Amazon Accused of Exploiting Pandemic, Employees, and Customers
By Sonia Hasko
In light of coronavirus restrictions, shoppers have turned to Amazon, inflating its status as a monopoly. On this account, Amazon employees feel exploited, citing unsafe working conditions, and shoppers suffer the impacts of the company’s anti-competitive business tactics.
Coronavirus disproportionately affects the poor, while tech giants like Amazon experience growth and financial success. The e-commerce site has grown to epic proportions: its stock has nearly doubled since March, beating all other high points from its 26-year span as a public company (Figures 1, 2). As of August 2020, Amazon’s market capitalization is $1.6 trillion.
Recently, a Mastercard study found that e-commerce rose 93% in May, and Amazon’s first-quarter net sales increased by 26% compared to those of 2019. Amazon, which already had a monopoly in its field before March, dramatically rose in popularity when stores ceased to be an option due to coronavirus.
To meet these new demands, Amazon announced plans to hire 100,000 workers in March, and another 75,000 in April. However, current workers have protested the company’s working conditions during the pandemic. Three of these employees filed a lawsuit against the corporation for “sloppy contact tracing,” which refers to Amazon’s inaction regarding coronavirus infections within the company. In fact, several Amazon employees have died in recent months at the hands of coronavirus. Employees also pointed to Amazon’s “overcrowded” working conditions, which they feared would only be exacerbated by the new workers that were set to be hired.
Furthermore, Amazon’s monopoly status may be harming customers, with an emphasis on lower-income individuals and families. The corporation has eliminated much of its competition, thereby eliminating the need to keep prices low to draw in customers. Jeff Bezos — Amazon’s CEO and the current richest man in the world — testified before Congress on July 29 as part of an antitrust investigation. U.S. Representative Mary Gay Scanlon (D-PA) questioned Bezos’ acquisition of Diapers.com, which occurred in earlier years but the ramifications of which have struck especially hard during the pandemic. Rep. Scanlon claimed “one of the biggest needs” of families in her district during the pandemic was diapers, due to a shortage, and cited concern that “pricing might have been driven up” by Amazon’s domination of the online diaper industry. With reduced competition, Amazon is free to charge customers high prices for products.
Representative David Cicilline (D-RI) also questioned Bezos and determined that Congress “must take action” in regards to Amazon’s “dual role as a platform operator and competing seller on that platform,” which Cicilline believed would undercut third-party profits. Loss of third-party profits could lead to sector monopolization, as with Diapers.com, which would negatively impact consumers.
Nonetheless, in a statement to the U.S. House Committee on July 28, Bezos maintained that Amazon has burgeoned the economy and created millions of high-paying jobs in the U.S. and beyond. In a direct stab at Congress for failing to raise the minimum wage, Bezos reinforced Amazon’s people-centered focus, stating that his employees earn “a minimum of $15 an hour, more than double the federal minimum wage.” As part of his defense, Bezos enumerated programs that Amazon has implemented, including retirement plans, 20-week maternity leave, Career Choice, and Amazon Future Engineer.
The company has further defended employee treatment, citing a $2-an-hour pay raise and double overtime pay between March and May. Amazon released a statement along with its first-quarter earnings in April claiming the purchase of 100 million face masks and 31,000 thermometers for employee safety purposes.
Joe Kennedy, a senior fellow of the Information Technology and Innovation Foundation, has studied internet monopolies and concluded that concerns regarding monopolies and consumers are misplaced. Kennedy spotlights Amazon’s anti-competitive practices, which involve eliminating the competition. He alleges “no real documents” prove these practices harm consumers.
Still, Amazon accounts for nearly 40% of e-commerce in the U.S. This grasp on the economy and the infiltration of American households, browsing histories, and small business sales worries society and elected officials, who rank the power of Amazon’s $1.6 trillion price tag above the corporation’s kind deeds.
The same goes for Bezos, whose $188.7 billion net worth has been criticized as his workers earn an average of $32,055/year and his customers are forced to bend to Amazon’s policies. Paul Sonn, state policy director of the National Employment Law Project, once called Amazon “an aggressive cost cutter.” Despite the immense wealth of both the company and its CEO, Amazon continues to prioritize financial incentives over workers’ rights and customer ethics.
Economists have condemned monopolies since Rockefeller’s time, but resentment becomes inevitable as our death toll rises and the economy plummets, while a wealthy corporation grows. Yet Bezos maintains his belief in Amazon’s humanity amid this year’s rubble: “I have never been more optimistic about our future.”
