“Today, Amazon terminated its planned acquisition of iRobot, manufacturer of Roomba robot vacuums, as the companies saw “no path to regulatory approval.” iRobot then announced that it would be cutting nearly one-third of its work force.
While the companies blamed regulators in the European Union for the termination, meddlesome U.S. lawmakers played their own part in souring the deal.”
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“as the companies waited on regulators, iRobot was losing money: The company took out a $200 million bridge loan in July 2023 to tie it over until the deal closed (at which point Amazon lowered its offer to account for the new debt). With the deal scuttled, Amazon will now pay a $94 million termination fee, but iRobot expects to report an operating loss of as much as $285 million for 2023.
It’s worth wondering, then, if this is what lawmakers like Warren had in mind. The FTC letter worried the merger “could harm consumers and reduce competition and innovation in the home robotics market.” But without the merger, iRobot could very well face insolvency, and nearly one-third of its work force will lose their jobs—and considering the company is based in Massachusetts, a substantial number of them may very well be Warren’s constituents.”
“The largest tropical forest on Earth, the Amazon stores more than 120 billion tons of carbon, which — if unleashed into the atmosphere — would supercharge climate change. It’s also home to a mind-boggling number of plant and animal species, many of which have served as the basis for medicines to fight ailments like cancer and hypertension.
That’s what makes this so alarming: The Amazon forest is dying. Decades of deforestation, wildfires, and rising temperatures are pushing the forest toward a critical threshold of destruction beyond which large parts of the rainforest will dry out and turn into a savanna, releasing massive quantities of carbon in the process.”
“Much of the lawsuit centers around how Amazon essentially forces third-party sellers who use its Marketplace platform — which accounts for about 60 percent of Amazon’s sales — to purchase additional services from Amazon. Amazon’s critics say the company has gotten greedier over the years, resulting in sellers having to cut their profit margins or raise prices to consumers to account for Amazon’s ever-increasing charges and fees. The FTC says that many sellers pay nearly 50 percent of their revenue to Amazon when all of the fees are combined, and those costs can be passed on to the consumer.
One way it does this, the suit says, is through search ads, which allow sellers to have their products placed prominently in customer searches, above products that organically earned a top spot. The lawsuit alleges that Amazon has increased the number of ads in search results over the years, making sellers feel that the only way potential customers will see their products at all is if they pay Amazon for ads. This makes the shopping experience worse for consumers who have to wade through them to find organic results.
“These ads have been enormously lucrative for Amazon, but shoppers face less relevant results and are steered toward more expensive products, while sellers face an additional set of fees,” Khan said.
The lawsuit also addresses Amazon’s “buy box.” When several sellers offer the same product, Amazon picks which one gets the sale when a customer clicks to make a purchase — whether “add to cart” or “buy now.” That’s the buy box. Everyone else is relegated to an “other sellers” section, which is farther down the page. Most customers don’t bother or even know to check it, which makes that buy box placement crucial for sellers.
But Amazon has certain conditions that make it more likely that the seller will get that buy box — or, if they don’t comply with them, make it impossible to get it at all. Those conditions often mean giving Amazon more money.
Qualifying for Prime is one of them, but sellers pretty much have to use Amazon’s “Fulfilled by Amazon” logistics and shipping service in order to be eligible for it. Amazon has technically allowed sellers to use other fulfillment services, but it’s exceedingly difficult for any third-party fulfillment service to meet Amazon’s requirements, and Amazon closed off enrollment to the Seller Fulfilled Prime option years ago.
A few months ago, however, Amazon announced it would re-open enrollment “later this year.” Notably, it has also changed some of these practices in the European Union recently as part of a settlement to end an antitrust case there, including adding a second buy box and allowing seller-fulfilled Prime.”
“The FTC’s complaint revolves around mundane moves by Amazon, like conspicuously asking non-Prime customers if they want to sign up or requiring Prime subscribers to click through several screens to unsubscribe.
Patrick Hedger, executive director of the Taxpayers Protection Alliance, noted that it took him under a minute and required just six clicks to cancel his Prime account—fewer clicks than it takes to submit a public comment on the FTC website.
Like many major companies, Amazon has some flaws. But the argument that it’s broadly harmful to consumers—let alone so harmful that it requires the intervention of the federal government—is so far removed from reality that only government bureaucrats with an ax to grind could make it with straight faces. (In fact, Amazon routinely garners extremely high favorability ratings in consumer polls.)”
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“During the checkout process, in some cases, “the option to purchase items on Amazon without subscribing to Prime was more difficult for consumers to locate,” states the FTC press release—as if it’s Amazon’s fault that some consumers might be a little less observant or tech-savvy. The option is not hidden, mind you; plenty of non-Prime members find it and purchase items without joining Prime. But they may have to spend an extra second or two looking—and the government is making a federal case out of it.”
“year after year, satellites that monitor changes in forest cover find the same thing: The Amazon is shrinking. Between August 1, 2018, and July 31, 2021, more than 34,000 square km (8.4 million acres) disappeared from the Brazilian Amazon. That’s an area larger than the entire nation of Belgium, and a 52 percent increase compared to the previous three years.”
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“In a cattle laundering scheme, ranchers move cattle from “dirty” ranches, which contribute to deforestation, to ranches that are “clean,” with no recent forest loss. By the time those cattle arrive at slaughterhouses, the path they’ve taken is obscured, as is the damage they’ve caused.”
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“Most major meatpackers and slaughterhouses — which influence the entire beef supply chain — screen the cattle they buy for deforestation. Ranchers that sell to them, known as direct suppliers, provide the location of their farms. And the meatpacking companies hire consultants to check those locations for any recent forest loss, using data collected by satellites.
But this screening process misses a lot — perhaps even the majority of deforestation in the beef supply chain — undermining the integrity of their zero-deforestation pledges.”
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“according to decade-old agreements, major meatpackers in Brazil can only buy clean cattle: cows that come from land without any recent deforestation. The problem is, there are several ways to make cattle look clean, even when they’re not.
The most common way is pretty simple and takes advantage of the complex beef supply chain. A single cow could travel through as many as 10 farms before it’s ultimately killed; it might be born on one, reared on another, and fattened on a third, all before reaching a slaughterhouse.”
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“slaughterhouses only tend to assess their direct suppliers, the last stop on the cow’s journey.”
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“If small teams of outside researchers can pinpoint the source of forest loss along supply chains, it seems as though giant corporations should be able to as well. Remember, it has been more than 10 years since they committed to source clean cattle.
While some experts fault meatpackers for not doing more, rooting out forest loss among indirect suppliers is actually quite challenging. Researchers at the University of Wisconsin, who first figured out how to do this, spent years developing computer programs to download records stored in clunky government systems. They then have to clean them up, link key bits of data together, and run the analysis.
These records are not designed to make cattle supply chains traceable, they just happen to serve that function if you know what you’re doing. “It requires a lot of computational expertise,” Brandão said. It’s not like meatpacking companies are just ignoring deforestation right in front of their eyes.”
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“there isn’t a huge incentive for meatpacking companies to solve this problem in the first place, some experts say. If they choose not to buy from any ranches linked to deforestation, they’ll have a much smaller supply”
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“Ultimately, to put an end to cattle laundering, meat companies would need to monitor the movement of individual cows, Gibbs said. “If we wanted to end laundering, we would need animal-level traceability,” Gibbs said. “Until we keep track of the individual animals, some level of laundering will keep happening.””
“Note, however, the bill stipulates that it only covers firms that are over the $600 billion line “as of the date of enactment.” In other words, if a company has a market cap under $600 billion on the day the bill becomes law, then that company is permanently exempt—even if it later crosses the threshold.
Two companies that are currently under the $600 billion line and thus exempt from the bill are mega-retailers Target and Walmart. These companies are both worth hundreds of billions of dollars, and their e-commerce platforms are growing at a faster rate than Amazon’s. But under the Klobuchar/Cotton law, it wouldn’t matter if Target and Walmart overtake Amazon—they would be immune from this new antitrust action, as long as they are small enough on the day the bill is signed.
Readers may be interested to note that Target is headquartered in Minneapolis, Minnesota. Walmart is headquartered in Bentonville, Arkansas. Isn’t that interesting? It’s probably just a coincidence that the $600-billion-at-date-of-enactment provision would shield the two most important companies in Klobuchar and Cotton’s home states.”
“Ocasio-Cortez is wrong that Amazon—and by extension, Bezos—has profited primarily by abusing its market power or engaging in anti-competitive practices. Bezos is so wealthy because, over the better part of three decades, he built a company that could successfully deliver a wide array of consumer goods to customers in just a few days flat, serving 300 million people annually (with 150 million of those customers deciding Amazon’s services are so valuable that they choose to pay for an annual Prime membership). Bezos and other Amazon executives built a company that could survive the dot-com bubble, the subprime mortgage crisis, and a pandemic.”
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“Amazon has about 40.4 percent e-commerce retail market share. That’s a healthy chunk, but consumers have other choices: Walmart’s sales comprise 7.1 percent of total U.S. e-commerce retail; Target, Wish, and other big-box retailers also ship directly to consumers. More people choose Amazon over competitors because it has more stuff and its click-to-ship speeds are half that of its competitors.”
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“customers always have the option of seeking out brick-and-mortar retail equivalents—it’s just that many of them choose not to, prioritizing convenience (and, in a pandemic, safety) over the fluorescent glory of in-person big-box shopping.”
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“”The idea that consumers choose to use products not because they’re useful but because Big Tech companies have somehow tricked or pressured them into it is deeply embedded…in the new antitrust crusade more generally,” she writes. “It’s a form of consumer false consciousness in which end users don’t know what they want (but members of Congress, of course, do).””
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“Amazon warehouse working conditions are sometimes quite bad, with employees getting so little time for breaks that they cannot use the restroom or take time off-task. Amazon workers have been denied pregnancy accommodations and adequate sick leave, and warehouses have been hit hard by the pandemic. However, her claims that Amazon engages in union-busting are unfounded (warehouse workers in Alabama actually voted against unionization), and the criticisms she leveled at Bezos yesterday have been par for the course for someone who calls Amazon’s lower-skilled jobs “scams” while rabblerousing for the cause of wealth redistribution. What’s more, Bezos has acknowledged reports about warehouse working conditions and has pledged to make changes.
Over the course of the pandemic, Bezos’ net worth has increased by about $70 billion. But despite Ocasio-Cortez’s objections, his vast increase in wealth has been the result of making millions of people better off.”