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Point-Counterpoint: Amazon Responds at Length to a New York Times Critique

25 June 2019

From Publishing Perspectives:

A robust response has been created by Amazon to David Streitfeld’s extensive examination of counterfeit books on the retail platform, an article published on Sunday (June 23) at The New York Times.

Streitfeld is an experienced observer of Amazon, and his Sunday article asserts, in part, that the retailer “takes a hands-off approach to what goes on in its bookstore, never checking the authenticity, much less the quality, of what it sells. It does not oversee the sellers who have flocked to its site in any organized way. That has resulted in a kind of lawlessness,” Streitfeld writes.

“Publishers, writers and groups such as the Authors Guild said counterfeiting of books on Amazon had surged. The company has been reactive rather than proactive in dealing with the issue, they said, often taking action only when a buyer complains. Many times, they added, there is nowhere to appeal and their only recourse is to integrate even more closely with Amazon.”

Amazon’s retort—which we’ll explain more fully below—is summed up in this sentence: “Nothing could be further from the truth.”

Nevertheless, a growing level of concern among some in the publishing community was confirmed a bit more than a year ago, when the Authors Guild—the United States’ chief advocacy organization for writers (both trade and independent)—announced it had arranged “a procedure with Amazon for resolving authors’ complaints with their Amazon book listings.” Even then, the Guild made a reference to counterfeit books as one of the hurdles it might handle, writing to its membership, “It is especially important that you let Amazon know when resellers are marking books as new that do not qualify as new under Amazon’s definition, or when you see infringing or counterfeit copies of books being sold on Amazon.”

. . . .

“While Amazon publicly says it has a ‘zero tolerance’ policy for counterfeit products and has built new technology to deal with the problem, its marketplace that allows third-party merchants [to] sell goods continues to be plagued by knockoffs.”

In short, the presence of third-party sellers on the retailer’s platform carries with it a serious challenge in quality control, and anecdotal incidents of wrongdoing such as those cited by Streitfeld tend to loom large when an operation is as vast as Seattle’s.

And the context in which the discussion now is taking place is worth considering. As recently announced, the Federal Trade Commission is to look at Amazon and Facebook, while the Justice Department is to examine Apple and Google, investigating practices that could potentially be ruled anti-competitive.

. . . .

Since the appearance of the Streitfeld article, Amazon has issued a lengthy statement of its own, “Our Response to The New York Times’ Story on Book Counterfeiting,” also dated June 23. Written without a byline, it’s on the company’s DayOne blog site in the “Books and Authors” category. At several points, it directly counters certain parts of the Times article.

One of the Amazon statement’s last points is a response to what the retailer says is the Times piece’s “inaccurate claims about competition among booksellers (a claim the Midwest Independent Booksellers disputed with the Times last year). There is widespread competition among booksellers, from major retailers to independent booksellers to grocery [stores] and drugstores. In fact, according to the American Booksellers Association (a trade group representing independent booksellers), the number of independent booksellers in the US has grown over 50 percent over the last 10 years.”

. . . .

“A recent New York Times article,” the Amazon statement opens, “claims that Amazon doesn’t care about counterfeits and takes a hands-off approach to what is sold in our stores. Nothing could be further from the truth.

“We invest substantial amounts of time and resources to protect our customers from counterfeit products, including books. We also stand behind every product sold in our stores with our A-to-z Guarantee [which promises consumers full refunds for products not received or not as advertised].

“Amazon strictly prohibits the sale of counterfeit products,” the statement says. “We invest heavily in prevention and take proactive steps to drive counterfeits in our stores to zero. In 2018 alone, we invested over $400 million in personnel and tools built on machine learning and data science to protect our customers from fraud and abuse in our stores.

“From the moment a third party attempts to register a selling account, our proprietary technology begins screening and analyzing during the account set-up process, blocking suspicious bad actors before they are able to register or publish a listing. In 2018, we stopped over a million suspected bad actors from opening Amazon selling accounts before they published a single listing for sale, and we blocked more than 3 billion suspected bad listings before they were published to our stores.”

The statement adds, “We provided many of these details to the Times and they chose not to include these facts in their story.”

And Amazon’s article then goes on to respond directly at several levels to Streitfeld’s story. For example, the Times piece looks at a case in which The Sanford Guide to Antimicrobial Therapy, a medical handbook, was so ineptly counterfeited that some of its information—important to medical practitioners’ treatment of patients—became hard to read.

“We’ve worked closely with Sanford Publishing,” the Amazon statement reads, “and took additional action in November 2018 to address their concerns. Since these measures were put into place, the publisher has not submitted any further notices of infringement.”

. . . .

And it highlights four programs as part of its consumer protection activity:

  • Brand Registry, Amazon says, has a membership of more than 130,000 brands and has seen a 99-percent drop in suspected infringements
  • Transparency, the program that uses a mobile app to scan a code for product authenticity, has more than 2,000 enrollees, says Amazon
  • Project Zero is a “self-service counterfeit removal tool” from which, Amazon says, its own systems learn to prevent new infractions
  • And the A-to-z Guarantee is the refund promise the retailer offers its consumers

Of course, Streitfeld’s accounts of counterfeited writings are compelling, particularly a case in which a book about Atari technology of the 1980s was stolen, given a new cover, title, and a fake author’s name—though the counterfeiter kept the actual author’s “biographical details about being the editor of ExtremeTech.com and writing for PC Magazine and Popular Science.”

. . . .

The original article is a deep, layered essay. And the retailer’s retort is a full-throated defense of itself. The company is speaking its corporate mind, just as Streitfeld and authors and publishers speak theirs. A debate in the open beats snarls in the shadows every time.

Link to the rest at Publishing Perspectives

Goodness!

“Atari technology of the 1980s”!!!

“The Guide to Antimicrobial Therapy”!!!!

Piracy on Amazon is costing publishers billions of dollars every minute!!

Where will this ever end?!?!

PG did note one item in the OP that he thought required a bit of editing for accuracy (he’s noted his changes):

The original article is a deep, layered essay. And the retailer’s [Amazon’s] retort is a full-throated defense of itself. The company is speaking its corporate mind, just as The New York Times Company (see below), Streitfeld, and authors and publishers who regularly purchase advertising in The New York Times, speak theirs. A debate in the open beats snarls in the shadows every time.

Fixed it!

In case you were wondering, following is a list of assets owned by The [completely unbiased] New York Times Company (per Wikipedia)

Media Properties

  • The New York Times
  • The New York Times International Edition
  • The New York Times International Weekly
  • T: The New York Times Style Magazine
  • The New York Times Book Review
  • The New York Times Magazine
  • The New York Times News Service & Syndicate
  • NYTimes.com
  • TimesDigest

Other Properties (related to The New York Times brand)

  • Times Books
  • T Brand StudioThe New York Times Idea Lab
  • Times Wine Club
  • Times Film Club
  • Times Journeys
  • NYTLiveThe New York Times Thought Leadership Conferences
  • The New York Times Travel Show
  • TimesTalks
  • Live Read
  • The School of The New York Times
  • The New York Times Store
  • TheTimesCenter

Other Assets

  • Wirecutter
  • HelloSociety
  • Fake Love
  • Blogrunner
  • Abuzz Technologies
  • Joint Ventures
  • Donohue Malbaie, Inc. (49%) with Abitibi-Consolidated
  • The New York Times Building (58%) with Forest City Ratner Companies

Investments

Investment portfolio as of January 2017:

  • Atlas Obscura
  • Automattic
  • Betaworks
  • Blendle
  • Dynamic Yield
  • Enigma
  • Federated Media Publishing (FMP)
  • Heleo
  • The History Project
  • Keep Holdings
  • Keywee
  • Panjo
  • Seen
  • theSkimm

And let’s not forget the largest shareholder of The New York Times Company, Carlos Slim, according to Forbes, the fifth richest person in the world (per Wikipedia):

On January 20, 2009, The New York Times reported that its parent company, The New York Times Company, had reached an agreement to borrow $250 million from Carlos Slim, a Mexican billionaire “to help the newspaper company finance its businesses”. The New York Times Company later repaid that loan ahead of schedule. Since then, Slim has bought large quantities of the company’s Class A shares, which are available for purchase by the public and offer less control over the company than Class B shares, which are privately held. Slim’s investments in the company included large purchases of Class A shares in 2011, when he increased his stake in the company to 8.1% of Class A shares, and again in 2015, when he exercised stock options—acquired as part of a repayment plan on the 2009 loan—to purchase 15.9 million Class A shares, making him the largest shareholder. As of March 7, 2016, Slim owned 17.4% of the company’s Class A shares, according to annual filings submitted by the company. While Slim is the largest shareholder in the company, his investment only allows him to vote only for Class A directors, a third of the company’s board.

Here’s what a newspaper not owned by Carlos Slim wrote about him in January, 2019.

From The Guardian:

While every lurid revelation of the [Joaquín] Guzmán [the Sinaloa cartel boss] trial has been breathlessly noted, the power of this mafia [the political and economic elite, which he {Mexican President López Obrador} calls “la mafia del poder” – the power mafia] has gone largely unremarked. The group is dominated by a dozen or so oligarchs and their families, who have a lock on such key economic sectors as telecommunications, media, mining and banking. Repeated forecasts of rapid development for Mexico have come to naught due to the suffocating hold that this small circle of super-connected individuals continues to have over its economy; by eliminating competition, they can keep prices high and profits surging.

At the center of the power elite is Carlos Slim. His estimated net worth of about $60bn places him seventh on Forbes’s international rich list. This one man’s wealth is equivalent to more than 5% of Mexico’s GDP. The core of his empire is América Móvil, Latin America’s largest mobile phone company; its longtime domination of Mexico’s telecommunications industry has kept the nation’s phone rates among the highest in the world, costing the economy an estimated $25bn a year.

Slim also owns nearly 17% of the New York Times, making him its largest shareholder. Like other American news organizations, the Times rarely writes about him and the ways in which he and other Mexican oligarchs have used their power to stymie the tax policies, public investments and income transfers needed to enable more Mexicans to enjoy the type of comfortable middle-class life depicted in Roma, the recent acclaimed film set in Mexico City in the early 1970s.

Link to the rest at The Guardian

In case you were wondering about the largest shareholders of Amazon, this is from Investopedia:

Jeff Bezos

The number-one shareholder in the company is Amazon’s chief executive officer (CEO) and founder, Jeff Bezos. Bezos was born in 1964 in Albuquerque, New Mexico and studied computer science and electrical engineering at Princeton University. Upon graduating, Bezos went to work for the Wall Street firm D.E. Shaw, becoming the youngest senior vice president in its history. He left the company and started Amazon in 1994, initially setting up the company in his garage in Seattle. After Bezos and a few employees wrote the software for Amazon, the company began to make $20,000 per week, selling products in 45 different countries. As of Bezos’ most recent filing with the SEC on August 14, 2018, the Amazon CEO owned 78.88 million shares of the company.

In September 2000, Bezos founded an aerospace manufacturer and spaceflight company called Blue Origin. In 2013, Bezos paid $250 million for the Washington Post. On July 27, 2017, Jeff Bezos surpassed Bill Gates as the world’s richest man with a net worth of over $124 billion. As of early 2019, he is worth $131.4 billion according to Forbes.

Andrew R. Jassy

Andrew R. Jassy is the CEO of Amazon Web Services, a subsidiary of Amazon that offers various cloud computing services across the globe. Before Jassy became the CEO of Amazon Web Services on April 13, 2016, he served as senior vice president of the group. With a team of 57 people, Jassy founded Amazon Web Services in 2003. According to an August 15, 2018 filing with the SEC, Andrew R. Jassy is Amazon’s second-largest individual shareholder, with a reported 91,231 shares of the company.

Jassy attended Harvard University, earning a bachelor’s degree and master’s of business administration (MBA). Prior to joining Amazon, Jassy worked at Coupa Software Inc. and founded a marketing consulting company, serving as its manager.

Jeffrey Wilke

Jeffrey Wilke has been the CEO Worldwide Consumer for Amazon since April 2016. Wilke joined Amazon in 1999 as vice-president and general manager and served as the senior vice-president for the consumer business prior to his current role. Wilke’s 60,040 shares of Amazon make him the company’s third-largest shareholder, according to an SEC filing on September 12, 2018. The CEO Worldwide Consumer holds 50,040 of those shares indirectly through a trust.

Wilke holds a BSE degree in Chemical Engineering from Princeton University and underwent graduate studies at MIT’s Leaders for Global Operations (formerly Leaders for Manufacturing) program.

Jeffrey M. Blackburn

Jeffrey M. Blackburn is the senior vice president of business development and digital entertainment of Amazon.com and has been at the company since 1998. Blackburn is also the head of Amazon’s M&A, investments and strategic business development worldwide. Prior to joining Amazon, he was an associate at both Deutsche Bank and Morgan Stanley in Silicon Valley. At Deutsche, he worked on Amazon’s IPO. Blackburn holds 62,874 shares of Amazon according to an August 29, 2018 filing with the SEC. Of those shares, 42,874 are held directly and 20,000 are held indirectly through a trust.

Wilke earned his undergraduate degree from Dartmouth College and his MBA from Stanford University.

PG notes a distinct lack of any express or implied connection to la mafia del poder, Carlos Slim or the Sinaloa cartel among Amazon’s largest shareholders.

Amazon

7 Comments to “Point-Counterpoint: Amazon Responds at Length to a New York Times Critique”

  1. Terrence OBrien

    I don’t know if the NYT quantified the problems it alleges. Without knowing the extent of a phenomenon, it’s hard to say if it is a problem.

    How many books are on Amazon? What percentage of them are bogus? How many bogus books are eliminated by Amazon?

    • You forget to wonder how many bogus best sellers have made the NYT best seller lists.

      If their lists can be bought then it’s no stretch that their stories can be too. (And since the NYT has always had a heavy case of ADS … 😉 )

  2. Fully expecting next time you run a piece by the Wall Street Journal you fully explore the Journal’s corporate ownership, investments and connections. I’d take Carlos Slim to Rupert Murdoch any day.

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