer to not miss out on a good deal" or something like that).
>"The problem lies in the fact that there's no one single definition of who "the customer" is ..."
From the post that we are commenting on here:
>"... show that company executives, including former CEO Jeff Bezos, knowingly made changes to the e-commerce platform that boosted profits while harming consumers and sellers, and making the site less usable."
It's pretty clear who the customer were here. It's literally all the parties that were not Amazon.
Something that "gets cited in meetings" yet not applied in practice pretty much supports it being little more than meme status.
Your quote listed two different distinct groups of people that are both customers of Amazon: consumers and sellers. And there's a third group that isn't listed: the ad companies which are also customers of Amazon. And what's best for one of those groups isn't necessarily what is best for the other group.
If the head of the fish is violating it, especially consistently, it's not a "culture". It's a tool to mislead people. The "use available tools to mislead people" is the culture.
(I'm not at all claiming this is unique to Amazon. But it uh. Does seem to be the case there. Like most large companies.)
And while I gave insight as to what it's actually like working with teams at Amazon, you've spouted speculation based on no experience or knowledge and now it sounds like you have nothing valuable to add to this discussion. /shrug
Someone who actually knows what they're talking about.
Even with the Customer Obsession LP, it's not too hard of a stretch to arrive at a conclusion where more ads are shown. Better are worse are, in many aspects, quite subjective in these areas.
Not really. Senior ux dev at <insert crate and barrel like company> told me that they A/B tested a more efficient flow and found conversion to sale dropped. Turns out when people have to put up with more hassle to buy something they get more committed, especially for high ticket items
"Accept more defects" sounds like a statement about tradeoffs. Defects being too low could reflect that you're putting too much effort on reducing defects when that effort could be better spent on other things.
Getting rid of the long tail of defects takes a lot more effort than getting rid of the most obvious cases.
The article says “defects” is Amazon’s internal term for irrelevant junk ads and that “Mr. Bezos instructed his executives to ‘[a]ccept more defects’ because Amazon can extract billions of dollars through increased advertising despite worsening its services for customers.”
Honestly, any advertisements during/after shopping degrades the customer experience.
advertisements during search, before viewing products, upsells before or during the shopping cart, popups when buying or afterwards, and all of the above when receiving/"activating"/using your product.
I feel there is a "respectful" business model/opportunity that people will pay for, but I don't think business people stand up for things, or if they do they sell out and the monetization begins.
Target and Walmart have sure upped their game the last few years, both in UX and fulfillment. I'm shocked every time I use them (and shouldn't be at this point)
I think the main issue is that Amazon doesn't have to boost the sales of actual goods if they can make it up in ad fees.
And that situation is only stable if for some reason the vendors have to be on your site and keep advertising anyway, which is the hallmark of a monopoly adjacent situation.
Isn't "make it shittier to rake in more profit" a core value of capitalism?
I'm glad something (for now it looks a bit like a token action) is being done about monopolies and funky business structures, though. Google, Apple and Microsoft could be next, with their "using our product also forces you to use our service" practice.
WTF happened to recognition that corporations have a fiduciary duty to their shareholders to increase profit. A company website that would make people weep to return to MySpace and makes money from it is still a valid company and business process. The more I read of the FTC's complaints the less I respect their argument.
If you can both downgrade the quality of your product and boost profits, you may be a monopoly. If Amazon can charge for worse ads, use that data and learnings to undercut its sellers by better positioning its own/preferred products, and therefore make more money you can almost certainly argue it is a monopoly, which is what the FTC is trying to do.
The reason that we, as members of a society, allow corporations to exist is out of the belief that they can improve society. If your company doesn't improve society as a side effect of increasing your profits, then we have no obligation to tolerate the existence of your company.
The government allows corporations to shield their shareholders from the companies malfeasance. If I own shares in Exxon Mobil no ones going to sue me personally for damages or put me on trial because the company did something illegal. That can absolutely happen in a general partnership.
This can't be a violation of any law or ethical rules... Does anyone seriously think serving only good and relevant ads is an ethical obligation. Can't retailers accept ads from anyone without vetting for quality control.
The only thing I can think of here is FTC is trying to make a weak case that Amazon is a monopoly by claiming look they had the power to show crappy ads. Which is a weak argument.
Maybe Amazon is too big and too dominant in the market. I don't know. But this article and this aspect of the case looks weak.