Amazon’s 2019 challenges include Donald Trump, HQ2 protesters

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After a year of anticipation, Amazon last month announced its winners for two new, 25,000-employee campuses and was summarily met with a flood of derision and mockery. There was even a protest in Queens, where one of the offices will go, with people lambasting the billions of dollars in incentives Amazon will receive for the projects.

That backlash was the most heated criticism Amazon faced all year. But it was nothing compared with the roasting Facebook and Google sustained throughout 2018. Cascading scandals have stung Facebook, while Google took flak over a pilot project that could bring a censored search engine to China, its handling of executives accused of sexual harassment and its work to create AI tools for the military.

This year has brought with it plenty of pointed criticism about the tech industry, but only a few leading tech companies bore the brunt of these complaints. As consumers re-evaluate tech’s negative impacts, from social media’s influence on elections to the mountains of data tech companies vacuum up about their users, the potential for Amazon — and fellow tech behemoths Apple and Microsoft — to face the same level of scrutiny is greater than it has been in years.

Amazon in 2019 is a big and obvious target. It’s embarking on two massive corporate office projects, nicknamed HQ2, and CEO Jeff Bezos is now the world’s richest person. That high-wattage profile puts the company in the sights of unions seeking to improve worker benefits, politicians wanting to champion mom-and-pop businesses and privacy advocates looking to raise concerns about Amazon’s data-gathering capabilities.

Despite lots of criticism about Amazon already, the company’s public reputation remains strong and its business is humming along nicely. This Cyber Monday was again Amazon’s biggest sales day ever, breaking a prior record set in July on Prime Day. Even if consumers start moving away from Amazon from fear of potential misuse of data or complaints about warehouse conditions, an exodus is unlikely to happen overnight.

‘I think there’s lower potential for them to get themselves in trouble,’ Wedbush analyst Michael Pachter said about the risk of data scandal at Amazon, adding that the company maintains less personal information about customers than Facebook and Google. ‘I would be surprised if they used information in a way that customers felt violated.’

Amazon didn’t respond to a request for comment for this story.

Let’s run through a few of the potential pitfalls Amazon faces going into the new year:

HQ2

Amazon has quickly acquired a lot of critics over its new HQ2 campus in Long Island City, in New York’s Queens borough. The project is expected to bring 25,000 new jobs and a $2.5 billion investment from Amazon. But many have complained about the $3 billion in subsidies Amazon is slated to receive, as well as the traffic and infrastructure woes the new project may create.

Another campus of equal size is planned for Crystal City, in Arlington, Virginia, just outside Washington DC, but it’s received far fewer complaints.

Jimmy Van Bramer, a New York City councilman, and Michael Gianaris, a state senator, who both represent Long Island City, have vocally opposed the project. New York Rep. Alexandria Ocasio-Cortez, one of the best-known new entrants to Congress, has derided Amazon’s incentives package.

‘As I have said many times, this is a bad deal,’ Van Bramer said during a Wednesday council meeting on HQ2 that was repeatedly interrupted by protesters’ chants. ‘This is bad for Long Island City, bad for Queens, and bad for New York City. The mayor and the governor caved to the richest man on earth, and then handed the bill to each and every New Yorker.’

Amazon

As the project moves through the time-consuming approvals process, Amazon will have to find ways to win over New York City residents and, perhaps, turn some of these opposing politicians into supporters.

The good news for the company is that New Yorkers appear to strongly back the campus plan, with 57 percent of residents for HQ2 and 26 percent against, according to a Quinnipiac University poll released this month. However, people polled were mixed about the incentives package, so Amazon will likely need to spend a lot of time explaining why such a big company is taking that money.

Before Wednesday’s council hearing, a protest took place on the steps of New York City Hall. One Long Island City resident, James Dillon, a retired state employee, held up a sign across from the protesters that said ‘Welcome Amazon.’

‘I’m saying what people in Long Island City actually feel, which is this is going to bring working-class jobs,’ he said.

Business practices

Amazon for years has faced questions about the its treatment of its workers, particularly warehouse employees. Added to that, more academics, politicians and industry watchers have raised concerns about Amazon potentially becoming an online retail monopoly. There have even been calls to break up Amazon.

Looking to raise awareness of Amazon’s power in the marketplace and of its HQ2 incentives, a group of tech workers in New York created a Chrome browser plug-in called Block Amazon for Me. ‘We asking people to reconsider what they are supporting and what are the real costs,’ said Woody, who is the project manager for the plug-in project and who declined to give his full name.

Amazon and Bezos appear to be working to fight against these concerns. Amazon for years has been promoting its work helping small businesses grow on its online marketplace, presenting itself as a friend of the little guy. After Sen. Bernie Sanders repeatedly complained about Amazon’s warehouse worker conditions, the company raised its minimum wage to $15 an hour, a move Sanders applauded.

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Also, Bezos this year announced his first major philanthropic effort, the Day One Fund. Its $2 billion starting donation will help homeless people and create a new network of preschools in low-income communities.

Amazon also benefits from a sterling reputation among consumers. Morning Consult reported this month that Amazon was the most-loved brand in the US a second year in a row and tied with Google as the most admired employer.

The work by Bezos and Amazon are unlikely to silence their critics. The company will remain a big target for organized labor since it now employs hundreds of thousands of nonunion workers and allegedly resists unionization efforts. As HQ2 development ramps up, Amazon is likely to face even more attention over its handling of the construction, environmental impacts and effects on Long Island City’s and Crystal City’s communities.

Bezos has repeatedly said his giant company deserves scrutiny. He’s about to get a lot of it.

Donald Trump

President Donald Trump this year repeatedly took to Twitter to bash Amazon and Bezos, two of his favorite targets. He attacked Amazon, saying it doesn’t pay its fair share in taxes and exploits the US Postal Service for handling its shipments (something the USPS denies).

Trump’s attacks are widely seen as stemming from unflattering coverage by the Bezos-owned Washington Post. Amazon avoided engaging in the spat, and Trump eventually moved on to other targets.

But the president still may find ways to make Bezos’ life more difficult. He assembled a task force in April to review the Postal Service’s operations and rates. That group this month recommended the USPS raise its prices, a change that could harm Amazon, other e-commerce companies and online shoppers.

Additionally, with Amazon looking to gain more government contracts for cloud-computing work and its development of a new campus near DC, Bezos may find himself needing help from a less-than-willing president.

Data protection

This year brought with it much greater attention on what tech companies know about consumers and how that information is used. Facebook faced the harshest criticism, particularly for its Cambridge Analytica scandal, but Amazon was not immune to these issues.

The American Civil Liberties Union has put a spotlight on tech companies’ development of facial recognition software, especially when it’s sold to law enforcement. The ACLU directed most of its concerns at Amazon and its Rekognition facial-recognition platform, which it provides to a handful of government agencies.

While Microsoft has called for government regulations in the use of the technology, Amazon has stood by its work with law enforcement on facial recognition and other software tools, leaving it more open to criticism.

Additionally, as Amazon’s Alexa voice assistant grows in popularity and learns to do more things, the potential increases for a messy data breach or customers disliking how much Alexa knows about them.

Wedbush’s Pachter said people have found reasons to be bothered by Alexa already, including when police ask for its recordings as part of murder investigations.

‘That kind of stuff is really creepy,’ he said, ‘and yes they can get in trouble with that.’

 

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