Markets in everything

I am surprised issues of this kind have taken so long to surface:

Amazon is investigating claims that employees accepted bribes to disclose confidential data that would give sellers that use its marketplace a competitive advantage. The company confirmed the investigation following a report in the Wall Street Journal that Amazon employees, working through brokers, have sold internal sales data, the email addresses of product reviewers, and the ability to delete negative reviews and restore banned accounts. “We are conducting a thorough investigation of these claims,” an Amazon spokeswoman said.

These practices seem to be a particular problem in China, though not only.  Here is more from Shannon Bond at the FT.  Here is further coverage at Verge: “The WSJ also reports that it costs roughly $300 to take down a bad review, with brokers “[demanding] a five-review minimum” per transaction.”

Comments

.... same old Principal-Agent & Moral-Hazard issues in economics

Whom Do You Trust ?

nothing unique to Amazon in this

how well do you think the Federal IRS and NSA protect your personal data ? And government officials absolutely can not be bought or influenced by private money (?)

My guess is both Irs and Nsa have more security, larger investigative units, and harsher punishments than consumer firms like amazon or banks/credit.

Steal from the nsa for example, and you’ll end up doing a couple dimes in solitary

I’m truly impressed that nobody at the IRS has leaked President Trump’s tax returns yet.

I recall an incident about ten years ago where some celebrity’s tax return was leaked. The perp was fired and probably eventually received jail time, but there are probably lots of people who would consider that a bargain. I imagine controls to have been put into place that prevent small numbers of IRS employees from doing things like this, even if they would be willing to pay the price.

I am imagining the procedural equivalent of the fact that two missileers have to turn their keys simultaneously to launch their ICBM.

-dk

I always thought that about the Federal Reserve as well. During the cold war, people risked their lives selling secrets for money, why wouldnt someone risk some jail time to provide some inside intel on what the fed is going to do?

Jail time? For leaking inside information to banks?

Lol, that's been legalized.

https://theintercept.com/2017/04/07/a-federal-reserve-bank-ignored-insider-trading-investigation-when-reappointing-its-president/

But please, don't let this shake your faith in Bezos' ability to run the Washington Post, or indeed Google/Facebook's ability to purge the world of doubleplusungood-think.

Massive lefty behemoths always have your best interests in mind.

It’s a topsy turvey world indeed, when massive monopoly corporations selling manufactured goods made by exploited peasant labor and processed by low pay nonunion labor is described as leftist

Most of your descriptors are wrong, for what it's worth

Without an actual rebuttal, it’s worth very little indeed

as an investor, Bezos's intense methodology once proves that Hortense gabel was the most corrupt judge of her time.

If companies had no people, problem solved.

I feel like you're not keeping up with the latest events in AI.

If employees are fully monitored at all times of day, problem solved

What if the monitors are bribed?

What if the monitors are AI

Quis custodiet ipsos custodes?

Where the monumental bill of charges,
in final arbitration, totals zero.
When a strong man armed keeps his palace, his goods are in peace.

I am curious how brokers can remove neg reviews? What do they have access to?

Oh wait, the brokers sell access to the employees. I get it

On a recent transaction with Amazon, I thought I purchased 2 hard drives at a very good price. In reality, I was being scammed. The tracking information provided was fraudulent, and looking at the timestamps showed that information regarding this parcel was transmitted to the shipping company before my online purchase. It also went to a different city.

First, I got slightly nervous, because amazon online info said delivered, but I couldn't find the parcel. Then after checking tracking info, it was delivered in a different city not matching any of my shipping addresses.

When checking the merchant, I noticed 99% of the reviews of the last 30, 60 and 90 days were bad. Obvious fraud! I had E-mailed the merchant twice with no reply, so at this point I bypassed the regular dispute process, and told the Amazon rep on the phone that they were facilitating fraud. They expedited the complaint, and approved it within 5 minutes of me hanging up and I got my money back. However, I had 2 major complaints:

1. If Amazon held enough of new merchants money in escrow, they would be in a position to force performance of the implied contract, by buying the identical product from a non fraudulent merchant, and paying with the price difference with the escrow funds. I asked specifically for this, and the customer service person was unwilling (possibly also unable) to charge the fraudster enough to perform his part of the bargain.

2. They failed to detect this fraud had been going on for 3+ months! Why is that? Are they benefiting? Or have they turned into a social justice company, and the retail business is on autopilot?

It is known that Amazon makes tons of money from the cloud business. Also, they do have some CIA contracts. Some people in the Alt-right/anti Semite community believe Amazon gets the lion's share of the DOD black budgets, and told me Amazon gets tens of Billions from CIA. These are the same nuts that belive we could solve the budget whole by taxing Soros enough.

https://www.theatlantic.com/technology/archive/2014/07/the-details-about-the-cias-deal-with-amazon/374632/

Do they know what's going on? Of course they do.

They claim to know when you need more toilet paper. They are certainly able to detect fraud patterns, particularly as shameless as what you describe.

Why don't they do more to prevent this proactively? Because nearly every single incentive is against them being proactive. Far better for them to deal with the small sub-set of complaints that find a way to self-escalate.

Hell, you're lucky they "answered the phone." Many business models are effectively pure caveat emptor. Basically, they don't do jack to protect you, and there is no one there to take the complaints. Credit rating firms are an example of this, iphones, and antivirus software come to mind.

All good points. You are right that Amazon is more responsive than other businesses, I am impressed that they both answered the phone, and opened a dispute, then considered in my favor in 5 minutes.

That's the reason I keep buying from them.

Given Amazon's breadth and amount and scope of user data, it's difficult to imagine they aren't overrun with spooks and government involvement. So of course, they Feds it worth their time $$

Sorry, budget hole, not budget whole!!!

I've never worked for Amazon but I've worked for a number of software companies. My experience is that there are always a lot of known problems and it's just difficult to fix every known problem. This sounds like a problem that should be high priority but without knowing the team's roadmaps and resourcing it may be reasonable that they're working on other things. Probably there's some screwy incentives to work on new stuff instead of fixing the old broken stuff but I would be amazed if there are employees at Amazon who intentionally don't fix these problems because of some sort of benefit for the company.

I'm not ordering as much from them anymore. The reviews are worse than useless.

Fakespot

The linkage between bribery or "fraud" and short-term solutions is not uncommon for ad-tech companies. Why? Because even Amazon is run democratically. It's like maltose in E.coli- when it's present, it polymerases and moves upstream in the gene. Viruses are tougher to get rid of than most think. Of course, even Kissinger and Nixon couldn't transform rotary motion into straight line motion. Their premise behind linkage, as a policy, was to connect political and military issues, thereby establishing a relationship making progress in area "A" dependent on progress in area "B."

2nd fraud this year using Amazon's environment. Remember the $500-$1000 self-published books used to get money from stolen credit-card data? https://marginalrevolution.com/marginalrevolution/2018/02/amazon-arbitrage-money-laundering-edition.html

On the other hand...."In the long term, breached companies underperformed the market. After 1 year, Share price grew 8.53% on average, but underperformed the NASDAQ by -3.7%. After 2 years, average share price rose 17.78%, but underperformed the NASDAQ by -11.35%. And after three years, average share price is up by 28.71% but down against the NASDAQ by -15.58%. It’s important to note the impact of data breaches likely diminishes over" time.https://www.comparitech.com/blog/information-security/data-breach-share-price-2018/

Fake reviews on Amazon have spawned reviews-of-reviews (e.g., https://www.fakespot.com/). Although there are not yet (as far as I know) reviews-of-reviews reviews.

BTW, Amazon (AMZN) price has doubled in the past year, and seems to be selling at a p/e of over 400 today. Isn't it time for some seriously heavy gloom-and-doom forecasting? When does AMZN hit the iceburg, and what sort of bad news would it take to crash its lofty stock price?

It's down to a P/E of 152, and that's down from infinity when they reported losses. They aren't going anywhere.

What bad news could crash the price? Maybe Seattle getting nuked?

Comments for this post are closed