Amazon and the Digital Euro - Promoting its Own Profitability at Our Expense

Here is a recent announcement from Amazon:

 

In the article with the subtitle "We at Amazon believe that a digital euro can be a tool to foster innovation and increase the efficiency of payments", the company announces the release of a report by the European Central Bank which outlines the lessons learned from the ECB's prototyping exercise which ran from July 2022 to February 2023 for the digital euro.  Of course, Amazon is all excited about this development since it was chosen to participate in the exercise by delivering a prototype of an e-commerce transaction ecosystem and integrate it into the Eurosystem's payment system.  Amazon states the following:

 

"At Amazon we were proud to have been part of this exercise, during which we were able to offer the ECB our expertise from an ecommerce payments perspective. We are invested in enabling modern, fast, and inexpensive payments for our customers, and we believe our customer obsession lends itself to maximising convenience, speed, and security. Our involvement in the project further illustrates our commitment to Europe, where we directly employ more than 200,000 people across the continent, support 225,000 European small and medium enterprises through our stores, and have spent €142 billion to grow Amazon across the EU since 2010."

 

Typically, when it comes to promoting digital currencies, it's all about convenience, speed and security.  That's how our dystopic future is being sold to the sheeple.

 

According to the ECB's recent report on the prototype of the digital euro, the exercise included the development of a single back-end (i.e. settlement engine) and five different front-end (i.e. user interfaces) prototypes which were presented by private companies, including Amazon, CaixaBank, Worldline, EPI and Nexi.  Each of the proposed user interfaces was tailored to one of the five proposed person-to-person payment uses for the digital euro which include payments that are conducted:

 

(i) person-to-person online payments

 

(ii) person-to-person offline payments initiated in shops where there is no need for network connectivity

 

(iii) point-of-sale payments initiated by the payer

 

(iv) point-of-sale payments initiated by the payee

 

(v) e-commerce payments

  

It is the E-commerce payments option that Amazon was selected to study.

 

According to the report, the tests proved that the Eurosystem payment system was capable of supporting different types of transactions while protecting users' privacy by not revelling their payment patterns or account balances to the Eurosystem.

 

Here is a key quote from the report that I found interesting with my bold:

 

"In line with the Eurosystem’s objectives, it was possible to deepen the understanding of the technical characteristics of offline payment systems, building on the knowledge already gained from the previous experiments conducted by the Eurosystem in 2021. However, questions remain as to whether the existing technology is capable of delivering, in the short to medium term (five to seven years), a production-ready and secure offline solution in line with the Eurosystem’s requirements and on the scale foreseen for the digital euro."

 

That's the first time that I've ever seen a timeline for adoption of CBDCs announced by any of the world's major central banks.

 

Let's close this posting with a quote from Amazon's article:

 

"We appreciate the ECB’s diligence in working with various stakeholders to ensure a digital euro works in practice, and we are optimistic that the new public infrastructure will deliver significant benefits to EU residents, merchants, and the broader EU economy."

 

Of course Amazon is optimistic that the implementation of a digital euro would deliver "significant benefits", mainly to its own profitability.  To hell with the rest of us.

Amazon's Sparrow - Creating Unemployment for Americans

On November 10, 2022, Amazon announced its latest technological advance; Sparrow, an intelligent robotic system that advances the handling of items by detecting, selecting and handling individual products in Amazon's vast inventory.

 

Let's open this posting by looking at the number of Amazon employees doing back to 2009:

 

Here is a graph showing the annual growth rate in the number of Amazon employees:

 

Now, let's go back to Amazon's press release about its latest technological advancement.  Here is a video with background on Sparrow:

 

Amazon's team of roboticists, engineers and software developers have a decade-long history of developing and implementing advanced technology starting with the company's acquisition of robotics company Kiva in 2012.

 

Here is a quote from the press release about Sparrow:

 

"Sparrow represents a major advancement in the state-of-the-art technology of industrial robotics. Leveraging computer vision and artificial intelligence (AI), Sparrow can recognize and handle millions of items. Last year, with the support of Amazon technologies, our employees around the world picked, stowed, or packed approximately 5 billion packages—or over 13 million packages per day. Robotics technology enables us to work smarter, not harder, to operate efficiently and safely."

 

Here is what Amazon has to say about the upside of Sparrow with my bold:

 

"Beyond the technological advancements of Sparrow, what we’re truly excited about are the implications the technology has and the ways it will benefit our employees and customers. Working with our employees, Sparrow will take on repetitive tasks, enabling our employees to focus their time and energy on other things, while also advancing safety. At the same time, Sparrow will help us drive efficiency by automating a critical part of our fulfillment process so we can continue to deliver for customers."

Sparrow will allow Amazon's employees to focus their time and energy on other things like writing resumes and looking for new jobs.

 

Amazon claims that its robotics program is "investing in its employees" as quoted here:

 

"The design and deployment of robotics and technology across our operations have created over 700 new categories of jobs that now exist within the company—all because of the technology we’ve introduced into our operations. These new types of roles, which employ tens of thousands of people across Amazon, help tangibly demonstrate the positive impact technology and robotics can have for our employees and for our workplace. Supporting our employees and helping them transition and advance their career into roles working with our technology is an important part of how we will continue to innovate.

An example of our commitment to advancing employee careers is our Amazon Mechatronic and Robotics Apprenticeship. The 12-week classroom apprentice program, which is covered by Amazon, is followed by 2,000 hours of on-the-job training and industry-recognized certifications, helping our employees learn new skills and pursue in-demand, technical maintenance roles. Following completion of the apprenticeship, employee pay increases by approximately 40% for program participants."

  

Looking back a few months ago, we find this video about Amazon:

 

 

...and this news coverage on America's mainstream media:

 

 

...and this video by fulfillment centre workers:

  

Robots don't complain about heat, overwork, safety issues, low pay, injuries, they don't expect meal breaks, they don't get thirsty and, most importantly, they aren't so impertinent that they will try to unionize....at least until they become self-aware. 

 

If Amazon totally automates its fulfillment operations, the company will never again have to subject itself to scrutiny no matter how often it claims that the automation of its operations are supporting its employees.  With over 1.6 million employees, it's quite clear that Amazon could significantly reduce its long-term costs by replacing humans with Sparrow the more than 520,000 robotic drive units that are "on the job".

But, on the upside, Jeff Bezos just keeps on getting richer and richer.

Excessive Corporate Profiteering from the COVID-19 Pandemic - A Potential Solution

While it got almost no traction in what passes for the media today, a recent House Resolution introduced by Representative Tulsi Gabbard (HI-02) looks to punish large corporations (i.e Amazon, Walmart, Zoom etcetera) that gleaned excessive profits from sales during the pandemic.  

  

Here is the text from H.Res. 1267 "Expressing the sense of the House of Representatives that Congress must pass a pandemic excess profits tax on large corporations who have achieved windfall profits due to the COVID-19 public health crisis":

 

Here is a screen capture from Ms. Gabbard's website outlining her reasons for introducing the excess profits tax:

 

Here is the key paragraph:

 

"Big tech corporations and big box retailers are among those who have made excessive profits during the COVID-19 pandemic, while mom and pop shops are being forced to close their doors due to government-mandated restrictions. Because of this, these large corporations will be better positioned with a competitive advantage over small businesses in a post-pandemic economy. Congress must reinstate the WWII-era excess profit tax used at that time to prevent war-time profiteering, and dedicate the funds collected to helping small businesses recover. Small businesses are the backbone of our economy and have borne the brunt of this crisis. We need to support our small businesses and make sure that they are able to thrive and compete."

  

Recent research by Robin Greenwood et al at the National Bureau of Economic Research found that small firms were particularly at risk thanks to the COVID-19-related shutdowns.  Here is a quote (my bolds):

 

“Small firms are especially vulnerable to the crisis, not not because the pandemic has especially affected industries dominated by small firms, but instead because small firms􏰃 balance sheets are more vulnerable to losses in revenues.

 

Figure 6 confirms that large firms in need of restructuring have multiple options available, while small firms have no other option but to liquidate. Above $500m of liabilities, close to 80% of the bankruptcy filings end up as a Chapter 11-backed reorganization. The contrast with small businesses is striking: Below $1m of liabilities, 90% of the filings are straight-out liquidations, while less than 5% of bankruptcies end- up as re-emergence from a Chapter 11 filing. For a small firm, failure typically means liquidation....

 

Frictions to restructuring small firms are substantially larger. Even small disruptions to cash flow can trigger restructuring as many of these firms maintain low cash buffers and lack access to lines of credit (Bartik et al 2020). Based on the June 27 Census Pulse Survey, including financial assistance and loans, only 30% of small businesses reported having enough cash to maintain operations for another three months....

 

Chapter 11 bankruptcy imposes costs that can be as high as 30% of a small businesses, making it close to prohibitive for many small businesses even if they wish to continue. Consistent with this, small firms are more likely to simply shut down."

 

Here is a graphic from the paper showing the percentage of small businesses in various sectors of the American economy that have experienced a severe negative impact thanks to the COVID-19 response:

 

Here is a graphic from the paper showing the year-over-year change in revenues across the same industries:

 

 

In sharp contrast, let's look at one of the leading contenders for excessive profiteering, Amazon. Here are a selection of graphics showing key metrics from the company's Q3 report:

As you can see, on a year-over-year basis, Amazon's net sales are up 37 percent and net income is up 197 percent despite the fact that the economy was in a recession and that many consumers saw their household incomes slashed.

 

While it is unlikely that Representative Gabbard's proposal will ever see the light of day as it winds its way through Congress, it is quite clear that Amazon is one of the bill's prime targets.  Given that Amazon appears to have been guilty of price-gouging during the pandemic as you can see here, unless we all want to shop at the world's largest online emporium and make Jeff Bezos even wealthier, something will have to be done to ensure that Main Street American businesses have an opportunity to sell their goods on a level playing field.

Amazon and Price Gouging During the COVID-19 Pandemic

Updated February 2021

A recent analysis by the national non-profit organization Public Citizen looks at how one of America's largest retailers benefitted from the COVID-19 pandemic.  This is of particular pertinence given that bricks and mortar stores throughout the United States were largely shuttered as a result of the pandemic and stay-at-home orders were issued by state level governments, leaving American consumers with little choice but to shop online for goods that they needed during the pandemic.  As well, the fact that there could well be a second shutdown as COVID-19 tests show increasing numbers of cases makes this analysis all the more pertinent.

Public Citizen opens by noting that there was a significant hoarding of key products during the pandemic, particularly in personal protective equipment (PPE) which led to shortages and price gouging by retailers.  The authors of the report looked at 15 essential items that were available on Amazon, by far the largest online retailer in the world.  The study looks at what happened to prices of these essential items which are sold directly by Amazon and by its third-party sellers through its Amazon Marketplace.

 

As background, on February 29, 2020, Washington's governor Jay Inslee was the first U.S. governor to declare a state of emergency.  By March 18, 2020, nearly every state had declared a temporary state of emergency, most of which have been renewed and are still in effect today.  In certain states, governors' emergency declarations included prohibitions on price gouging on essential products.  As states began to issue stay-at-home orders, residents in those states were forced to turn to Amazon for products that they could not acquire at their weekly allowed trip to their local stores because of pandemic-induced shortages.  One of the greatest beneficiaries of forced online shopping was, of course, Amazon.  As you can see on this press release announcing the second quarter 2020 results from Amazon, increased sales has led directly to a massive increase in net income:

 

For the third quarter of 2020, Amazon is projecting net sales of between $87 billion and $93 billion, reflecting earnings growth of between 24 percent and 33 percent on a year-over-year basis.  The latest Amazon results also show that earnings from its Marketplace business increased by 53 percent to $18.2 billion for the second quarter of 2020 alone.  This profit comes from the cut that Amazon keeps in fees charged to its third-party sellers ecosystem.  

 

As I noted above, the Public Citizen report looks at price gouging by both third-party/Amazon Marketplace sellers as well as those sold directly by Amazon.  Let's start by looking at some examples of price gouging by third-party sellers on items that were necessities for consumers:

 

Here are some examples of price gouging on products sold directly by Amazon, noting that many of these items are considered to be essential components of PPE while other food products were in higher demand as households turned to home cooked meals because they were ordered to shelter-in-place:

 

Let's look at what Amazon had to say about the practice of price gouging on its blog back in March 2020:

Amazon's four-part methodology for preventing "bad actors" from gouging its customer base was obviously a failure, nonetheless, the company claims that it is "...humbled by the trust our customers have placed in use during this difficult time."

 

That said, on the upside, this is how Amazon stock has performed since March 2020, thanks in large part to the significant increase in sales volumes since the government-imposed lockdowns took place and its impact on profitability:

According to Inequality.org, this has resulted in Jeff Bezos personal wealth rising from $133 billion on March 18, 2020 to $206.4 billion on September 4, 2020, an increase of 55.2 percent.

 

The United States currently has no federal price gouging law, preferring to leave pricing in the hands of what passes as a "free market".  Given that Americans can shop online from any state, state laws against price gouging are toothless.  According to Public Citizen, there are steps that Washington could take to prevent a repetition of the shameful behaviour by Amazon (and other retailers) during this time when American consumers are highly vulnerable:

 

1.) Provide a clear and unambiguous definition of price gouging such as a 10% increase in prices during an emergency;

 

2.) Include a very broad list of products, goods, and services that would be covered;

 

3.) Establish significant civil penalties enforceable by the Federal Trade Commission and state attorneys general;

 

4.) Apply wherever price gouging occurs in the supply chain; and

 

5.) Be applicable during the current COVID-19 pandemic as well as any disaster or health emergency now and in the future. 

With the lockdowns being reinstitute in many jurisdictions, the best thing that consumers can do is to "humble" Amazon by doing their shopping at locally owned businesses rather than further enriching America's wealthiest oligarch.

The Amazon That You Don't Know

Updated May 2020

When most of us think about Amazon, the first thing that pops to mind is that goofy orange smiley icon that pops up on their merchandise retailing website and the fact that it started life as an online retailer of books.  What we don't think about is Amazon, the cloud computing behemoth and its links to the U.S. intelligence network.  Thanks to a recent document dump  called = by WikiLeaks, we now have a glimpse into the underbelly of Jeff Bezos' world that gets almost no attention from anyone.

Let's start with this:

Amazon Web Services or AWS states the following about itself:

What it doesn't talk about is the massive size of its operation since many of its data centres are not publicly tied to Amazon, rather, they operate under subsidiaries that are not easily identifiable with Amazon, the online retail behemoth.  The documents leaked by WikiLeaks is dated from late 2015 and lists the addresses and some operational details about more than one hundred data centres located in 15 cities in nine nations.  Here is a map that was created by WikiLeaks showing the overall locations of these data centres:

Data centres are located in the following countries, regions and cities:

1.) United States - Northern Virginia, Seattle, California Bay Area, Northeastern Oregon

2.) Europe - Dublin, Luxembourg, Frankfurt

3.) China - Beijing, Ningxia

4.) Japan - Tokyo, Osaka

5.) Singapore

6.) Australia - Sydney

7.) Brazil - Rio de Janeiro, Sao Paulo

Here is a sampling of the 20 page document which lists the locations and additional details including telephone numbers (which are not to be released to anyone outside of Amazon), addresses and shipping information and which comes with this warning:

"This information is not public and is classed as Highly Confidential!"

So much for that!

As you can see on this page, Amazon's presence at 7060 and 7080 Wellington Road, Manassas, Virginia is known as "Vandalay Industries" (remember that from Seinfeld?):

While all of this may seem relatively mundane, one has to keep in mind that Amazon/Bezos has a connection to the U.S. government intelligence network.  In 2013, Amazon signed a $600 million, ten year contract with the Central Intelligence Agency to develop a computing cloud service that would service all seventeen agencies that comprise the American intelligence community.  In November 2017, Amazon Web Services made the following announcement:

The AWS Secret Region has the ability to work with and store government/intelligence data that is classified up to the Secret level.  According to Amazon, AWS Secret Region is "readily available to the U.S. Intelligence Community through the intelligence community's Commercial Cloud Services contract with AWS".  AWS touts itself as the first and only commercial cloud provider to offer regions to serve government data classified as Unclassified, Sensitive, Secret and Top Secret.  

Let's close with this graphic from Synergy Research Group which shows the dominant position of Amazon in the Cloud provision business:

Amazon currently has a grip on 34 percent of the cloud market, bigger than the next four competitors (IBM, Google, Microsoft and Alibaba) combined.  This along with its past U.S. government involvement gives it the influence to gain an even larger share of the federal government's deepest and darkest secrets.

So, the next time you see this:

...think about Manadalay Industries (aka Amazon), located at 7060 and 7080 Wellington Road, Manassas, VA, 20109: