Connect with us

Technology

The Guardian view on Amazon’s dominance: we have to make different choices | Editorial | Opinion

Published

on

It was hard to miss the fact that Amazon Prime had a sale this week. Newspapers and magazines covered the event as a celebration of consumption. This on top of a coronavirus pandemic that has accelerated the collapse of already struggling bricks-and-mortar retailers.

It is not surprising that so many of us shop with Amazon. The prices seem low. Purchases arrive promptly. But an examination of this gift horse’s mouth also raises serious concerns. Even before the pandemic Amazon’s aggressive pricing strategies made it difficult for smaller companies to compete. This is exacerbated by the fact that the company does not pay enough back to the state. In 2018 it paid £14.3m in corporation tax on £13.7bn in UK revenues. Without shops on the high street, it pays less in business rates than more traditional competitors such as Tesco.

It is an intolerable situation that a company that depends on the public services run by the state does not pay an appropriate level of taxes. To add insult to injury, this week it was reported that Amazon will also not be paying Britain’s new digital services tax because the US won’t do a trade deal if the UK were to impose such a levy. Instead small traders and advertisers using the site will be taxed. The issue is one of fairness, and making sure big tech is taxed properly needs urgent government attention.

Amazon has been one of the rare companies to take on new workers during the pandemic, but its employment practices need close scrutiny. A comprehensive new report published by the Trades Union Congress describes 10-hour working days, with 300 items picked and packed each hour, and workers penalised or even sacked for not keeping up. It describes a culture of fear, and notes that ambulances have been called to Amazon warehouses in Britain 600 times in three years. Drivers are thought to deliver 200 parcels a day; they are also self-employed, meaning Amazon is not liable if anything goes wrong. This pressure has only increased with Covid-19, and reports have emerged of inadequate social distancing and a lack of PPE. This week the company confirmed a Covid-19 outbreak at its Coventry plant. By contrast Jeff Bezos, the founder and chief executive of Amazon, saw his wealth increase by $74bn this year. This is wrong on so many levels.

A report by the New Economics Foundation (NEF) earlier this year found big tech pushing to use a World Trade Organization e-commerce agreement “to tighten their grip on the global economy and squeeze yet more out of consumers and working people”. Control of data is at the heart of the WTO proposals, and through that control of data, companies like Amazon, say NEF, would reach new heights. Recently, Amazon’s use of data to track consumer shopping habits and preferences suggests that investors are not wrong to bet it will be one of the world’s top 10 food retailers within a decade.

Amazon’s dominance means it already has too much sway in many marketplaces. This is a matter of political choice. We have to make different choices. The bigger Amazon becomes, the more it will be able to manipulate the tax, data, employment and consumer regulatory frameworks to its advantage. Governments must ensure fair levels of scrutiny, taxation and competition and let Amazon be in the spotlight for all the right reasons.


Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Technology

India could contribute up to 20% of Amazon’s growth in next 5 years

Published

on

By

SINGAPORE — India is a small contributor to Amazon’s total sales right now, but the country may become an important growth driver for the U.S. e-commerce giant, according to tech investor Gene Munster.

Amazon scored a victory on Sunday when the company won an injunction from  an arbitrator in Singapore to temporarily halt a significant deal between two major Indian retailers: Future Retail and Reliance Industries.

Future Retail, a subsidiary of Future Group, announced in August that it will be selling its businesses in retail, wholesale, and logistics to Reliance for $3.38 billion, including debt, Reuters reported. Amazon filed a legal suit against Future Retail, alleging that the Indian retailer breached contractual provisions it agreed to in a separate deal with the U.S. tech giant, according to the news agency.

Reliance — owned by India’s richest man, Mukesh Ambani — has been making headway into India’s vast e-commerce sector which is currently dominated by Amazon and Walmart-owned Flipkart.

Amazon has a growing presence in India. The e-commerce giant has invested billions into the South Asian nation.

“When you think about Amazon and their growth profile, (they) just had wicked growth in the last six months,” Munster, who is founder and managing partner at Loup Ventures, told CNBC’s “Squawk Box Asia” on Tuesday.

“But you think about a normalized growth profile, you think about the impact of India, this could be 15% to 20% of its growth over the next five years — India could be,” he said.

Amazon saw “a part of their opportunity – a really important growth driver – some of that window starting to close” as a result of the Reliance-Future deal, the investor said. 

Amazon has announced investments of at least $6 billion in India, including a $1 billion pledge in January to help small businesses in the country. The tech giant hopes to export $10 billion worth of India-made goods around the world by 2025. 

But the company also faces regulatory hurdles in India, including antitrust probes.

Still, the injunction from the Singapore arbitrator was not automatically enforceable in India and the order would have to be ratified by an Indian court, Reuters reported.

For its part, Reliance in a statement said it “intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future (Group) without any delay.”

Reliance may potentially win the dispute over Amazon because it has more political strength in India, according to Munster. He explained that the final outcome is unlikely to have any impact on Amazon’s share price as investors do not give sufficient credit to the opportunity in India as the market contributes very little to overall sales for the e-commerce company at the moment.

“So, I think the convenient response from investors will be ‘disappointment, but it’s only 3% of revenue.’ But I think it really misses the bigger point, which is to be successful in e-commerce in India, for a U.S. company to be successful, they must partner, especially given some of the local laws,” Munster said.


Source link

Continue Reading

Technology

Microsoft search ad revenue decline: bad news for Google?

Published

on

By

Sundar Pichai, chief executive officer of Google Inc., speaks during a news conference in New Delhi, India, on Wednesday, Jan. 4, 2017.

Anindito Mukheriee | Bloomberg | Getty Images

Microsoft is forecasting a continued slowdown in its search ad revenue, which could spell bad news for Google parent-company Alphabet, which reports its earnings on Thursday. 

Microsoft‘s latest results beat across the board, but the company saw a 10% year-over-year drop in search advertising revenue, and reported continued decrease for its guidance for the next quarter, according to its first fiscal quarter earnings it released Tuesday.

For the December quarter, Microsoft CFO Amy Hood said “in search excluding TAC, we expect revenue to decline in the mid to high single digit range” during a call with Microsoft investors Tuesday. That suggests a decline of 7% to 9%.

Google’s search engine is much more widely used than Microsoft’s Bing, but the companies have shown similar trends in search advertising revenues.

Last quarter, Microsoft’s search advertising revenue, excluding traffic acquisition costs, decreased 18% as customers spent less on ads.

That was a precursor to Alphabet reporting its first year-over-year quarterly revenue decline ever.

Specifically, Google’s Q2 revenue from search and other on-site ads (minus YouTube) dropped about 10% from the year-ago quarter, from $23.64 billion to $21.32 billion. (Revenue from YouTube advertisements, which it began breaking out separately this year, grew from $3.6 billion to $3.81 billion.)

Prior to that, Microsoft’s search advertising revenue, excluding traffic acquisition costs, increased 1% in the quarter that ended Mar. 31, which overlapped with the beginning of the pandemic.

That quarter, Alphabet reported a 9% increase in revenue from search and other (minus YouTube) revenue, which jumped from $22.54 billion in 2019 to $24.50 billion in 2020.


Source link

Continue Reading

Technology

Facebook political advertisers report problems after new ad deadline

Published

on

By

Facebook founder and CEO Mark Zuckerberg in 2013. (Photo by Justin Sullivan/Getty Images)

Justin Sullivan | Getty Images

Political advertisers say they’re having trouble with ads that were already approved before Facebook began its planned blackout period for new political ads leading up to the election. 

Facebook announced last month that it would not accept new political ads the week before the Nov. 3 election, starting on Tuesday, Oct. 27. Advertisers were able to submit and run new ads until midnight Pacific Time on Monday, and are allowed to run those ads leading up to the election as long as they received at least one impression before the deadline.

For instance, President Donald Trump’s campaign has pre-loaded ads saying that Trump was “still your president,” boasting about GDP figures that haven’t been released yet, and imploring people to “vote today” with graphics reading “Election Day is Today.” Facebook said it would be removing those “vote today” ads for being against policy.

However, other advertisers are complaining about glitches in Facebook’s system. Several told CNBC they previously approved ads — either those that had run and gotten impressions then paused, or those that had been running for weeks — began to appear to have violations overnight. Protocol previously reported on the issues Tuesday afternoon.

“We are in the closing days of the most important election in our nation’s history, so it is disturbing that our clients had their already approved and running Facebook ads shut off without warning overnight,” said Mark Jablonowski, managing partner and chief technology officer at DSPolitical, a targeted ad network for Democratic campaigns and progressive causes.

“This turn of events is hardly surprising,” Jablonowski said in an email to CNBC. “Facebook and other large platforms have pursued a headline-grabbing but ill-conceived strategy of banning ads from political campaigns rather than focusing their considerable resources on fighting the spread of demonstrably false organic content that could interfere with the election.”    

Maddie Kriger, Integrated Media Director at progressive advocacy organization and super PAC Priorities USA, said the organization had made sure its messaging would fall within Facebook’s policies — making an effort to avoid “time-bound” messages to avoid flouting policy. Facebook stopped some of its ads anyway.

Kriger said Priorities had its ads set up, approved and running impressions by Friday, pausing some of the ads they wanted to run closer to the election. She said the organization’s Facebook representative said the ads followed the rules. 

But as of 12:01 Pacific Time, she said the organization’s ads started being taken down for being in violation. She said this included hundreds of ads, both those that had been created and run impressions and then paused, as well as those that had been running for weeks with hundreds of thousands of impressions. 

“Even [with] accidental errors, an error like this has a huge impact on our program and our ability to communicate to voters,” she said. “It’s really unacceptable at this stage of the election. It’s just such high stakes that 12 hours in a week left situation is a real loss.”

Facebook director of product management Rob Leathern addressed the issues in a tweet Tuesday afternoon.

“We’re investigating the issues of some ads being paused incorrectly, and some advertisers having trouble making changes to their campaigns,” he wrote. “We’re working quickly on these fixes, and will share an update once they are resolved.”



Source link

Continue Reading

Breaking News

Shares