The holiday season is a reminder that with more Americans than ever heading online to do their shopping, lawmakers must continue taking action to prevent consumers from falling prey to internet scammers. That is why it was welcome news when Amazon recently reversed course on its longstanding opposition to bipartisan consumer protection legislation in Congress that would require third-party online marketplaces to verify independent sellers, with the goal of reducing counterfeits and stolen goods from these platforms.
But while Amazon’s public change of heart seemingly paves the way for the eventual passage of the bill, known as the INFORM Consumers Act, lawmakers must ensure that the retail giant and other tech companies do not work behind the scenes to water down the legislation and render it toothless. Counterfeits pose great harm to consumers and small third-party sellers, and Congress must pass strong, comprehensive enforcement mechanisms to adequately protect both groups.
Amazon’s decision to endorse INFORM was certainly a surprise. Just this summer, Amazon launched an aggressive lobbying campaign to kill a more robust version of the legislation. But while Amazon ostensibly supports the current bill, it has reportedly unleashed its lobbyists in the Beltway to weaken it. While lawmakers such as Sen. Dick Durbin, D-Ill., one of the bill’s co-sponsors, say they refuse to let this happen, they should remain on high alert.
This is because we have seen Amazon’s playbook for publicly supporting legislation while simultaneously working to weaken it behind the scenes. For instance, Amazon CEO Jeff Bezos won praise earlier this year when he embraced President Joe Biden’s plan to raise the corporate tax rate. But behind the scenes, the company enlisted an army of lobbyists to maintain the research and development tax credit, which has been estimated to save the company hundreds of millions of dollars a year. As I have said before, Bezos’s support for a corporate tax hike is meaningless if the company can continue to engage in egregious tax avoidance schemes.
And it is not just Amazon; other Big Tech companies have resorted to similar “two-faced” tactics to weaken legislation. In April, an investigation by The Markup uncovered how some of the country’s most powerful technology companies, including Facebook and Google, advocated for mostly toothless privacy protection legislation in statehouses across the country — all with the intention of preempting state lawmakers from taking stronger action in the future.
Now with the prospect of a comprehensive consumer protection measure being signed into law, Congress must resist Amazon’s arm twisting. Counterfeits are far too serious of a threat, and watered-down legislation will fall short of creating the bold transparency measures that are desperately needed. Online counterfeiters have been known to peddle toys and children’s products, putting those most vulnerable in grave danger. These products fail to go through robust safety testing, meaning there is potential for serious health consequences.
But what many may not realize is the impact that counterfeits have on third-party sellers. As someone who works with Amazon sellers every day, I know exactly how legitimate businesses suffer when criminals sell fakes at below the market value. Small businesses are doing everything they can to fight these criminals — even if it means spending hundreds of thousands of dollars to do so.
Many of those selling fakes from the comfort of their own homes and hurting American businesses are overseas. According to the Department of Homeland Security, a staggering 85 percent of contraband items seized by U.S. Customs and Border Protection came from Hong Kong and China. Nonetheless, Amazon’s marketplace has become a hub for China-based sellers.
Amazon has no problem touting all of the measures it has taken to clean up its third-party marketplace. But, as I have explained, it is a common tactic of Amazon’s PR department to just share the numerator — and not the denominator. Thus, the $700 million it invests to fight fraud is pennies in the bucket when you consider that Amazon’s worldwide gross merchandise volume is estimated to be $490 billion.
It is critical that Congress advances the INFORM Consumers Act as it stands today. While I welcome Amazon’s endorsement of the common-sense measure — along with the other third-party marketplaces that recognize the benefits it would bring to e-commerce shopping — I can only hope it is sincere. Working behind the scenes to weaken this bill will be devastating to the millions of shoppers and sellers who have come to depend on Amazon’s third-party marketplace.
Jason Boyce is the author of “The Amazon Jungle” and founder of Amazon managed services agency, Avenue7Media. Previously, Boyce was an 18-year Top-200 Amazon seller. This piece is exclusive to Broadband Breakfast.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to email@example.com. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
CES 2022: Patreon Policy Director Says Antitrust Regulators Need More Resources
To find the best way to regulate technology, antitrust regulators need more tools to maintain fairness in the digital economy.
LAS VEGAS, January 7, 2021 – The head of Patreon’s global policy team said federal regulators need more resources to stay informed about technology trends.
Laurent Crenshaw told CES 2022 participants Friday that Congress should provide tools for agencies like the Federal Trade Commission to enforce consumer protection standards.
“I’m not going to say that big tech needs to be broken up, but there should be appropriate resources for federal regulators to understand the digital marketplace,” he said. “We’re are still living in a world that is dominated by big actors, and we’re debating about whether to even give federal regulators the power to understand how the marketplace is moving toward digital.”
Crenshaw of Patreon said that more resources were necessary at the FTC in order to understand the digital marketplace. Patreon is a membership platform that provides a subscription service for creators to offer their followers.
Such resources would empower the agency to place appropriate safeguards for smaller technology innovators. “So in 10 [or] 20 years, it’s not just the replacements of the current Google, Apple, or Facebook, but something entirely new,” he said.
Panelists echoed Crenshaw’s point that consumer welfare should guide competition policy. Tyler Grimm, chief counsel for policy and strategy in the House Judiciary Committee, said that antitrust should bend to the consumer welfare standard. “Antitrust should leave in its wake a better economy,” he said.
LeGeyt Appointed President and CEO of National Association of Broadcasters
LeGeyt was the organization’s executive vice president of government relations and COO.
WASHINGTON, January 4, 2022 – The National Association of Broadcasters has appointed Curtis LeGeyt to serve as president and CEO, replacing Gordon Smith.
“It is an honor to lead this great organization and advocate for the local television and radio broadcasters that inform, entertain and serve their communities every day,” said LeGeyt in a statement. “I am grateful to our Board of Directors for placing its trust in me and look forward to working alongside them, the entire NAB team and our members to ensure a vibrant future for broadcasting.”
LeGeyt was previously the executive vice president of government relations and chief operating officer of NAB. He holds a JD from Cornell Law School.
“We are excited to now have Curtis at the helm to guide the organization into its next chapter. He is a proven leader and skilled fighter on behalf of broadcasters, and we are thrilled to have him serve as our voice in Washington and around the world,” said David Santrella, NAB joint board of directors chairman and CEO of Salem Media Group.
The previous president and CEO, Gordon Smith, served in this role for 12 years. Smith will remain with the NAB, albeit in an “advisory and advocacy” capacity. During his tenure, NAB took a hardline on big technology companies, condemning them as a threat to small TV and radio stations that make up local media, and called for citizens to voice their concerns to legislators.
Former FTC Commissioner Calls for Increased Antitrust Enforcement Resources
An American Enterprise Institute panel proposed Congress increase regulator resources rather than actively try to hinder Big Tech.
WASHINGTON, December 14, 2021 – Former Acting Federal Trade Commission Chairwoman Maureen Ohlhausen is calling for increased resources for antitrust enforcement agencies.
Ohlhausen was joined by Massachusetts Institute of Technology economist Nancy Rose, who said the lack of agency resources is holding back FTC enforcement. Ohlhausen noted increased funding for enforcement agencies would allow them to perform studies, which could effectively determine whether anti-competitive action is currently taking place.
Both Rose and Ohlhausen, who were panelists at an American Enterprise Institute event late last month, said increasing resources would be a better approach to antitrust than many of the extensive antitrust bills that are currently before Congress.
The panel largely condemned current congressional efforts that take such steps as placing an intense focus on the activities of the largest tech companies.
This summer, the House Judiciary Committee pushed through six antitrust bills designed to target the biggest tech companies and limiting what they can do in relation to their marketplaces and with respect to mergers and acquisitions. The most controversial of the bills would allow federal regulators to sue to break up companies that both operate a dominant platform and sell their own goods or services on it if there’s a conflict of interest.
In May, Sens. Amy Klobuchar, D-Minnesota, and Chuck Grassley, R-Iowa, introduced antitrust legislation that would “ensure that antitrust authorities have the resources they need to protect consumers.” In September, at a virtual conference hosted by Politico, Klobuchar reiterated the need to better equip federal agencies with adequate resources.
“These companies know how many resources they [agencies] have,” Klobuchar said, alluding to Big Tech accelerating merger activity.
The Democrats also introduced funding avenues in their reconciliation bill for the FTC to tackle the myriad of issues related to Big Tech, including data privacy concerns and big mergers.
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