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Amazon.com Inc Antitrust Laws and Competition Issues Bezos, Jeffrey P e-commerce Flipkart.com India Modi, Narendra Shopping and Retail Uncategorized

Welcome to India, Mr. Bezos. Here’s an Antitrust Complaint.

MUMBAI, India — Amazon’s founder and chief executive, Jeff Bezos, is visiting India this week for the first time in over five years.

Instead of garlands, India’s government is welcoming him with a new antitrust case.

The Competition Commission of India, the country’s antitrust regulator, opened a formal investigation on Monday into the practices of Amazon and Flipkart, the Indian e-commerce giant mostly owned by Walmart.

The inquiry was prompted by complaints from an association of small traders, after several rounds of regulations failed to curb the market power of the two e-commerce platforms, particularly in the online sales of mobile phones. Indian merchants have lobbied Prime Minister Narendra Modi to take tougher action against the companies.

India requires foreign-owned e-commerce firms to be neutral marketplaces, much like eBay, to protect local retailers and distributors from deep-pocketed competition. In the United States, Amazon both operates a marketplace and sells many products — including diapers, batteries and books — like a traditional retailer, buying them wholesale and then reselling them to consumers. Under Indian law, the site is supposed to rely on independent sellers who post their products on Amazon.

But both Amazon and Flipkart give preference to some sellers, the Indian regulator said, by using affiliated companies, discounts and their global relationships with manufacturers to influence who sells what and at what price.

For example, Amazon sells its own brands, like AmazonBasics luggage and Solimo paper products, on its Indian site through companies in which it holds an equity stake. And Flipkart features a small group of preferred, high-volume sellers on its service.

The commission will investigate whether those arrangements violate India’s antitrust law.

India is one of Amazon’s fastest-growing markets as well as an important location for its customer service and research operations. But Mr. Bezos has made just three trips to the country.

On Wednesday, he is expected to discuss opportunities for small businesses on Amazon at a conference in New Delhi. He is also expected to meet Mr. Modi and plans to travel to Mumbai, home to India’s Bollywood film industry, to rub elbows with Bollywood stars like the actor Shah Rukh Khan and the director Zoya Akhtar.

In a statement, Amazon said, “We welcome the opportunity to address allegations made about Amazon; we are confident in our compliance, and will cooperate fully with C.C.I.”

Flipkart said it was complying with all laws in India governing e-commerce and noted the large number of sellers on its platform. “We take pride in democratizing e-commerce in India,” the company said in a statement.

Amazon, the world’s biggest online retailer, faces other antitrust inquiries around the world. The scrutiny in Europe and the United States has also focused on its relationship to its third-party sellers, which account for about 60 percent of sales.

The Federal Trade Commission and the House Judiciary Committee are examining whether Amazon treats unfairly sellers that do not use some of Amazon’s services, such as its fulfillment network. The European Union’s antitrust commission has opened an investigation into whether Amazon misuses information from its marketplace sellers to decide what products it sells directly to customers, including its own private-label offerings.

Amazon has maintained that it faces strong competitors, such as Walmart, and is a small player in the overall retail market, which is still dominated by physical stores.

Karen Weise contributed reporting from Seattle.

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Amazon.com Inc Antitrust Laws and Competition Issues Computers and the Internet e-commerce Google Inc Inventions and Patents Regulation and Deregulation of Industry Sonos Inc Speakers (Audio) Suits and Litigation (Civil) Uncategorized

Sonos, Squeezed by the Tech Giants, Sues Google

SANTA BARBARA, Calif. — In 2013, Sonos scored a coup when Google agreed to design its music service to work easily with Sonos’s home speakers. For the project, Sonos handed over the effective blueprints to its speakers.

It felt like a harmless move, Sonos executives said. Google was an internet company and didn’t make speakers.

The executives now say they were naïve.

On Tuesday, Sonos sued Google in two federal court systems, seeking financial damages and a ban on the sale of Google’s speakers, smartphones and laptops in the United States. Sonos accused Google of infringing on five of its patents, including technology that lets wireless speakers connect and synchronize with one another.

Sonos’s complaints go beyond patents and Google. Its legal action is the culmination of years of growing dependence on both Google and Amazon, which then used their leverage to squeeze the smaller company, Sonos executives said.

Sonos advertises its speakers on Google and sells them on Amazon. It built their music services and talking virtual assistants directly into its products. Sonos workers correspond via Gmail, and run the business off Amazon’s cloud-computing service.

Then Google and Amazon came out with their own speakers, undercutting Sonos’s prices and, according to Sonos executives, stealing its technology. Google and Amazon each now sell as many speakers in a few months as Sonos sells in one year.

Like many companies under the thumb of Big Tech, Sonos groused privately for years. But over the past several months, Patrick Spence, Sonos’s chief executive, decided he couldn’t take it anymore.

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Credit…Adam Amengual for The New York Times

“Google has been blatantly and knowingly copying our patented technology,” Mr. Spence said in a statement. “Despite our repeated and extensive efforts over the last few years, Google has not shown any willingness to work with us on a mutually beneficial solution. We’re left with no choice but to litigate.”

Sonos executives said they had decided to sue only Google because they couldn’t risk battling two tech giants in court at once. Yet Mr. Spence and congressional staff members have discussed his testifying to the House antitrust subcommittee soon about his company’s issues with them.

Jose Castaneda, a Google spokesman, said Google and Sonos had discussed both companies’ intellectual property for years, “and we are disappointed that Sonos brought these lawsuits instead of continuing negotiations in good faith.”

“We dispute these claims and will defend them vigorously,” he added.

A spokeswoman for Amazon, Natalie Hereth, said the company did not infringe on Sonos’s technology. “The Echo family of devices and our multiroom music technology were developed independently by Amazon,” she said.

Sonos sued Google in Federal District Court in Los Angeles and in front of the United States International Trade Commission, a quasi-judicial body that decides trade cases and can block the import of goods that violate patents. Sonos sued Google over only five patents, but said it believed Google and Amazon had each violated roughly 100. Sonos did not say how much it sought in damages.

The evolving relationship between Sonos and the tech giants reflects an increasingly common complaint in the corporate world: As the biggest tech companies have become essential to reach customers and build businesses, they have exploited that leverage over smaller companies to steal their ideas and their customers.

After mostly keeping those grievances private for years because they feared retaliation, many smaller companies are now speaking out, emboldened in an age of growing scrutiny of America’s largest tech firms.

Credit…Adam Amengual for The New York Times
Credit…Adam Amengual for The New York Times

Mr. Spence and other Sonos executives said they had agonized over the decision to sue Google, largely because Google still underpins their business. Sonos executives suspect that their pressure on the patent issue has complicated other areas of the relationship, though they can’t say for sure.

After Sonos intensified its demands that Google license its technology, Google pushed Sonos to comply with stricter rules for using Google’s virtual assistant. Those proposed rules included a mandate to turn over the planned name, design and targeted start date of its future products — which Google would compete directly against — six months in advance, up from 45 days in the current deal, Sonos executives said.

“The fear of retaliation is a real fear. Any of these companies could bury them tomorrow. Google could bury them in their search results. Amazon can bury them in their search results,” said Sally Hubbard, a former assistant attorney general in New York’s antitrust bureau who now works at Open Markets Institute, a think tank. “It’s really hard to find any industry where corporations are not dependent on one of the big tech giants.”

Fifteen years ago, home sound systems typically meant a tangled network of wires and speakers and complicated instructions on how to make it all work. Then Sonos came along in 2005, promising wireless sound throughout a house, seamlessly controlled from a hand-held device. Its early ads boasted: “Any song. Any room.

Sonos quickly began patenting its innovations, a stockpile of intellectual property it now proudly displays on its website.

Its devices made life a bit more comfortable for consumers who could afford them, and they made for a nice little business for Sonos, which is based a few miles from the Southern California coast in Santa Barbara. Sales of its devices took off after the advent of the smartphone and music streaming. Sonos now employs about 1,500 people and sells more than $1 billion in speakers a year.

When Sonos teamed up with Google in 2013, it gave Google engineers detailed diagrams on how its speakers interacted wirelessly with one another. At the time, Google was not a competitor.

Two years later, Google released a small device that could turn an old speaker into a wireless one, much like Sonos’s original product. A year after that, Google released its own wireless speaker, the Google Home. The device, marketed around Google’s talking virtual assistant, quickly began outselling Sonos’s offerings.

Sonos bought the Google devices and used a technique called packet sniffing that monitored how the speakers were communicating. They discovered that Google’s devices used Sonos’s approach for solving a variety of technological challenges. Sonos executives said they had found that Amazon’s Echo speakers also copied Sonos technology.

In August 2016, Sonos told Google that it was infringing. Google had little response. As Google released more products, it violated more patents, Sonos executives said. Over the next three years, Sonos told Google four more times, eventually handing over a list of 100 patents it believed Google had violated. Google responded that Sonos was also infringing on its patents, Sonos executives said, though it never provided much detail.

When Sonos delivered a proposed model for Google to pay licensing fees, Google returned its own model that resulted in its paying almost nothing, Sonos executives said.

Sonos executives said their complaints were hardly just about patents, however. They are concerned that Google and Amazon are flooding the market with cheap speakers that they subsidize because they are not merely conduits for music, like Sonos’s devices, but rather another way to sell goods, show ads and collect data.

Sonos’s entry-level speaker is about $200. Amazon and Google’s cheapest speakers are $50, and they often offer them at much steeper discounts.

In the third quarter of 2019, Amazon shipped 10.5 million speakers and Google six million, according to Strategy Analytics. For the 12 months ending in September, Sonos said it had sold 6.1 million speakers.

“Amazon and Google are making it a mass-market product at a price point that Sonos can’t match,” said Jack Narcotta, a Strategy Analytics analyst.

Amazon said that it was focused on creating the best experience for customers and that its virtual assistant had generated “billions of dollars” for developers and device makers.

To compete, Sonos has had to yield even more power to the companies. When consumers became hooked on Google’s and Amazon’s virtual assistants, Sonos also built them into its speakers.

But Sonos had a strategy to still stand out on store shelves. Instead of being locked into using just one of the assistants, Sonos customers could use both simultaneously. Sonos engineers patented the technology to enable the assistants to work side by side, and executives lobbied Amazon and Google to let it happen.

At first, the companies hated the idea. Hours before a New York news conference in October 2017, Sonos was preparing to unveil its first speaker with virtual assistants when the Amazon product chief Dave Limp called Mr. Spence. Mr. Limp had just found out that Google would also be onstage, and he said Amazon was now pulling out of the event as a result, according to two people familiar with the conversation. After negotiations, Amazon relented.

Sonos executives said Google and Amazon had ultimately forced them to make users select one assistant when setting up their speaker. Amazon said it had never asked Sonos to force users to choose its assistant or Google’s version.

Amazon later changed its position and joined an alliance with Sonos and other companies to make virtual assistants like Alexa function together. Google, along with Apple and Samsung, did not join the alliance.

Google has maintained, Sonos executives said, that it will pull its assistant from Sonos’s speakers if it works alongside any assistant from Amazon, Apple, Microsoft or Baidu, the Chinese internet company. Sonos has followed Google’s orders.

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California Computers and the Internet Data-Mining and Database Marketing e-commerce Law and Legislation Mobile Applications privacy Uncategorized

What Does California’s New Data Privacy Law Mean? Nobody Agrees

Millions of people in California are now seeing notices on many of the apps and websites they use. “Do Not Sell My Personal Information,” the notices may say, or just “Do Not Sell My Info.”

But what those messages mean depends on which company you ask.

Stopping the sale of personal data is just one of the new rights that people in California may exercise under a state privacy law that takes effect on Wednesday. Yet many of the new requirements are so novel that some companies disagree about how to comply with them.

Even now, privacy and security experts from different companies are debating compliance issues over private messaging channels like Slack.

The provision about selling data, for example, applies to companies that exchange the data for money or other compensation. Evite, an online invitation service that discloses some customer information for advertising purposes, said it would give people a chance to opt out if they do not want their data shared with third parties. By contrast, Indeed, a job search engine that shares users’ résumés and other information, posted a notice saying that people seeking to opt out “will be asked to delete their account.”

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Credit…Jeenah Moon for The New York Times

The issue of selling consumer data is so fraught that many companies are unwilling to discuss it publicly. Oracle, which has sold consumer information collected by dozens of third-party data brokers, declined to answer questions. T-Mobile, which has sold its customers’ location details, said it would comply with the law but refused to provide details.

“Companies have different interpretations, and depending on which lawyer they are using, they’re going to get different advice,” said Kabir Barday, the chief executive of OneTrust, a privacy management software service that has worked with more than 4,000 companies to prepare for the law. “I’ll call it a religious war.”

The new law has national implications because many companies, like Microsoft, say they will apply their changes to all users in the United States rather than give Californians special treatment. Federal privacy bills that could override the state’s law are stalled in Congress.

The California privacy law applies to businesses that operate in the state, collect personal data for commercial purposes and meet other criteria like generating annual revenue above $25 million. It gives Californians the right to see, delete and stop the sale of the personal details that all kinds of companies — app developers, retailers, restaurant chains — have on them.

“Businesses will have to treat that information more like it’s information that belongs, is owned by and controlled by the consumer,” said Xavier Becerra, the attorney general of California, “rather than data that, because it’s in possession of the company, belongs to the company.”

Some issues, like the practices that qualify as data selling, may be resolved by mid-2020, when Mr. Becerra’s office plans to publish the final rules spelling out how companies must comply with the law. His office issued draft regulations for the law in October. Other issues may become clearer if the attorney general sues companies for violating the privacy law.

For now, even the biggest tech companies have different interpretations of the law, especially over what it means to stop selling or sharing consumers’ personal details.

Google recently introduced a system for its advertising clients that restricts the use of consumer data to business purposes like fraud detection and ad measurement. Google said advertisers might choose to limit the uses of personal information for individual consumers who selected the don’t-sell-my-data-option — or for all users in California.

Facebook, which provides millions of sites with software that tracks users for advertising purposes, is taking a different tack. In a recent blog post, Facebook said that “we do not sell people’s data,” and it encouraged advertisers and sites that used its services “to reach their own decisions on how to best comply with the law.”

Uber responded to Facebook’s notice by offering a new option for its users around the world to opt out of having the ride-hailing service share their data with Facebook for ad targeting purposes.

“Although we do not sell data, we felt like the spirit of the law encompassed this kind of advertising,” said Melanie Ensign, the head of security and privacy communications at Uber.

Evite, the online invitation service, decided in 2018 to stop selling marketing data that grouped its customers by preferences like food enthusiast or alcohol enthusiast. Since then, the company has spent more than $1 million and worked with two firms to help it understand its obligations under the privacy law and set up an automated system to comply, said Perry Evoniuk, the company’s chief technology officer.

Although Evite no longer sells personal information, the site has posted a “do not sell my info” link. Starting Wednesday, Mr. Evoniuk said, that notice will explain to users that Evite shares some user details — under ID codes, not real names — with other companies for advertising purposes. Evite will allow users to make specific choices about sharing that data, he said. Customers will also be able to make general or granular requests to see their data or delete it.

“We took a very aggressive stance,” Mr. Evoniuk said. “It’s beneficial to put mechanisms in place to give people very good control of their data across the board.”

Companies are wrangling with a part in the law that gives Californians the right to see the specific details that companies have compiled on them, like precise location information and facial recognition data. Residents may also obtain the inferences that companies have made about their behavior, attitudes, activities, psychology or predispositions.

Apple, Facebook, Google, Microsoft, Twitter and many other large tech companies already have automated services enabling users to log in and download certain personal data. Amazon said it would introduce a system that allowed all customers of its United States site to request access to their personal information.

But the types and extent of personal data that companies currently make available vary widely.

Apple, for instance, said its privacy portal allowed people whose identities it could verify to see all of the data associated with their Apple IDs — including their App Store activities and AppleCare support history.

Microsoft said its self-service system enabled users to see the most “relevant” personal information associated with their accounts, including their Bing search history and any interest categories the company had assigned them.

Lyft, the ride-hailing company, said it would introduce a tool on Wednesday that allowed users to request and delete their data.

A reporter who requested data from the Apple portal received it more than a week later; the company said its system might need about a week to verify the identity of a person seeking to see his or her data. Microsoft said it was unable to provide a reporter with a list of the categories it uses to classify people’s interests. And Lyft would not say whether it will show riders the ratings that drivers give them after each ride.

Experian Marketing Services, a division of the Experian credit reporting agency that segments consumers into socioeconomic categories like “platinum prosperity” and “tough times,” is staking out a tougher position.

In recent comments filed with Mr. Becerra’s office, Experian objected to the idea that companies would need to disclose “internally generated data about consumers.” Experian did not return emails seeking comment.

The wide variation in companies’ data-disclosure practices may not last. California’s attorney general said the law clearly requires companies to show consumers the personal data that has been compiled about them.

“That consumer, so long as they follow the process, should be given access to their information,” Mr. Becerra said. “It could be detailed information, if a consumer makes a very specific request about a particular type of information that might be stored or dispersed, or it could be a general request: ‘Give me everything you’ve got about me.’”

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Amazon.com Inc Campbellsville (Ken) Corporate Social Responsibility e-commerce Factories and Manufacturing Fruit of the Loom Inc Labor and Jobs Relocation of Business Shopping and Retail Tax Credits, Deductions and Exemptions Uncategorized Wages and Salaries

Prime Anchor: An Amazon Warehouse Town Dreams of a Better Life

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Credit…Andrew Spear for The New York Times

In Campbellsville, Ky., the tech giant’s influences abound. The profits, not so much.


CAMPBELLSVILLE, Ky. — In the late 1990s, the town of Campbellsville in central Kentucky suffered a powerful jolt when its Fruit of the Loom textile plant closed. Thousands of jobs making underwear went to Central America, taking the community’s pride with them.

Unemployment hit 28 percent before an unlikely savior arrived as the century was ending: a madly ambitious start-up that let people buy books, movies and music through their computers.

Amazon leased a Fruit of the Loom warehouse about a mile from the factory and converted it into a fulfillment center to speed its packages to Indianapolis and Nashville and Columbus. Its workers, many of them Fruit veterans, earned less than what the textile work had paid but the digital excitement was overwhelming.

Twenty years later, Amazon is one of the world’s most highly valued companies and one of the most influential. Jeff Bezos, Amazon’s founder, has accumulated a vast fortune. In Seattle, Amazon built a $4 billion urban campus, redefining a swath of the city.

The outcome has been different in Campbellsville, the only sizable community in Taylor County. The county population has stalled at 25,000. Median household income has barely kept pace with inflation. Nearly one in five people in the county lives in poverty, more than in 2000.

Over the last 20 years, Amazon’s stock price has soared. But household income in Taylor County has barely kept pace with inflation.

Taylor Co., Ky.

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Taylor County, Ky.

median income

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median income

Cumulative change since 2000

Cumulative change since 2000

Taylor County, Ky.

median income

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median income

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Income figures are adjusted for inflation.

Sources: Census Bureau, via Federal Reserve (income data); Refinitiv (stock prices)

By Karl Russell

The divergent fates offer a window into what towns can give to tech behemoths over decades — and what exactly they get in return. Campbellsville’s warehouse was among the first of what are now an estimated 477 Amazon fulfillment centers, delivery stations and other outposts around the country. That makes Campbellsville, with 11,415 inhabitants, a case study for what may happen elsewhere as Amazon continues expanding.

Brenda Allen, Campbellsville’s mayor, said: “Amazon has had a really good business here for 20 years. They haven’t been disappointed at all. And we’re glad they’re here.”

But, she added, “I really would feel better if they would contribute to our needs.”

In central Kentucky, Amazon has reaped benefits, including a type of tax break that critics label “Paying Taxes to the Boss.” In the arrangement, 5 percent of Amazon workers’ paychecks, which would ordinarily be destined for the county and the state, go to Amazon itself. The company netted millions of dollars from this incentive over a decade.

While that tax break has run out, Campbellsville itself still gets no tax money from Amazon. The warehouse is just outside the town limits. The city school system, which is its own taxing authority, does get revenue from Amazon. Both the city and the county school systems recently raised their tax rates because of revenue shortfalls. (The city increase had to be rescinded for procedural reasons.)

No one wants Amazon to leave, though. It is Campbellsville’s largest private employer. Its online mall has given the town’s shoppers access to a paradise of goods.

Less visibly, Amazon shapes the local economy, including which businesses survive and which will not be coming to town at all. It supplies small-screen entertainment every night, influences how the schools and the library use technology and even determined the taxes everyone pays.

“We were a company town with Fruit of the Loom, and we’re becoming a company town again,” said Betty J. Gorin, a local historian.

Amazon said it was not solely responsible for Campbellsville’s vitality. It pointed out other big local employers, including a hospital and a Baptist university. “Amazon is not the only barometer,” it said.

The company said it had spent $53 million remodeling its warehouse “to benefit employees.” The facility now includes a classroom for training workshops and, it said, “on-site college classes.” Amazon declined a request for a tour.

Some cities and towns are now weighing the costs of Amazon versus the benefits. The nationwide total of all state and local subsidies for the company over 20 years is $2.8 billion, according to Good Jobs First, which tracks tax breaks for corporations.

Activists protested New York’s plan to give Amazon billions of dollars in tax breaks, causing the company to abandon its plans this year to move into Queens. (Amazon began opening new offices in Manhattan this month without any incentives.) Maryland residents rejected a proposed warehouse last summer, citing concerns about noise pollution, traffic and safety.

In Campbellsville, the relationship between Amazon and the citizens is facing some questions as it enters middle age.

“The needle has not moved in the last two decades on the quality of life in Kentucky, especially in places like Campbellsville. What does that tell you?” said Jason Bailey of the Kentucky Center for Economic Policy, a research and advocacy group.

He called the state “a fiscal mess because of tax giveaways to Amazon and other companies.” Kentucky has had 20 rounds of budget cuts since 2008, he said.

In 1948, a Kentucky underwear company set up an outpost in the basement of the old Campbellsville armory with five employees. This eventually became the largest single male-underwear plant in the world, with 4,200 workers producing 3.6 million garments a week.

The money was good, especially for women and African-Americans who had few other opportunities. Fruit, as it was eventually called, built the first public tennis courts and paid the city $250,000 in 1965 to expand the wastewater disposal plant. Factory executives spurred the creation of a country club and the public swimming pool.

The easy times ended with the North American Free Trade Agreement, which took effect in 1994. Amazon’s arrival five years later offered a second chance. Campbellsville was more than 40 miles from the nearest interstate, but it had a 570,000-square-foot modern warehouse and thousands of eager workers who knew how to hustle.

To woo Amazon, the local fiscal court passed the payroll tax measure, which opened up the state coffers. Amazon’s workers, like other employees in the county, would pay a 1 percent payroll tax and a 4 percent state income tax. But that money went directly to Amazon as a reward for bringing in jobs.

This type of tax break was first developed in Kentucky and is now widespread. Amazon’s incentives totaled $19 million over 10 years, including exemption from the state’s corporate income tax. The company said it had ultimately received “less than half” that amount, though it declined to explain the discrepancy.

The enthusiasm with which yesterday’s workers embraced tomorrow’s economy was a big story that drew national attention. Making underwear was not sexy. Selling things online was.

Arlene Dishman began working at Fruit in 1970. She said she had earned as much as $15 an hour — the equivalent of about $100 now — sewing necklines on V-neck T-shirts. “You can’t hardly turn that money down,” she said.

Her starting rate at Amazon was just $7.50 an hour, but she relished creating a digital outpost in Campbellsville. “We felt responsible for a lot of the success of Amazon,” she said. “We were just so proud.”

She became a trainer, worked with Mr. Bezos himself when he came to town, was promoted to management. These were years of turmoil at Amazon, as the dot-com bubble burst in the early 2000s. Pressure ramped up.

“I worked on the third floor,” Ms. Dishman said. “No air-conditioning. I would have people on the line pass out, constantly.”

As a manager, she said, she was too understanding, which was her undoing.

“I had worked with these people for so many years at Fruit that when a situation came up that management was not liking, I had a tendency to take the workers’ side,” she said. She left after three years.

David Joe Perkins, who worked for Fruit for 24 years and then for Amazon, said he also took pride in being part of the e-commerce start-up.

“We treated it like our company,” he said. “I have personally worked with Jeff Bezos. I actually liked the guy.”

What Mr. Perkins did not like were Amazon’s managers.

“My manager called me into the office one day and said, ‘Dave, your performance is not what it needs to be.’ I said, ‘How can I improve?’ He said, ‘You don’t fire enough people.’”

Several months later, Mr. Perkins was let go with little explanation.

Both Mr. Perkins, 64, and Ms. Dishman, 71, have Amazon Prime accounts. Ms. Dishman’s daughter works for Amazon as a data analyst. Ms. Dishman even thought about returning to the warehouse during last year’s holidays to earn a little Christmas money. She did not follow through.

Just about everyone in Campbellsville remains grateful to Amazon for coming and hiring people. Those workers take their paychecks and spend at least some of the money around town.

There are not as many workers as people think, though.

When Amazon arrived, it said it would employ 1,000 people full time within two years. That’s still the official total from the Kentucky Cabinet for Economic Development, a state agency, and in Mrs. Gorin and Jeremy Johnson’s two-volume history of the town, published this year. Team Taylor County, which solicits new industries for the community, puts the number of workers at 1,350.

Amazon said in October that the total was 655 full-time workers.

“I’m shocked,” Mrs. Gorin said.

Kelly Cheeseman, an Amazon spokeswoman, said the “head count started to shift” at the warehouse “around 2016 to 2017.” She said automation — the deepest fear of every community with an Amazon warehouse — had nothing to do with it.

“We regularly balance capacity across the network,” Ms. Cheeseman said. In November, Amazon said full-time workers had risen to 700.

Amazon said that the money it paid in wages was an investment in Campbellsville and that it had contributed “$15 million in taxes to Taylor County” over the last 20 years. It declined to break down the numbers further.

Records and interviews indicate that Amazon paid to the city school system about $350,000 in taxes this year. The company paid the county an additional $410,000 in property taxes.

Good Jobs First, the group that analyzes tax benefits for corporations, thinks that is not enough.

“What has Amazon really done for the community?” asked Greg LeRoy, the center’s executive director. “It’s not like it’s a tech lab, diffusing intellectual property or spinning off other businesses. It’s a warehouse.”

Ms. Allen, the mayor, wants more money to pay the town’s bills.

“The people in Seattle are getting rich,” she said. “They don’t care what happens to the people in Campbellsville, not really.”

In the 1970s and 1980s, life in Campbellsville revolved around Fruit. Townspeople learned not to be near downtown when the plant let out at 4 p.m. and traffic briefly became overwhelming. When Fruit shut down for the first two weeks in July every year, the town was so dead that other industries in the area scheduled their vacations for the same time. Fruit officials were active in the Chamber of Commerce, civic clubs and associations.

Amazon is not like that.

“Amazon is everywhere and nowhere,” Mrs. Gorin said. “This town runs on Amazon, but their employees are not in positions of political power.”

Amazon is linked into the community in other ways that often end up benefiting Amazon. In 2016, the company donated 25 Kindle Fire tablets to Campbellsville kindergarten and first grade classrooms. It also donated $2,500 in “content.” The town schools are increasingly buying supplies from Amazon for a total of about $50,000 in the last fiscal year, records show.

“We want to do business with those in our community, those paying local taxes,” said Chris Kidwell, finance director for Campbellsville Independent Schools. “It’s kind of a good-neighbor policy.”

The county school system, with 2,800 students, is dealing with state budget cuts. One way it has made up some of the shortfalls is by selling corporate sponsorships. Taylor Regional Hospital bought the naming rights to the health services room; Campbellsville University did the same for an education center. Amazon is not a corporate sponsor.

“We’re proud to have them in our community, and we would be proud to have them as a corporate sponsor,” said Laura Benningfield, the assistant superintendent.

Last spring, the local library was the recipient of a $10,000 gift from Amazon for science and technology education. Amazon planned to supply whatever the library wanted by ordering the material through its own site. As this article was being reported and Amazon was emphasizing what it had done for the town, the company just sent the library the cash.

“We’re on the receiving end of a blessing,” said Tammy Snyder, the town librarian. The library, like other public institutions in Kentucky, is dealing with the state’s largely unfunded pension system. Proposed changes that involve the library’s paying significantly more “will bankrupt us,” she said.

Justin Harden, 35, said he had no illusions about Amazon. He and his wife, Kendal, recently opened Harden Coffee, a popular meeting spot, on Main Street.

“If they can figure out a way to cut me out and take my business, they’ll totally do it,” he said. “They would destroy me, absolutely. But I am a 100 percent supporter of Amazon. I have five kids. We get stuff from Amazon almost every day.”

He paused, acknowledging his own contradictions. “That’s why they’re winning,” he said.

A pile of rubble on Campbellsville’s southern approach marks the ruins of the Fruit plant.

The property is owned by Danny and Sandy Pyles, commercial contractors who run an excavating company in nearby Columbia. They bought the textile factory with other investors a decade ago with the goal of building a retail complex called Campbellsville Marketplace.

The graffiti-covered shell was torn down, and a Louisville developer, Hogan Real Estate, cobbled together a deal. Kroger, the country’s largest supermarket chain, would close its two Campbellsville stores. It would then become the Marketplace anchor tenant with a 123,000-square-foot superstore.

Work was supposed to start within weeks. Then, on June 16, 2017, Amazon announced that it was buying the upscale grocery chain Whole Foods. Kroger shares slumped. Its deal in Campbellsville was put on hold, then abandoned. Hogan chased other possible anchors — Menards, Meijer, Home Depot — but none were interested. (Kroger declined to comment.)

“We used to talk about the Walmart Effect when you saw vacant storefronts in these small towns,” said Justin Phelps of Hogan. “Now it’s the Amazon Effect.”

Pyles Excavating is a good Amazon customer. The company needed a muffler recently for a track hoe. It would have cost $1,200 from a dealer. On Amazon, it was half that.

“The internet has brought the world to our fingertips,” Mr. Pyles said.

The Pyleses recently bought out the other investors in the Fruit site. Their investment is now more than $2 million.

“It really is a great piece of property, but right now it’s a reminder of the day Campbellsville literally shut down,” said Sandy Pyles, the daughter of a Fruit worker and relative of many others. “It’s a sadness.”

They would like a Whole Foods there, but know the town is too small to support it. Mr. Pyles has another idea: an Amazon Go store. These are experimental outlets with no cashiers.

That would put local competitors who still needed humans at a disadvantage while adding hardly any jobs. But it would be an investment by one of the world’s richest companies in one of the towns where it began.

“Amazon is the future,” he said. “We’d like to be part of that.”

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Self-Checkout in France Sets Off Battle Over a Day of Rest

ANGERS, France — On a Sunday afternoon, customers at a Géant Casino supermarket browsed the aisles and lined up to buy meat, fish and other groceries. It was a typical shopping experience except for one thing: All the cashiers had gone home. Customers scanned items at automated checkout stations as security guards hovered nearby.

That the store was even open was unusual. French labor rules prohibit most shops from employing workers past 1 p.m. on Sundays. But as e-commerce and online giants like Amazon usher in an era of round-the-clock spending, retailers are amping up the use of automated cashiers to help them compete.

The move has caused an outcry in France, where Sundays are traditionally a rest day for workers and families. While self-checkout machines are often used alongside cashiers, labor unions say that tilting toward fully cashierless operations threatens the French way of life by encouraging American-style consumerism and automation, putting thousands of jobs at risk.

“Sundays are sacred,” said Patrice Auvinet, the head of the General Confederation of Labor union in Angers, a midsize city in western France. “If they change that, it will change French society. And if automated cashiers become normalized, it will have a catastrophic impact on workers.”

Groupe Casino, the country’s biggest supermarket operator, began testing Sunday-afternoon openings in August using only automated machines at the warehouse-size supermarket in Angers. It has expanded the experiment to at least 20 other megastores around the country, igniting raucous protests.

This week, Casino further riled unions by becoming the first supermarket chain in France to keep most of its stores open, including the one in Angers, on Christmas Day using only self-checkout machines. Casino said in a statement that it planned to do the same on New Year’s Day, and that the move was an extension of how it was already operating on Sunday afternoons.

President Emmanuel Macron paved the way for Sunday openings in 2015 when he was France’s economy minister, loosening regulation of business hours around Paris and other touristic areas to stimulate the economy. Unions fought the measures, citing labor rights won over decades.

But retailers say the restrictions that apply outside city centers have become a bind as e-commerce disrupts the retail landscape. As brick-and-mortar outlets lose sales to online merchants, companies say they must either compete or perish.

“The world is changing, and we’re in a very competitive environment,” said Sébastien Corrado, the marketing director of Groupe Casino. “The internet doesn’t have frontiers, so we need to adapt to new modes of consumption that let us stay in the game and be winners.”

Ringing up more profit is especially important for Groupe Casino, which also operates supermarkets in South America and Asia. It is restructuring billions of euros of debt after its holding companies recently entered a form of bankruptcy protection.

At the Angers store, which employs 115 in a working-class neighborhood, Groupe Casino is having salaried employees clock out as usual at 12:30 p.m. on Sundays, then bringing in security guards, hired through another company, to keep the store open through evening.

Groupe Casino had been operating 130 smaller stores in Paris and other cities using self-checkout machines to let consumers shop until midnight or even around the clock.

But Groupe Casino’s huge supermarkets, like the one in Angers, employ thousands, often on urban outskirts with limited job opportunities. That first Sunday afternoon in August, 200 demonstrators converged on the Angers store, chanting angrily and accusing the company of taking a big step toward replacing employees.

Chaos mounted when the protesters were joined by local members of the Yellow Vest movement, which arose last year to protest stagnating wages and declining living standards. Denouncing what they said was an erosion of workers’ living standards, they charged through the store, dumping produce in the aisles and heckling customers who were using the automatic checkout machines.

“Today is just the beginning, but tomorrow, who’s to say this won’t stop?” said Xavier Roche, a maintenance worker for another big supermarket chain, Carrefour, who joined the protests.

He is worried that Carrefour, which uses self-checkout at its convenience stores to stay open Sundays, will do the same at its larger markets. “First it’s Sunday afternoons, then it will be 24 hours a day,” Mr. Roche said.

Cashierless supermarkets are gaining ground around the world. Reducing cash payments and checkout time have become major goals for retailers that want to make the buying experience faster and more attractive while cutting labor costs.

Amazon pushed the boundaries by opening Amazon Go in the United States, a minimart where customers can buy items without any human interaction. Tesco is testing purely cashierless stores in Britain. Stores in China are increasingly using so-called facial payments, which lets shoppers pay by looking into a camera, after they have linked a photo of their face to a bank account. The facial payment technology eliminates the need for a wallet or mobile app.

Groupe Casino has not gone that far. But it is getting closer. Last year, it opened a gastronomic store off the Champs-Élysées in Paris that enables shoppers to buy everything from flowers to foie gras by using an app to scan the products and pay. Interactive displays show data on a product’s nutrition, price and popularity. For shoppers who cannot find the cheese, a voice-activated information screen gives directions to the right aisle. There are about a dozen workers who help customers and stock shelves, but no actual cashiers.

Tech-savvy and time-pressed customers have flocked to such services. “We’re meeting the needs of our clients,” said Mr. Corrado, the marketing director. “If we don’t have to close, then everyone wins because people get convenience and our sales increase. That also benefits our employees.”

That is hardly believable to workers who fear that opening all night at small stores, let alone Sunday afternoons at the big supermarkets, is a slippery slope to full automation and lost jobs.

Saliha Guechaichia, 47, grew anxious when the Géant Casino opened that first Sunday afternoon without her and the other cashiers, many of them single mothers with children. She began working at Casino 30 years ago, earning a modest income that helps her and her family get by.

“There used to be 22 registers with cashiers — now there are just 13,” Mrs. Guechaichia, a union member, said as she sat at a cafe opposite the store with a group of upset workers. Eight cashierless checkout stations were recently installed, she said, and more are coming.

“We’re worried,” she added. “This is no test — the machines are here for good.”

Younger workers find it easier to adapt.

“Machines can’t completely replace us,” said Arthur Hornoy, 20, a university student who works part time as a cashier to help pay for his studies. “For instance, we’re trained to recognize when someone might be stealing. A machine can’t do that.”

The bigger problem, Mr. Hornoy said, is that he wants to work more on Sundays to increase his earnings but cannot do so because of the labor laws.

“This isn’t taking jobs away, because we can’t work anyway,” he said. “I think if the company could have us work, they would, because the lines at the automated registers in the afternoon are huge.”

Even before the cashiers clocked out, those assigned to help customers scan items were overwhelmed. Marvim Bolina Naubir, another university student, zipped around a bank of self-checkout stations as shoppers peppered him with questions on how to use them.

“We are two people working eight automatic registers, when there could be six more cashiers,” Mr. Naubir, 21, said. “Older workers are especially concerned that machines used Sunday afternoons could stretch to the entire week, and then they would lose their jobs.”

Around 15,000 cashier jobs — almost one-tenth of the total — have disappeared in the past decade in France. While that is nowhere near the hundreds of thousands that unions warned would be shed, job losses are expected to mount as automation increases, said Mathieu Hocquelet, a labor sociologist at the Centre d’Etudes et de Recherches sur les Qualifications.

“These are precarious jobs, so there will be mass unemployment,” he said.

At the cafe, Mrs. Guechaichia and the other workers watched from a distance as customers filtered into the store. While townspeople were sympathetic, the protests had not kept away all shoppers. Groupe Casino said around 1,000 consumers were going there Sunday afternoons, bringing in significant sales.

Mr. Roche, the Carrefour maintenance employee, said the longer opening hours were just the start of a Western-style culture of overconsumption coming to France.

“We are opening on holidays and staying open 24 hours for businesses to make more money,” he said. “But workers’ salaries aren’t increasing, and people don’t have more money to consume.”

Declining purchasing power has been a central theme of Yellow Vest protesters in France, where the median monthly take-home pay is about 1,700 euros (about $1,900), meaning that half of workers make less than that.

Mrs. Guechaichia said no cashiers had yet been laid off. But employees no longer working at a cash register were being retrained for other tasks, such as stocking shelves and greeting customers.

How long those jobs will be around, she said, is anyone’s guess.

“Even if we give them flexibility, they will always ask for more,” she said. “All of the social achievements we’ve worked for are collapsing like a house of cards.”

Mélissa Godin contributed reporting.

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Prime Power: How Amazon Squeezes the Businesses Behind Its Store

Image
Credit…Andrea Chronopoulos

Twenty years ago, Amazon opened its storefront to anyone who wanted to sell something. Then it began demanding more out of them.


SEATTLE — For tens of millions of Americans, it is so routine that they don’t think twice.

They want something — a whisk, diapers, that dog toy — and they turn to Amazon. They type the product’s name into Amazon’s website or app, scan the first few options and click buy. In a day or two, the purchase appears on their doorstep.

Amazon has transformed the small miracle of each delivery into an expectation of modern life. No car, no shopping list — no planning — required.

But to make it all work, Amazon runs a machine that squeezes ever more money out of the hundreds of thousands of companies, from tiny start-ups to giant brands, that put the everything into Amazon’s Everything Store.

In more than 60 interviews, current and former Amazon employees, sellers, suppliers and consultants detailed how Amazon dictates the rules for those businesses, sometimes changing those rules with little warning. Many spoke on the condition of anonymity, for fear of retaliation by Amazon.

Amazon punishes the businesses if their items are available for even a penny less elsewhere. It pushes them to use the company’s warehouses. And it compels them to buy ads on the site to make sure people see their products.

All of that leaves the suppliers more dependent on Amazon, by far the nation’s top online retailer, and scrambling to deal with its whims. For many, Amazon eats into their profits, making it harder to develop new products. Some worry if they can even survive.

“Every year it’s been a ratchet tighter,” said Bernie Thompson, a top seller of computer accessories who Amazon has highlighted in its marketing to other merchants. “Now you are one event away from not functioning.”

Tumi, the luxury bag maker, sold its products at wholesale prices to Amazon for years. But executives said Amazon sometimes misjudged consumer demand, keeping too few bags in stock, and regularly demanded more in marketing and other fees. Last year, Tumi decided to sell its bags to another company, which then listed the items on Amazon. The arrangement gave Tumi more control over inventory and better sales data.

A few months later, Amazon gave Tumi an ultimatum: Stop selling through the middleman, or do not sell to the retailer’s 150 million customers at all.

“Some guy we had never talked to gave us a call and was like, ‘We have changed the rules,’ ” said Charlie Cole, who runs Tumi’s online business. He pushed back, but wasn’t successful.

“It was like talking to a brick wall,” he said. “They want to be able to control everything.”

Companies struggling to navigate Amazon’s growing chaos fill Facebook groups, private message boards and industry conferences. One session at a leading retail meeting next year is called “The Big Question: Is Selling on Amazon Worth the Hassle?” More than 12,000 people signed a petition on Change.org asking Amazon to alter an arcane rule on counterfeit products that they said could “destroy” an entire business.

Many sellers and brands on Amazon are desperate to depend less on the tech giant. But when they look for sales elsewhere online, they come up short. Last year, Americans bought more books, T-shirts and other products on Amazon than eBay, Walmart and its next seven largest online competitors combined, according to eMarketer, a research company.

“The secret of Amazon is we’re happy to help you be very successful,” said David Glick, a former Amazon vice president who left the company last year. “You just have to kiss the ring.”

Amazon says that its operation is so massive, the rules are necessary to give customers a quality experience. The company said the health of sellers was a top priority, and that it had invested billions of dollars to support them. It said that about 200,000 sellers surpassed $100,000 in sales in 2018, roughly a 40 percent increase from the year before.

“If sellers weren’t succeeding,” said Jeff Wilke, the chief executive of Amazon’s consumer business, “they wouldn’t be here.”

Jack Evans, a spokesman for the company, said that Amazon only succeeded when sellers succeed, “and claims to the contrary are wrong.” Merchants can choose the products they sell, how they are priced and how they fulfill the orders, he said.

The policy change that affected Tumi, Mr. Evans said, was to make sure that Amazon had the best prices and availability for popular products. He said that Tumi’s prices were high when it sold through the middleman.

Amazon has faced harsh criticism in the past for displacing Main Street brick-and-mortar retailers. Now, the diverging fortunes of Amazon and many of the companies selling products on its own site are at the heart of the antitrust scrutiny Amazon faces in Washington and Europe. Investigators at the Federal Trade Commission and the House Judiciary Committee are examining whether Amazon abuses its position as the central online connection between people making products and those buying them.

Amazon collects 27 cents of each dollar customers spend buying things its merchants sell, a 42 percent jump from five years ago, according to Instinet, a financial research firm. That does not include what companies pay to place ads on Amazon, a business that Wall Street considers as valuable as Nike.

The pennies add up. Last year, the profit from retail was so high that it surprised even some senior leaders close to the business, according to two of the people involved.

Thanks to the retail success, the company’s profit exceeded its own Wall Street projections by more than $3 billion.

Jeff Bezos, Amazon’s founder and chief executive, lumps the many parts of the company into two buckets, according to the two people close to the business. One bucket is investments, or bets on the future like Alexa, its virtual assistant. The other is contributors, or the profitable businesses that provide money for Amazon’s investments.

To him, the retail operation is a contributor that can be squeezed for cash.

Billions of dollars generated from selling products online go into investments like Alexa, which has 10,000 employees working on it, and the company’s expensive Hollywood productions. And still, Amazon’s consumer businesses, including Alexa and other pricey projects, produced $5 billion in operating profit last year.

The financial success stems from a big strategy shift that was underappreciated when Mr. Bezos made it two decades ago.

From the day the company started shipping orders in 1995, Amazon offered customers products the same way as traditional retailers like Target, buying them at wholesale and reselling them at a higher price. Four years later, Mr. Bezos and his team decided that Amazon would also let companies list items on the site for a cut of the sale, more like eBay and Alibaba. The change allowed Amazon to offer a wider variety of products.

“We want to try and build a place where people can come to find and discover anything that they might want to buy online,” Mr. Bezos said that year.

The decision eventually turned Amazon into the one-stop shop it’s known as today. Shoppers could find not only well-known brands like Tide detergent, but also obscure Christmas ornaments.

Initially, the move empowered sellers and gave them access to millions of customers. They could ship their products however they wanted. And they could set their own price.

Bit by bit, the sellers lost control.

When Amazon opened its doors to sellers, the fulfillment industry — for storing, packing and shipping online orders — was in its infancy. Many top sellers on Amazon ran their own warehouses.

Seeing a competitive advantage in offering faster delivery times, Amazon opened cavernous warehouses near major cities. Inside, workers navigated endless rows to pick products from bins and pack them into boxes.

The expansion left Amazon with extra space to fill, and the company turned to sellers. It pitched them on the idea of paying Amazon to store and ship their products, even those sold on other sites.

James Thomson, a Canadian with a doctorate in marketing, managed a team responsible for signing up sellers, leading them on tours of Amazon’s facilities near Reno, Nev., Phoenix and elsewhere. “Look how vast this is,” he recalled telling sellers. “Look at how we can easily absorb your 10,000 orders a month.”

“You do have a bigger warehouse than mine,” Mr. Thomson remembered them saying, “but I have good rates.”

Several years later, Amazon’s focus changed, and so did its pitch.

In early 2011, only a few million people were Prime members, paying $79 a year for unlimited two-day shipping. But Amazon knew those members spent far more on the site. Executives wanted more people to sign up for Prime, and they wanted to sell those customers even more stuff.

That year, Amazon began adding more perks to Prime. Most notable was unlimited video streaming of TV shows like “Mister Rogers’ Neighborhood” and movies like “The Girl With the Dragon Tattoo.”

As more people became members, products eligible for Prime shipping became more popular. Amazon reminded sellers that if they used the company’s warehouses, their items would be Prime eligible, too.

“That is what we were selling,” Mr. Thomson said.

It worked. The number of sellers using Amazon’s warehouses increased by 65 percent in 2013, according to a letter sent to investors. The company has since spent billions of dollars to continue building out its fulfillment network.

Mr. Bezos noted how intertwined sellers, warehouses and Prime had become in a note to investors in 2015. “At this point, I can’t really think about them separately,” he wrote.

Amazon has since flipped back and forth over whether outside sellers must use Amazon’s warehouses to sell Prime products. But for most types of goods, like pet supplies, cameras and baby gear, more than 85 percent of the top-selling items ship out of Amazon’s warehouses, according to Jungle Scout, which provides data to Amazon sellers.

Amazon handles packing and shipping for the most popular products sold on its site, even for products sold by outside sellers.

The 1,000 top-selling

products in each category

Orders sold and fulfilled

by outside sellers

Kitchen/dining

Pet supplies

Camera/photo

Beauty/personal care

Computers/accessories

Orders sold

and fulfilled

by Amazon

Orders fulfilled

by Amazon

for outside

sellers

Clothing, shoes/jewelry

Video games

Home/kitchen

Toys/games

Musical instruments

Cell phones/accessories

Tools/home improvement

Industrial/scientific

Patio, lawn/garden

Grocery/gourmet food

Sports/outdoors

Automotive

Arts, crafts/sewing

Health/household

Appliances

Electronics

Office products

Percentage of total

sales within each group

The 1,000 top-selling products in each category

Kitchen/dining

Pet supplies

Camera/photo

Beauty/personal care

Computers/accessories

Orders fulfilled

by Amazon

for outside

sellers

Orders

sold and

fulfilled

by outside

sellers

Orders sold

and fulfilled

by Amazon

Clothing, shoes/jewelry

Video games

Home/kitchen

Toys/games

Musical instruments

Cell phones/accessories

Tools/home improvement

Industrial/scientific

Patio, lawn/garden

Grocery/gourmet food

Sports/outdoors

Automotive

Arts, crafts/sewing

Health/household

Appliances

Electronics

Office products

Percentage of total sales within each group

Source: JungleScout

By Karl Russell

Amazon has surpassed DHL to become the largest provider of fulfillment and other logistics services in the world, according to The Journal of Commerce, a trade publication.

Many sellers say that the company charges fair rates to fulfill Amazon orders. But they say Amazon is charging them higher prices for other services. For example, because the warehouses operate near capacity, the company charges several times more than competitors to store items before they ship out.

The costs can be several times higher for sellers who use Amazon to ship orders made on other websites. Amazon charges $13.80 for one-day shipping on a T-shirt bought on a site other than Amazon, versus $3.68 when bought on Amazon.

In addition, Amazon had let sellers pay $1 to ship an order in a plain brown box without the company’s smile logo. But in 2016, the company said it would use only Amazon boxes. Sellers were told they could take their product back from Amazon’s warehouses if they wanted. “Return or disposal fees will apply,” it wrote to sellers.

Amazon says that its logistics services are optional and a great value. Sellers who choose to use it “enjoy high-quality fulfillment services that customers want,” the company told Congress’s investigators this year.

The company says it offers lower costs on Amazon orders because it makes other money from them, including commissions and advertising, that it does not get for sales made on other websites.

Shoppers on other sites turn away when products are not available in two days or less, said Karl Siebrecht, co-founder of Flexe, a start-up that connects retailers with a network of fulfillment centers.

“It’s new browser,” he said. “Amazon.com. Click. Buy. Done.”

This summer, Brandon Fishman, the founder of VitaCup, a start-up that infuses coffee with vitamins and nutrients, saw a promising opportunity.

Zulily, an e-commerce site that offers low prices in exchange for slower shipping, wanted to list VitaCup’s products 30 percent off for a short time. It was a chance for Mr. Fishman, whose 35-employee company gets the majority of its sales through Amazon and its own site, to reach new customers.

But Amazon’s software noticed the lower price and removed the bright “Buy Now” and “Add to Cart” buttons from its site. When those buttons are gone, shoppers get a bland text link that says, “Available from these sellers” and they must make more clicks to purchase an item. Those extra clicks are often the difference between success and failure for a seller.

Mr. Fishman’s Amazon sales tumbled, and he emailed Zulily to quickly take down the listing.

“I have told them about my rage many times,” Mr. Fishman said of Amazon. “It has not changed them.”

Amazon has pushed to keep prices low since the day it opened. That has become trickier as more sales came from outside sellers. According to antitrust law, each seller of goods should determine what to charge on its own. To avoid problems, an in-house lawyer is typically present when internal Amazon teams discuss pricing, according to two former employees.

In 2017, Amazon began reducing prices to match competitors; if the new price was lower than the one requested by the sellers, Amazon paid the difference. The company also alerted companies if their products were cheaper elsewhere.

Still concerned about news reports that prices on Amazon weren’t always the lowest, the company tried another approach, the one that hit VitaCup: removing the Buy Now and Add to Cart buttons when its software detected lower prices. When those buttons disappear, sales tumble as much as 75 percent, sellers say.

Executives at Amazon intended this as a tool to lower prices. The company has told Congress that the buttons amount to an endorsement, saying it only displays them on “offers that it is confident will present a great experience for its customers.”

But many brands raise their prices elsewhere to avoid losing the buttons. Or they decide to list their product only on Amazon. That is what happened to a health care supply company that worked with Jason Boyce, who advises online sellers.

“My client cut off Walmart — Walmart! — because it was hurting their Amazon business,” Mr. Boyce said. “If that’s not monopoly power, I don’t know what is.”

Amazon said in statement that sellers “have full control of their own prices both on and off Amazon,” and that the company helps them maximize sales by advising them how to earn the Buy Now and Add to Cart buttons.

The Zulily experience frustrated Mr. Fishman. But he boiled over after another move by Amazon.

One morning in June, Mr. Fishman opened his Amazon app and typed “VitaCup” into the search bar at the top of the screen. On the results page was an ad for Amazon’s own line of coffee.

He had been paying Amazon almost $200,000 a month for ads. Mr. Fishman posted a screenshot on LinkedIn and raged.

“I have a major problem with this!!!” he wrote.

For years, the question of whether Amazon should push ads on its site generated fierce debate among senior managers and executives inside the company, according to eight current and former Amazon employees. In memos and fiery meetings, they disagreed on what was best for a company that preached obsession with serving customers.

One camp believed that ads would erode customer trust, because shoppers expected Amazon to show them popular products with strong reviews and a good price.

The other camp saw ads as a cash machine Amazon could tap to drive down prices and fund new innovations for customers. The financial potential was obvious. When people shop online, they more often turn to Amazon than Google to start their search, according to multiple studies. And every brand wants to get in front of them.

Workers eventually got word that Mr. Bezos had settled the debate, according to two senior employees. Mr. Bezos said that Amazon had two options: Sell ads, and use the cash for investments. Or shun ads, and get beaten by competitors.

Ads soon appeared at critical locations, in particular on the page that pops up after a customer types a product into Amazon’s search bar. Some ads were rectangular blocks across the top of the page, and the top several products listed in the search results were ads disguised as a regular listing, aside from the word “Sponsored” in light gray. Combined, they have at times filled almost the entire first screen.

Mr. Wilke said the internal hesitation to ads was overcome by the results.

“It turned out they worked,” he said. “And by worked, I mean the ads help customers find what they’re looking for. And the reason we know that is cause they buy more stuff.”

But it added another cost for companies. Ranking high is essential to driving sales on the site. Competitors raced to place ads to ensure a prominent spot.

Out of antitrust concerns, company lawyers prohibit employees and advertising companies it works with from bragging that Amazon is where most people search for products online, according to two people who were warned about this.

Quartile, among the largest of a new breed of companies that help brands navigate Amazon advertising, tested the importance of the ads last year. It stopped running ads for 750 popular products. Immediately, sales shrank by 24 percent.

The effect then cascaded. That’s because the fewer recent sales a product has, including sales driven by ads, the lower it ranks on the site. At the end of 10 weeks, sales of the products without ads had tumbled 55 percent.

“It’s increasingly pay-to-play,” said Melissa Burdick, a 10-year Amazon veteran who now advises major consumer brands.

Amazon said its ads were optional and the majority of sellers built their businesses without them.

John Denny, who ran e-commerce for the drink company Bai, said brands used to believe that if they had a great product, it would show up in the search results, and sales would follow.

“Those days are over,” Mr. Denny said. “There are no lightning strikes on Amazon any more.”

A decade ago, Mr. Thompson, a former Microsoft software developer, recognized a big market for computer accessories like computer docking stations and cables. He started Plugable and betted big that depending on Amazon would turn his idea into a business.

It worked. In 2016, Mr. Bezos highlighted Mr. Thompson when talking about the success of sellers in his annual letter to investors. Amazon posted a video about Plugable on its website to attract new sellers.

“He has a history of good performance metrics, and an absence of things like safety and authenticity complaints,” Chris McCabe, a former Amazon fraud investigator, said in an interview.

But in the last couple of years, as rules shifted and his profit shrank, Mr. Thompson began warning people that working with Amazon had become increasingly difficult.

He took his concerns to Amazon this summer, giving a 20-slide presentation to a senior executive at the company’s Seattle headquarters. On slide No. 6, Mr. Thompson laid out his nightmare: Amazon cutting off sales of his best seller, a laptop docking station that is frequently one of the 100 most popular electronics products on the site.

His plea to the executive was simple. “No surprises,” he said.

He got surprised.

One Sunday in July, he got an email saying that Amazon had removed the docking stations. Amazon said it was because of complaints that Plugable’s products had not matched the condition described on the site.

Other docking stations, including one made by Amazon, filled the void online.

Mr. Thompson scrambled, contacting two high-level managers he knew and his account manager, who Amazon charges him $5,000 a month to have. None of them could fix it.

He and other staff members dug through customer feedback and returns. They found only outstanding reviews, said Gary Zeller, one of Mr. Thompson’s deputies.

“There was nothing borderline about it,” Mr. Zeller said.

After four days and at least $100,000 in lost sales, the listing went back up. Mr. Thompson said he still did not understand what ignited the problem.

Amazon declined to comment on Plugable. Mr. Wilke said that the company’s future depended on policing the site without harming well-meaning merchants.

“We have a strong incentive to be as accurate as possible in identifying bad actors, make very few mistakes when we’re wrong, on giving second chances to people who make an honest mistake,” he said.

Mr. Thompson is now looking for new ways to make money. But Amazon accounts for roughly 90 percent of electronics sales online, according to market research. His business at Walmart and eBay, the next largest online retailers, are less than 5 percent of his revenue.

In September, Plugable hired two people to sell directly to corporations.

“We really built the company on Amazon,” Mr. Thompson said. “We have no regrets about doing that. But today our focus has to be getting diversification off Amazon.”

He said he understood what he was up against.

“We are dealing with a partner,” he said, “who can and will disrupt us for unpredictable reasons at any time.”

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Odoo grabs $90M to sell more SMEs on its business app suite

Belgium-based all-in-one business software maker Odoo, which offers an open source version as well as subscription-based enterprise software and SaaS, has taken in $90 million led by a new investor: Global growth equity investor Summit Partners.

The funds have been raised via a secondary share sale. Odoo’s executive management team and existing investor SRIW and its affiliate Noshaq also participated in the share sale by buying stock — with VC firms Sofinnova and XAnge selling part of their shares to Summit Partners and others.

Odoo is largely profitable and grows at 60% per year with an 83% gross margin product; so, we don’t need to raise money,” a spokeswoman told us. “Our bottleneck is not the cash but the recruitment of new developers, and the development of the partner network.

“What’s unusual in the deal is that existing managers, instead of cashing out, purchased part of the shares using a loan with banks.”

The 2005-founded company — which used to go by the name of OpenERP before transitioning to its current open core model in 2015 — last took in a $10M Series B back in 2014, per Crunchbase.

Odoo offers some 30 applications via its Enterprise platform — including ERP, accounting, stock, manufacturing, CRM, project management, marketing, human resources, website, eCommerce and point-of-sale apps — while a community of ~20,000 active members has contributed 16,000+ apps to the open source version of its software, addressing a broader swathe of business needs.

It focuses on the SME business apps segment, competing with the likes of Oracle, SAP and Zoho, to name a few. Odoo says it has in excess of 4.5 million users worldwide at this point, and touts revenue growth “consistently above 50% over the last ten years”.

Summit Partners told us funds from the secondary sale will be used to accelerate product development — and for continued global expansion.

“In our experience, traditional ERP is expensive and frequently fails to adapt to the unique needs of dynamic businesses. With its flexible suite of applications and a relentless focus on product, we believe Odoo is ideally positioned to capture this large and compelling market opportunity,” said Antony Clavel, a Summit Partners principal who has joined the Odoo board, in a supporting statement.

Odoo’s spokeswoman added that part of the expansion plan includes opening an office in Mexico in January, and another in Antwerpen, Belgium, in Q3.

This report was updated with additional comment