Why it’s time to blow the whistle on Amazon

Why it's time to blow the whistle on Amazon

A worker blows a whistle during strike action outside an Amazon distribution centre in Bad Hersfeld, Germany on 22 September 2014.

(Reuters/Alamy/Kai Pfaffenbach)

Amazon, as the oversimplified origin story of the Seattle-based tech juggernaut goes, was founded by Jeff Bezos in his rental home garage in 1994. Today it is one of the largest multinational corporations in the world. In January it became only the fifth company in history to reach a market capitalization of US$1 trillion, and Bezos is currently the richest man in the world, with an estimated personal fortune of US$183.6 billion. While its early growth focused on online retail, today Amazon dominates not only e-commerce, but also logistics, artificial intelligence, cloud computing and live-streaming. If you surf, stream or purchase goods online, Amazon is increasingly impossible to avoid.

Behind the rising stock prices, however, is a much darker reality. The company’s success has been built on exploiting workers, unfair competition, disregarding environmental responsibility, violating user privacy, and “aggressive” tax avoidance. While the Covid-19 pandemic has resulted in mass business closures the world over, widespread national lockdowns have only amplified the growth and profits of the US tech giant. At the end of October, the company reported a record 37 per cent increase in year-on-year quarterly sales, racking up US$96.1 billion in revenue as housebound customers flocked to Amazon’s various online services.

Meanwhile, the pandemic put Amazon’s workers under huge pressure. At the beginning of the coronavirus outbreak, when extra workers in the warehouses meant that social distancing was impossible, staff were working longer hours to meet surging demand, and workers were not provided with protective personal equipment like face masks.

“Amazon is a notoriously bad employer,” says Ron Knox, a senior researcher at the Institute for Local Self-Reliance, a US advocacy group. “It has a record of mistreating employees...and [there’s] disturbing evidence of Amazon ignoring and flouting safety protocols during the pandemic.”

In the United States alone, an estimated 19,000 Amazon workers have contracted Covid-19 and at least eight have died, prompting wildcat strikes at several warehouses across the US. In the Philippines outsourced Amazon Ring call-centre workers were forced to report to the office despite pandemic safety concerns. And warehouse workers in France, Germany, Italy, Poland and Spain have gone on strike at various points since March to demand better health and safety measures to protect them from the virus.

Now Amazon is facing increased public scrutiny. The global chorus of trade unions, civil society and policymakers calling for the company to be broken up due to its market dominance is growing louder. In the United States (where Amazon is now the second-largest private employer after Walmart) and in Europe, Amazon workers, both self-organised and with the assistance of established trade unions, have begun fighting back against exploitation, winning small but meaningful victories. However, to truly reign in the unchecked power of this sprawling conglomerate, coordinated government action is vital. “We don’t think there is any real alternative to antitrust action,” says Knox. “We need structural separation, breaking Amazon up into its various businesses.”

From start-up to a virtual monopoly

Amazon started life as an online bookstore, undercutting independent booksellers and putting many out of business. As the company grew, even established book retail chains like Borders found they couldn’t compete with Amazon. But from the very beginning, Amazon had an unfair advantage. As an e-commerce company, it was exempt from sales tax in many states until 2018, and its reliance on distant warehouses and minimum wage labour meant that its overhead costs were kept low.

From books, Amazon expanded into every retail sector, using the same asymmetrical business model to undercut independent and established retailers. In 2000, it launched Amazon Marketplace, which is meant to help independent retailers reach customers via the Amazon platform but has been branded a “dictatorship” due to its high fees and poor communication and complaints mechanisms. The company’s international expansion began that same year with operations in France and Japan. Since then, it has expanded to dozens of countries on every continent in the world, with 175 ‘fulfilment centres’ (as Amazon’s warehouses are called) and over one million employees (100,000 of which have been hired since the start of the pandemic). Amazon now controls 49.1 percent of US e-commerce sales, and 22 percent in Europe – far greater than its brick and mortar predecessors such as Wal-Mart and Carrefour ever had at their peaks.

“This kind of gatekeeping power is unprecedented in the history of American capitalism,” says Knox. “No company has ever had the power that Amazon has to dictate the rules of the market to so many other businesses.”

Amazon’s subsidiaries include brands as diverse as Ring, a home automation company, the Amazon Web Services cloud computing platform, Twitch live streaming, Annapurna Labs, which focuses on microelectronics, the newly launched Amazon Pharmacy, and dozens more. But it is Amazon’s obsession with data that is particularly worrying.

“If you think about Amazon as an e-commerce giant, that’s not really their focus. Their main thing is surveillance capitalism,” says Christy Hoffman, the general secretary of UNI Global Union, which represents over 20 million workers internationally. “Amazon owns and gathers so much data, not just data on its customers, but data on its employees, on its competitors, on all the companies that sell on its platform. Companies shouldn’t be allowed to have that much power.”

Unions, robots, taxes and environmental impact

Amazon’s growth has come at a great cost to its workers. It has always been reliant on low-wage workers in warehouses and logistics, many of whom are temporary, part-time or seasonal workers. According to a report produced following the first-ever global symposium on challenging Amazon’s power, hosted by UNI Global Union and the International Trade Union Confederation in December 2019, “Amazon’s opposition to unions means that there is virtually no comprehensive bargaining agreement anywhere in the world,” for its frontline workers. For example, none of Amazon’s US warehouse or logistics operations are unionised, and it has shown active antagonism towards any attempts to do so, including using technology to surveil and monitor efforts. “We are alarmed about the growing evidence that Amazon is not respecting, and even undermining, the rights of workers to organise,” says Joe Westby, a researcher on corporations and human rights at Amnesty International.

There are also widespread safety and health violations in fulfilment centres, ranging from serious physical injuries to worker stress linked to production targets. In 2019, Reveal published a detailed investigation into Amazon’s safety record and found that the injury rate at Amazon’s warehouses was more than double the national industry average. Reporters also found that injuries spiked around special events like Prime Day or Black Friday, driven by increased demand on workers, including mandatory 12-hour shifts. Technology – specifically the use of hundreds of thousands of robot vehicles to work alongside humans in fulfilment centres – has only worsened the situation.

“The introduction of robots has made the work so much more dangerous. The robots speed up the pace so much, and there is a lot of repetitive motion involved. The sick rate and accident rate has soared,” says Hoffman.

“The technology makes it so that you can’t even have five seconds off in-between packages. It’s just relentless, and that’s owing to the ability of the technology to time everything down to the nanosecond.”

In addition to labour rights violations, another major threat posed by the Amazon business model relates to tax. Part of the reason for Amazon’s massive growth – and Bezos’ immense personal wealth – is tax avoidance. In the US, Amazon didn’t pay any federal taxes in 2017 and 2018, despite receiving hundreds of millions of dollars in tax credits. The situation didn’t change much last year, when the company paid a paltry 1.2 per cent tax on its massive profits. In Europe, it is estimated that Amazon avoided €250 million in income tax between 2006 and 2014.

A study released by the campaign group Fair Tax Mark named Amazon as the worst of the big tech tax avoiders. In the context of soaring pandemic-related profits, and with the coffers of governments everywhere drained by the increased demand for critical public services for the very same reason, the need for urgent tax reform has never been clearer. “Amazon has seen an exponential increase in its profits during the pandemic,” says David Archer, head of participation and public services at ActionAid, which is currently campaigning for a standard global tax on all large corporations. “Any global tax reforms should ensure that Amazon and all other multinationals pay fair tax in the countries where they have operations.”

Another concern is Amazon’s environmental impact. Even compared to other tech companies, Amazon has lagged on climate and sustainability. For years, it never produced a yearly corporate sustainability report and it refused to release any emissions data. When it finally did so last year, Amazon disclosed that in 2018 it emitted 44.4 million metric tons of carbon dioxide – the equivalent of the annual emissions of Norway. It’s data centres consume huge amounts of energy – according to the UNI Global/ITUC symposium report, a new Amazon data centre in Ireland could potentially use four per cent of the country’s entire electricity supply. And its Prime delivery service has produced millions of pieces of additional cardboard and plastic packaging – much of which isn’t recycled.

“Amazon has never been under so much pressure”

For now, Amazon’s dominance is concentrated in a few key markets. In 2019, more than two-thirds of its revenue came from the US, with its second largest market, Germany, in distant second. But Amazon’s international growth has been strong in recent years, and it has plans to replicate its North American success in emerging economies. “As Amazon expands to more countries, it is critical for those states to ensure that they have strong laws in place in line with international human rights and labour standards,” warns Westby.

There have been positive developments on this front, with some countries passing laws and regulations that could limit Amazon’s impact on local economies. For example, India has restricted Amazon’s ability to both operate a marketplace and sell goods directly, putting a dent on its expansion plans there. “It seems that the world has quickly caught on to the way Amazon does business, their predatory practices, and the harm that the company can cause to an economy and the small business marketplace,” says Knox.

The past few years has also seen an upswell of both trade union and grassroots efforts to stand up to Amazon.

In Europe, with its stronger unions and commitment to collective bargaining, “unions have engaged Amazon to push for better conditions, and they have been able to win some improvement for their members,” says Hoffman. This includes Italian workers going on strike to win short breaks, and trade unions forcing French courts to limit sales during the pandemic to essential products.

Labour laws in the US have made union-led efforts challenging, but even there, communities and workers groups have been playing an important role. Athena is a coalition of 50 local and national groups that brings together workers and communities negatively impacted by Amazon. An informal group calling itself Amazonians United for PTO, was central to the company’s announcement in March that it would provide paid time off for all US workers. And Amazon Workers International is an informal, transnational network of predominantly warehouse workers in the US and EU.

“All kinds of communities are waking up to the fact that Amazon will come in and bleed them dry,” says Hoffman. “Unions, plus a lot of other worker and community organisations, have brought these issues to the forefront. Amazon has never felt as much pressure, both nationally and globally, as it is under now.”

A call for antitrust action

This has led to Amazon making moves that would have been unthinkable even a few years ago, such as implementing a US$15 hourly wage for all US workers. But on key issues, such as union representation and collective bargaining rights for its workers, Amazon remains unmoved. By contrast, the vast majority of Amazon’s wealth still flows into the pockets of just one person (Bezos owns an 11.2 per cent stake in Amazon), to an increasingly absurd level. “Bezos’ personal wealth increased [so much this year] that he could pay all of his 875,000 workers US$105,000 each, and he would still have the same wealth he had pre-pandemic,” says Hoffman.

Amazon’s unprecedented power, and its lack of accountability when it comes to workers’ rights, wage equality, sustainability and safety, has led many to believe that the ultimate solution lies in the hands of governments, which must regulate the e-commerce and technology sectors for unfair competition.

There’s even potential for antitrust action in Amazon’s home market. In early October, the US House of Representatives’ Judiciary Antitrust Subcommittee released a report as part of a 15-month inquiry into the tech industry – and recommended that Amazon be subject to being split up, or other anti-monopoly measures.

“The report that came out of the subcommittee could not have been clearer in describing the harms that Amazon has caused rival businesses, consumers, workers and the economy as a whole,” says Knox. “The fact that that report was so strong gives me hope that the new Congress will take up the findings and pass legislation that would make a lot of its recommendations happen, and embolden the antitrust agencies to take more aggressive actions again Amazon and other tech companies.”

If not the US, government action could come from other jurisdictions. Canada’s Competition Bureau has opened up an investigation, as has the European Commission, the latter of which could result in fines of up to 10 per cent of Amazon’s global profits. Some countries have already acted; in September, Japan’s Fair Trade Commission forced Amazon to accept penalties for violating domestic antitrust laws. Due to the coronavirus pandemic, 2020 might be considered the year that Amazon ‘won the internet’, but if governments commit to take decisive action, 2021 could be the year when workers, consumers and communities reclaim their power from a tech behemoth.