How Tech Regulation Bills in Congress Could Negatively Impact Communities of Color
The emergence of the COVID-19 pandemic in 2020 and the accompanying global shut-downs altered the ways in which we conduct our lives. We came to rely on technological tools and digital services to maintain community, conduct work, and carry out errands. The pandemic “accelerated the shift towards a digital world” with consumers now shopping online more frequently.
In the wake of this transition to a more digital world, bills were introduced in the U.S. House of Representatives and Senate — the “American Choice and Innovation Online Act” and “American Innovation and Choice Online Act” respectively to address “discriminatory conduct” by online platforms.” The bills make it unlawful for companies such as Amazon and Google to engage in conduct that “advantages” their own products, services, or lines of business, or “excludes” products, services, or lines of business of other companies. Companies are also prohibited from “conditioning” access to features available to them on purchase by third party vendors.
These bills will have a major impact on the way companies offer products and services that are highly rated and used by consumers of color, as well as small businesses owned by people of color. across the country. Services such as Amazon Prime, AmazonBasics and Google Search will undoubtedly be impacted and degraded by the provisions of these bills.
Amazon Prime is the subscription service that provides customers with free same, one or two-day shipping on products sold by Amazon or third party sellers who use Amazon’s Fulfillment by Amazon (FBA) Service. AmazonBasics provides white-labeled low cost products under Amazon’s own brand, and Google Search curates recommendations for customers on relevant goods and services near their location including information on distance or location via its mapping platform. All of these services are those being directly targeted by the proposed bills.
How Communities of Color Use Amazon Prime
The Amazon marketplace, with its two main flagship offerings — Amazon Prime and AmazonBasics, has provided low-cost quality alternatives and easy shopping experiences for individuals and families who do not have the cash, time or physical ability to venture out to retail stores or supermarkets. The wide array of goods in the Amazon marketplace including household goods and personal essentials have also become a key resource for a wide variety of households and communities.
In order to begin understanding how communities of color use tech products such as Amazon Prime and Google Search, we commissioned an online survey using SurveyMonkey of over 600 respondents between Feb 22nd and 23rd. 30% of respondents identified as Black or African American, Hispanic and Asian or Pacific Islander respectively. 5% identified as American Indian or Alaskan Native with the final 5% belonging to multiple ethnicities. Respondents were 53% female, 47% male and hailed from various regions of the country. All age groups were represented in the survey with 26% of respondents aged between 18–29; 23% between 30–44; 37% between 45–60 and 14% over 60.
Almost 80% of respondents stated that they browse on Amazon.com at least once a week, with approximately 30% using Amazon everyday. People of color who shop on Amazon do so to meet a wide range of needs with 76% shopping for household items such as detergent, paper towels, kitchen utensils and so on; 28% shopping for groceries and 52% shopping for clothing items.
When asked about their reasons for using Amazon, 75% and 61% of respondents highlighted the convenience and quick and predictable delivery respectively. Almost half of respondents also identified the breadth of choice available and cost as drivers of their use of Amazon. Other reasons provided include the quality of customer service (including ability to see reviews and easy returns).
77% of respondents have an active Amazon Prime membership. Of this number, the vast majority (82%) pointed to the free fast delivery service as a major selling point for them. Others highlighted the cost and additional services included in Amazon Prime memberships.
These benefits that are highly ranked by respondents are those being directly threatened by the bills introduced in Congress. Amazon’s ability to provide free one-day or two-day shipping, a service predicated on its ability to offer Prime membership to consumers and Fulfillment by Amazon services to third-party vendors is a service highly used and rated by people of color.
Individuals on government assistance programs such as SNAP EBT are also able to access the wide range of personal and household essentials options in the Amazon store with a Prime discount. This amounts to 42 million Americans, of which 26% are African American, 16% Hispanic and 3% Asian.
How Communities of Color Use Amazon Basics
In addition to Amazon Prime memberships, over 70% of survey respondents stated that they shop the AmazonBasics brand. 71% of those pointed to the cost of the products, with 64% highlighting the fact that products are readily available and 32% choosing the quality of the products offered as reasons they purchase products offered by Amazon under this brand.
Consumers of color are therefore choosing to purchase AmazonBasics as a cheaper and better value for money alternative to other brands they may have access to.
How Communities of Color Use Google Search
Neighborhoods predominantly made up of residents of color tend to have less digital engagement with their local businesses with fewer reviews, lower ratings and rankings on sites such as Yelp.
For instance, businesses in neighborhoods with very few Black residents were shown to receive twice as many reviews as businesses in neighborhoods with mostly Black residents making it hard to find and engage with great local businesses online. Google Search with its integrated Maps function provides vital information about the existence of businesses, their product or service offerings and business details and has been helping communities of color identify and connect with resources such as restaurants or salons (often run by other members of the community) near them.
Our survey showed a high level of engagement with, and use of Google Search by people of color. Approximately 82% of respondents use Google Search at least once a week, with 72% stating that they use Google Search everyday.
The majority of respondents used Google Search to find the location of businesses near them, with 20% also using it to look up customer reviews for businesses.
With the COVID-19 pandemic leading to the widespread closures of physical establishments and restrictions against gatherings forced a lot of small businesses to pivot to the digital space. Businesses owned by people of color however struggled with that transition more than their White-owned counterparts. For instance, although Black and Latino-owned businesses reported trying to increase their online presence more than White-owned businesses, they were more likely to have trouble establishing a strong digital presence.
With almost half and over a third of Black and Latino business owners respectively struggling to establish a strong digital presence, digital tools such as Google Search have helped raise the profiles of these businesses and provided digital support. Various initiatives launched by Google to highlight the digital presence of minority-owned small businesses such as specific community or identity tags helped attract significantly more customer attention with searches for “Black owned businesses” on Google increasing 600% in 2020.
Consumers and small business owners of color have been underserved and undervalued by large retail stores and supermarkets for several years. Tech-based services such as Amazon Prime, AmazonBasics and Google Search have gone further in filling the gap and addressing this neglect. Regulators should understand these impacts before seeking to undo the progress made.
The Chamber of Progress (progresschamber.org) is a new center-left tech industry policy coalition promoting technology’s progressive future. We work to ensure that all Americans benefit from technological leaps, and that the tech industry operates responsibly and fairly.
Our work is supported by our corporate partners, but our partners do not sit on our board of directors and do not have a vote on or veto over our positions. We do not speak for individual partner companies and remain true to our stated principles even when our partners disagree.
