‘I think it’s really kind of a sad story.’
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Andy Jassy, CEO of the biggest e-commerce store in the world, is very upset with the regulators who won’t let him buy more companies.
In January, Amazon decided it wasn’t going to buy Roomba maker iRobot for $1.4 billion, after discovering that the EU probably wouldn’t approve the deal and that the FTC had some concerns. Regulators blocked the acquisition because, Jassy told CNBC, “They worry that we’re going to feature our vacuum cleaner, the Roomba, vs. others, which of course is not our model.”
Weird that the FTC, which has filed a massive lawsuit against Amazon for alleged anticompetitive behavior, would ever even think that! Amazon would never promote its own vacuum cleaner on its site in a way that harmed competition — like, that accusation from the FTC that Amazon replaced “helpful organic search results with biased ‘widgets’ that direct shoppers to purchase Amazon’s private label products” is just bullying, I’m sure. Everyone is so nasty to Andy Jassy!
Jassy’s view is that regulators “trust these two large Chinese companies with maps of the inside of U.S. consumers’ homes more than they do Amazon, even though we’ve been an amazing steward of customer data in our retail business.”
“Amazing” is one word for it! After all, Amazon did settle a lawsuit with the FTC about its smart doorbell company Ring to the tune of $5.8 million. The complaint alleged that Ring deceived its customers about their privacy, enacting inadequate safeguards to prevent employees and contractors from getting ahold of customer videos. One employee watched “thousands of video recordings” of “intimate spaces” in female users’ homes, the complaint alleged.
Amazon bought Ring in 2018, and some parts of the FTC’s allegations predate the acquisition. But some of the alleged privacy violations occurred on Amazon’s watch. For instance, “in August 2020, a whistleblower notified Ring that between March 2018 and September 2019, a former employee had provided Ring devices to numerous individuals and then accessed their videos without their knowledge or consent,” according to the complaint. And before 2020, Ring didn’t implement “reasonable safeguards” to prevent hackers from compromising people’s accounts.
You may be wondering why Amazon bought Ring. “My view here is that we’re buying market position — not technology,” wrote then-CEO and Amazon founder Jeff Bezos in an email. Sometimes Amazon buys companies for technology or IP, but “the most common case is market position,” he said in a congressional hearing.
Jassy thinks all the FTC action is a shame. “We’re consuming a lot of time and taxpayers’ money with what we’re doing right now and I think a lot of it is outside the bounds of the law,” he says. He seems very sad that he can’t outright buy AI company Anthropic and instead has to merely partner with it. “I think we gotta be careful right now in western countries in the way that we’re handling regulation.”
