Transcript

Amazon Empire: The Rise and Reign of Jeff Bezos

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FEMALE NEWSREADER:

Jeff Bezos has already conquered the retail frontier. Now he's got a plan to colonize the planet.

MALE NEWSREADER:

Bezos is laying out his plans for colonizing space.

FEMALE NEWSREADER:

Bezos is known for going big, and now he's literally shooting for the moon.

NARRATOR:

In May of 2019, Jeff Bezos, the richest person on the planet, unveiled his latest invention.

JEFF BEZOS:

This is Blue Moon. It’s time to go back to the moon, this time to stay.

JOSHUA WEINSTEIN, Jeff Bezos’ friend:

Jeff has said over and over again that the most important work he’s doing is work in space. What he’s built with Amazon is really important and really interesting and it’s revolutionized commerce. But it’s only revolutionized commerce.

NARRATOR:

Bezos’ plan is to chart a new course for the future of humanity.

JEFF BEZOS:

—manufactured worlds rotated to create artificial gravity with centrifugal force. These are very large structures, miles on end. And they hold a million people or more each.

NARRATOR:

It’s an idea he’s had since he was a teenager.

JEFF BEZOS:

This is me in high school. And I want to highlight this quote: “The earth is finite, and if the world economy and population is to keep expanding, space is the only way to go.” I still believe that.

CHRISTIAN DAVENPORT, The Washington Post:

The way Jeff Bezos see is it is that consumerism is an example of how today’s society lives better than our parents did, and our grandparents, and he wants future generations to continue to have an increasingly better lifestyle.

JEFF BEZOS:

These are beautiful. People are going to want to live here.

NARRATOR:

Bezos unveiled his extraterrestrial plans at a time of growing concern about the empire he’s built here on Earth.

FEMALE NEWSREADER:

Amazon is the great disrupter, from books to retail to grocery stores.

NARRATOR:

For more than 25 years, Jeff Bezos has been disrupting and transforming almost every aspect of our modern lives.

AMY WEBB, CEO, Future Today Institute:

Once you start connecting the dots, you see that Amazon is building all of the invisible infrastructure for our futures.

FEMALE NEWSREADER:

Amazon announced a health care partnership.

MALE NEWSREADER:

Amazon is helping the CIA build a secure cloud—

CHARLIE ROSE, 60 Minutes:

How much of the internet do you run?

JEFF BEZOS:

That’s a good question. It’s a lot, though.

NARRATOR:

But in recent years, Amazon and Bezos have come under scrutiny for their aggressive tactics and expanding power.

FRANKLIN FOER, The Atlantic:

Everything that is admirable about Amazon is also something that we should fear about it.

NARRATOR:

For the past year, we’ve been investigating how Jeff Bezos built his empire and at what cost.

JEFF BEZOS:

And so think about this: Big things start small.

NARRATOR:

Jeff Bezos' empire has its roots not in Silicon Valley, but on Wall Street. That's where the young Princeton graduate went to work in the early 1990s at a secretive hedge fund called D.E. Shaw.

ANDREAS WEIGEND, Former chief scientist, Amazon:

David Shaw was the one revolutionized Wall Street by introducing data. And I think Jeff really embraced that, that idea that, hey, if you have data, ultimately, you win.

BRAD STONE, Author, "The Everything Store":

One of the things that David Shaw asked Jeff Bezos to do was to go and investigate new businesses, and in particular this new thing in the early '90s called the World Wide Web.

TOM BROKAW:

We all know that a communications revolution is underway in this country—

BRYANT GUMBEL:

What is the internet?

FEMALE GUEST:

It’s sort of the mother of all networks.

VICE PRESIDENT AL GORE:

It’s an information highway.

FEMALE TEEN:

It’s kind of like your remote control to the world.

NARRATOR:

Bezos was quick to see the untapped potential of the new digital landscape and was determined to get in on it.

JEFF BEZOS:

I came across this startling statistic that web usage was growing at 2300% a year. So I decided I would try and find a business plan that made sense in the context of that growth, and I picked books as the first best product to sell online.

Because books are incredibly unusual in one respect, and that is that there are more items in the book category than there are items in any other category by far. So when you have that many items you can literally build a store online that couldn’t exist any other way.

NARRATOR:

The store he was imagining didn’t exist, so he decided to build it himself.

BRAD STONE:

The reaction to Jeff's idea to start selling books on the internet was pretty incredulous from a lot of the people close to him. His mom tried to convince him to just do it at night or over the weekends; she didn't want to see him give up his job.

JOSHUA WEINSTEIN:

Jeff called and he told me that he and MacKenzie were quitting their jobs and they were moving to Seattle and starting a company. I said, "Great! Well, what are you going to do?" He said, "We’re going to sell books." I said, "Nice." He said, "On the internet." I said, "Oh. Jeff, why will anybody buy anything from you?" And he said, "Well, we’re going to have more books than anybody else."

NARRATOR:

One of the first names Bezos considered for his new website was Relentless.com.

JAMES JACOBY, Correspondent:

Why “relentless"?

JOSHUA WEINSTEIN:

Relentless meant "we move on no matter what." He ultimately obviously decided that relentless wasn’t quite the right fit. Amazon, Earth’s largest river, was. Amazon means "gigantic."

JAMES JACOBY:

In terms of relentlessness, of stopping at nothing, is that an apt description of Jeff?

JOSHUA WEINSTEIN:

No. It's not that Jeff stops at nothing. It's that when Jeff sets his mind on a goal that he thinks he can achieve, he won’t stop until he’s proven wrong or until he achieves it.

SHEL KAPHAN, Former chief technical officer, Amazon:

Jeff and MacKenzie had rented a house in Bellevue. And then we moved to a small second-floor office in the south part of Seattle.

NARRATOR:

Shel Kaphan was Amazon employee No. 1, one of nine former Amazon insiders who agreed to talk on camera.

SHEL KAPHAN:

What the company is now was nowhere in my wildest imagination. Nowhere. So the fact that it could have the kind of position in the world that it has now, I had no clue.

NARRATOR:

In July 1995, Amazon.com went live.

JAMES MARCUS, Former senior editor, Amazon:

It was an incredible novelty; it was tiny and obscure; and it’s very hard to imagine, but the entire universe that Amazon now dominates did not exist.

MALE NEWSREADER:

Amazon.com. This virtual shop claims to be the world’s largest bookstore.

NARRATOR:

It didn’t take long for Bezos’ vision to prove prescient.

JEFF BEZOS:

What makes us different is vast selection, convenience—we deliver right to the desktop. If our catalog were printed on paper it would be the size of seven New York City phone books.

NARRATOR:

The company quickly outgrew the garage and soon had more than 50 employees. In 1996, James Marcus applied to be No. 55.

JAMES MARCUS:

There was a very palpable excitement in the air at this place, and of course at this point Jeff Bezos was the first person to interview every prospective employee, so I was ushered into his office. He wanted to see how fast you are on your feet. He also always wanted to know your SAT scores.

JAMES JACOBY:

He wanted to know your SAT scores?

JAMES MARCUS:

Every time, yes.

JAMES JACOBY:

How old were you at the time?

JAMES MARCUS:

I was 36 or 37.

JEFF BEZOS:

This is the original sign that I made for Amazon.com. Blue spray paint on white poster board.

JAMES MARCUS:

Jeff wasn’t a figure out of folklore at that point. He was not the wealthiest man in the world.

JEFF BEZOS:

Here’s my computer, Amazon.com up on the screen. Hello, Jeff Bezos.

JAMES MARCUS:

He was a small, nondescript, sandy-haired man sitting at a desk, with quite a large and eruptive laugh.

But he wasn’t threatening. He was a normal guy to a sort of amazing extent.

JEFF BEZOS:

Hal 9000 hat. Very important. Hal and I share a birthday, we’re both born on January 12th.

JAMES MARCUS:

It belied an enormous Napoleonic ambition.

JEFF BEZOS:

One of the people I really like, Thomas Edison. Here’s a model of his original light bulb. He’s famous for saying, "1% inspiration, 99% perspiration." [Laughs] It turns out ideas are the easy part. Execution is everything.

JAMES MARCUS:

Domination was on Jeff’s mind from the beginning. One of his sort of second-in-command people said to me, "You have to understand that Jeff wants to sell many more things than books. And Jeff’s idea is that in the near-distant future you could buy a kayak from Amazon. And after you bought the kayak, you could figure out good places to kayak and buy travel services from Amazon.” So, those ambitions were very clear, and this was very early on. But he was clearly thinking in those terms from the get-go.

JAMES JACOBY:

How did that ring to you at the time?

JAMES MARCUS:

A little bit exciting and a little bit nutty.

JEFF BEZOS:

Amazon.com. Very good website. You should really try it. [Laughs]

JAMES MARCUS:

If you signed on to work at a kind of futuristic bookstore and the guy who owned it was suddenly talking about selling every object in the universe, you just weren’t sure how seriously to take it.

NARRATOR:

Though his public image was often unserious—

JEFF BEZOS:

That was awesome!

NARRATOR:

—inside the company, Bezos was a hard-charging manager relentlessly focused on the principle that would make Amazon one of the most trusted brands in the world: The customer always comes first.

JEFF BEZOS:

This culture of customer obsession—

—obsessive focus on customer—

—obsesses over our customers—

—totally obsessing over the customer experience.

JENNIFER CAST, Vice president, specialty recruiting, Amazon:

We used to call it "customer ecstasy." It means building, delivering, focusing on your customer, and we did it in the very, very early days at every stage.

NARRATOR:

Jennifer Cast was there in the early days and is one of six top Amazon executives the company put forward to speak to us.

JENNIFER CAST:

Customer obsession was our North Star. And so it was a place where we knew we were a part of something that was new, the internet. There was an excitement that we were doing something that hadn't been done before. It was exhilarating. We were all aligned around building for customers.

JEFF BEZOS:

Hey, you guys! [Laughs]

JAMES JACOBY:

I’ve heard there was an empty chair that would often be put at meetings. Who was in the empty chair?

JOHN ROSSMAN, Former director, Marketplace division, Amazon:

Yeah, so that empty chair was there to remind us all to understand the customer, have empathy for the customer, understand the details of the customer experience. The customer isn’t there; we have to bring forward the voice of the customer.

MALE AMAZON OPERATOR:

Thank you for calling Amazon.com.

NARRATOR:

And Bezos quickly learned that, in this new online world, he could understand exactly how customers were behaving.

FEMALE AMAZON OPERATOR:

All orders do need to be placed online, but I'd be happy—

JAMES MARCUS:

It was made clear from the beginning that data collection was also one of Amazon’s businesses. All customer behavior that flowed through the site was recorded and tracked. And that itself was a valuable commodity.

FEMALE AMAZON OPERATOR:

  1. Have you visited our website?

RANDY MILLER, Former director, Pricing & Product Management, Amazon:

We could track how a customer navigated through the site. So we could see what you looked at; we could also see what you paused at; we could see what you put in your basket but didn’t order; we could see what you put in your basket and did order. So that’s when we started realizing, man, this is rich, this is rich rich rich. And so we’ve used it for everything.

MALE REPORTER:

What do you do with that information?

JEFF BEZOS:

That’s the data that allows us to predict, or try to predict, what books that you would like that you haven’t discovered yet.

NARRATOR:

Bezos treated the site as a laboratory where he studied customer behavior along with his chief scientist, Andreas Weigend.

ANDREAS WEIGEND:

I was shocked to see how predictable people are. If you take the time of the day into account, if you take maybe when they were last on the site, how long they were on the site last time, how long they’re on the site today, you know what they’re falling for.

ROBERT FREDERICK, Former senior manager, Amazon Web Services:

Whoever owns—collects the data. If you have access to and rights to data, then you are king. It’s all about the data. Everything.

JEFF BEZOS:

One of the most fascinating kind of tools we have at our disposal is the ability to do active experiments. It's kind of this huge laboratory.

ANDREAS WEIGEND:

We did not think about it as exploiting. We thought about helping people make better decisions.

JAMES MARCUS:

I was starting to feel that that was less respectful toward the consumer, who was after all was supposed to be our god, the person whose ecstasy was our very reason for being. And it was closer to getting a cow into a milking stall and extracting as many pails as possible during each visit, and that felt a little more unsavory. But that was the business of Amazon.

FEMALE NEWSREADER:

Amazon has added 880,000 new customers—

NARRATOR:

While Bezos was using these insights to bring more and more customers into Amazon—

MALE NEWSREADER:

The number of customers who use the website has increased fourfold—

NARRATOR:

—there was one thing he hadn’t done yet.

JAY LENO:

The company’s never made a profit.

JEFF BEZOS:

That’s right. [Laughter]

JAY LENO:

Now, why? How does that—why?

JEFF BEZOS:

Seems like a new math, doesn’t it?

NARRATOR:

Bezos would spend years losing money trying to beat his competition, and he convinced investors to go along with it.

JAMES THOMSON, Former senior manager, Amazon:

One of Jeff Bezos’ greatest accomplishments has been his ability to get Wall Street to accept the fact that for 20-some years, Amazon wasn’t going to be very profitable. And that’s OK because they’re building infrastructure that will create huge opportunities for them to gain scale and gain customers and gain business.

NARRATOR:

He spelled it out in a letter to shareholders after the company first went public: “It’s all about the long term,” he wrote, rather than short-term profits or Wall Street reactions.

STACY MITCHELL, Co-director, Institute for Local Self-Reliance:

And he essentially says we are going to forgo profits in order to take market share; that our strategy is to lose money, which enables us then to put other companies out of business who can’t afford to lose money.

NARRATOR:

That strategy wouldn't sit well with critics like Stacy Mitchell, who advocates for small businesses.

STACY MITCHELL:

In essence, at the very beginning he’s signaling to shareholders, "I have a strategy to monopolize the market and that’s going to reward you, but it’s going to be far down the road, and will you come along with me?" And they said yes.

NARRATOR:

Investors also recognized Bezos’ essential advantage over physical stores, which had to charge their customers sales tax, unlike online businesses.

GREG LEROY, Executive director, Good Jobs First:

So not collecting sales tax gave Amazon a big leg up over bricks and mortar retailers, and that was central to their early strategy of gaining market share as quickly as they can.

STACY MITCHELL:

What booksellers were saying to me is that this is driving my customers to Amazon—they’ll come into the store, they’ll browse, they find what they want but then they’ll go buy it on Amazon because they can save that sales tax.

GREG LEROY:

So it was a very irksome early big issue from the book vendors, first of all—they were kind of the canaries in the mine, so to speak—and then lots of other retailers.

MALE NEWSREADER:

Amazon has added thousands of warehouse workers and 3 million square feet of space.

NARRATOR:

Amazon’s sales tax advantage would be central to its success as it expanded beyond books into other products.

JEFF BEZOS:

And we have a fantastic selection of things you can look at. Electronics and then, of course, toys. Yeah, thank you.

Here we've got the friendly Pokemon. This is more than 10 times the selection that you would find in a typical physical world software store.

NARRATOR:

But Bezos was still a long way from his goal of Amazon being the place where you could buy everything online. And he saw a way to achieve it.

FEMALE NEWSREADER:

Amazon could soon become the Walmart of the internet.

NARRATOR:

There were thousands of businesses eager to sell online. Bezos offered them a way to do it.

FEMALE NEWSREADER:

Amazon is transforming itself from an online bookstore to an online mall.

NARRATOR:

He transformed Amazon into a retail platform where anyone could sell their goods to his customers and invited thousands of other businesses to be a part of it.

JEFF BEZOS:

It's the easiest place for anybody, small or large, who wants to set up shop online to sell online, because they can access our 12 million-plus customers. Anybody, all comers.

JAMES THOMSON:

We’re talking about hundreds of thousands of companies with literally tens of millions of products.

NARRATOR:

Name brand stores started selling on Bezos’ platform, and so did tens of thousands of small entrepreneurs.

JASON BOYCE, Former seller on Amazon:

Everyone knew Amazon.com. The only people that knew SuperDuperHoops.com were the ones that were searching to buy a basketball hoop and saw our name on an advertisement. To us it was really a no-brainer. We knew that we would increase our sales. First year we did 100,000, next year we did a million, we did 2 million, 4 million—we were doubling every year in the early days.

NARRATOR:

It was great for the companies, and even greater for Jeff Bezos.

MALE NEWSREADER:

Amazon has become the most recognizable name in e-commerce.

NARRATOR:

Not only would he take a cut of everything other businesses sold, he’d also keep his own store on the platform, competing against everyone else in marketplace he owned and controlled.

JASON BOYCE:

He owns the main street. He has the main street real estate. Not just one building on the corner, the entire main street.

NARRATOR:

How Amazon would wield its power over the online marketplace would eventually become a question for government regulators, but early on there were indications.

The first to see them were book publishers.

JAMES MARCUS:

Amazon took over a large market share of the publishing industry very, very fast. They were very quickly in a position to demand concessions. I think it was a moment publishers started to realize, "Oh, wait a minute, they’re our partner, but they now have the beginnings of a boot on our windpipe."

NARRATOR:

Inside the company they had launched a strategy that some called “the Gazelle Project,” because they’d heard Bezos wanted them to pursue publishers the way a cheetah pursues a sickly gazelle.

RANDY MILLER:

Well, you don’t go after the strongest. He's like, "The cheetah. The cheetah looks for the weak, looks for the sick, looks for the small.” That’s what you go for. So don’t start with No. 1 publisher. Start with No. 7 publisher, and then No. 6 publisher, and then by the time you get to No. 3, 2 and 1, the noise has gotten back to them. They’re going to know this is coming, and chances are you may be able to settle that without a full-on war.

DENNIS JOHNSON, CEO, Melville House Books:

We were just this little mom and pop publishing company, publishing poetry books and translated fiction.

NARRATOR:

In the early 2000s the number of books Dennis Johnson was selling on Amazon had been rising steadily. Then one day he got a phone call.

DENNIS JOHNSON:

Our distributor called us up to talk about our Amazon contract. And he said, “I went out to dinner last night with Amazon. It was like going out to dinner with the Godfather. They want a kickback.” That’s the word he used: kickback. And he said they wanted 4% more of our sales.

JAMES JACOBY:

Was that unusual?

DENNIS JOHNSON:

It was—in our experience, it was totally unprecedented, yes.

NARRATOR:

Randy Miller ran the European book team and says he saw nothing wrong with Amazon’s tough tactics to challenge publishers on prices and profit margins.

RANDY MILLER:

In order to bring them into line, we would actually take them out of automated merchandising, take their prices up to list price. We would put references on the product page, their product page saying, "You want this cheaper? You want this book on this topic for a way cheaper price? Click here." And we’d send them to whoever we thought their worst competitor was. That was how Amazon forced their vendors to comply. But that's an old Walmart trick. It wasn’t like Amazon created that. And it made a difference. And Jeff kind of got excited about it.

NARRATOR:

When Dennis Johnson still refused to give in to Amazon’s terms, he says the buy button on all Melville House books suddenly disappeared, making it impossible for customers to purchase them on Amazon.

DENNIS JOHNSON:

I mean, this is the company that referred to little publishers like me as wounded gazelles, I believe? That’s how they think; that’s how he thought from the beginning. And we eventually had to pay what at the time I called a bribe. And our attitude toward Amazon was, you know, render unto Caesar that which is Caesar's and carry on as best you can.

JAMES JACOBY:

Jeff Bezos may say that Amazon comes along and has given publishers like yourself access to a huge distribution channel for your books. Has Amazon been good for your business?

DENNIS JOHNSON:

Well, absolutely they have. Any bookseller that sells our books is good for our business. So I’m not complaining that Amazon is selling our books. I’m just complaining of the way that their tactics are hurting the industry I love.

NARRATOR:

In addition to granting interviews, Amazon responded to written questions. Regarding Dennis Johnson’s characterizations, it told us, “Amazon disagrees with this account.”

JAMES JACOBY:

Were you uncomfortable with that sort of ruthlessness ever?

RANDY MILLER:

Well, no, because I was in retail. People think that’s ruthless. You know, I looked—and some people at Amazon, “Wow, that’s kind of mean,” and I’m like, “Oh, a retailer and a supplier having a disagreement? Stop the presses!" It happens all the time. I mean, you know, look—you’ve got finite margin, and somebody’s going to have to give. And a lot of times Amazon wasn’t the one giving.

JEFF BEZOS:

Kindle is a purpose-built reading device.

NARRATOR:

The tension between Amazon and book publishers would ramp up even further with the unveiling of the Kindle, which helped the industry transition to the digital age but gave Amazon more power to set prices lower.

JEFF BEZOS:

—and new releases are only $9.99.

NARRATOR:

Around that time, Barry Lynn, an advocate for broad antitrust enforcement, was growing increasingly concerned by what he was hearing from publishers.

BARRY LYNN, Executive director, Open Markets Institute:

If the door was open, the publisher would say, "Hey, you know, Amazon, they're just a terrific customer. They're our biggest customer. They buy the most books, they sell the most books. We love them."

And you close the door and they say, "Amazon is destroying our business model. They're destroying our business. They have way too much power. We must do something about them."

NARRATOR:

Lynn wanted publishers to speak up publicly and thought federal antitrust regulators might investigate whether Amazon was a monopoly, illegally abusing its market dominance in anti-competitive ways.

BARRY LYNN:

And they'd say, "No way, I'm not going to talk about Amazon in public. I'm not talking about them on Capitol Hill. They will take retribution against me."

JAMES JACOBY:

To which you responded?

BARRY LYNN:

“Well, that's why we have to do something about it!”

NARRATOR:

Jennifer Cast ran Amazon’s books division in its formative years.

JAMES JACOBY:

We've had a difficult time in some ways getting publishers to talk to us on camera about Amazon. In part, it seems, the reason is that they're afraid. How do you react to that, that publishers find it uncomfortable to talk about Amazon publicly?

JENNIFER CAST:

I don't know. I haven't seen that. I haven't been in your shoes. I'm sure they have—if you're saying that they don't talk negatively about us—I know they have a lot of good things to say about us. I don't know why they wouldn't speak their minds. We certainly value speaking our minds.

JAMES JACOBY:

There is this well-known anecdote about cheetahs and gazelles. This "gazelle" program. Do you know about that?

JENNIFER CAST:

I don't.

JAMES JACOBY:

We've talked to former Amazonians about it, where Jeff had said, "We should basically try to negotiate with book publishers and try to get better terms and treat the smaller publishers as a cheetah would go after a wounded gazelle."

JENNIFER CAST:

I didn't hear the cheetah and gazelle example, but what we were looking for was people that were willing to move away from the old model of bricks and mortars to a new model, which was a virtual store that had many different types of opportunities to present their books to customers.

JEFF BEZOS:

I want to talk a little bit about how we think about innovation at Amazon.com.

NARRATOR:

Amazon would begin to accumulate even more power in 2005, when Bezos quietly rolled out a revolutionary new program: Amazon Prime.

FEMALE NEWSREADER:

Now they have something called the Prime shipping program, where for roughly $79—

JEFF BEZOS:

Amazon Prime, we only launched this a week ago. You pay $79 a year and you get two-day shipping for free.

NARRATOR:

It was a risky bet, and it paid off.

SCOTT GALLOWAY, Professor, NYU Stern School of Business:

The linchpin, or the glue, if you will, and probably the seminal moment in Amazon’s business history, was the introduction of what has become the most successful membership program in history, and that’s Prime.

JEFF BEZOS:

Many of you in this audience will already be Amazon Prime members. Bless you. This is very much appreciated.

NARRATOR:

Eventually, more than 150 million people would sign up for the free shipping, a tremendous expense for Amazon. But to Bezos, it was worth it.

JAMES THOMSON:

The Prime program at Amazon is one of the most important drivers of Amazon’s growth. When you go on and look to buy a product and it’s available in two days, delivered to your door anywhere in the country, that Amazon Prime program becomes a mechanism that keeps bringing you back as a customer to keep buying and keep searching for new products on Amazon.

NARRATOR:

Two-day delivery anywhere in the country was a big promise for a company that, at the time, had less than 10 warehouses. So Bezos went on a building spree.

Across the country Amazon warehouses began to spring up, filled with millions of products being sold on Bezos’ platform. He’d call them "fulfillment centers," and they’d create hundreds of thousands of jobs in places hard hit by the Great Recession—

FEMALE NEWSREADER:

—10% of Pennsylvania residents unemployed—

MALE NEWSREADER:

The job market is in complete disarray.

NARRATOR:

—like Allentown, Pennsylvania.

SPENCER SOPER, Bloomberg News:

At that time it was tremendous news that an employer was coming and actually opening a facility and hiring people versus gutting half the staff.

NARRATOR:

Spencer Soper was a business reporter for the Allentown Morning Call when Amazon opened in the area in 2010. He began hearing stories about working in the warehouse.

SPENCER SOPER:

People are basically in this big, sprawling warehouse that’s stocked with goods in very random fashion, and they have scanners that tell them which things to get. And people are walking maybe 10-15 miles a day. People are just kind of crisscrossing this big warehouse all day long.

NARRATOR:

As workers told him about the punishing pace to meet the daily quota of packages, and the intense heat, Soper and his colleagues started to investigate further.

SPENCER SOPER:

People really felt like Amazon was playing fast and loose with their health.

NARRATOR:

Soper discovered there had been numerous complaints to authorities at the Occupational Safety and Health Administration, OSHA.

SPENCER SOPER:

They actually had a complaint from an emergency room doctor who called their hotline one day saying, "Listen, you might want to check out this Amazon place. I’ve had people parading through my emergency room to be treated for heat stress." There was a security guard who worked in the facility who sent a complaint to OSHA saying that he saw pregnant women suffering heat stress in the facility. And so there’s just like these red flags right and left.

NARRATOR:

After an investigation, OSHA said Amazon needed to keep the temperatures in the warehouses lower. In a statement at the time, the company said it installed new industrial air conditioning and pledged that worker safety was its No. 1 priority.

SPENCER SOPER:

Amazon is shrewd business people. Shrewd business people know when they have leverage, and when you’re the only shop hiring people in town you can push them a lot harder than you can when they’ve got alternatives.

NARRATOR:

Over the following years, Amazon would hire hundreds of thousands of workers and become one of the largest jobs creators in the country. At the fulfillment centers, Bezos experimented with new techniques and technologies to boost productivity.

JEFF BEZOS:

Willingness to experiment is the key to being able to do new things. So we do hundreds of experiments every day in our fulfillment centers to get a little bit better. Kind of like incremental invention.

NARRATOR:

When a company called Kiva perfected a warehouse robot, Amazon bought the whole company.

FEMALE NEWSREADER:

Amazon has acquired Kiva Systems. They make shipping robots.

NARRATOR:

It helped transform the work environment in Amazon’s warehouses.

JEFF WILKE, CEO of Global Consumer, Amazon:

When I first showed up at Amazon in 1999 I led our global operations team.

NARRATOR:

Jeff Wilke created the Amazon fulfillment center system and is one of two CEOs under Jeff Bezos.

JEFF WILKE:

As we’ve added 200,000 robots, in that same time frame since 2012 we’ve added 300,000 people in our fulfillment centers. So what happens is the robots change the work so they allow us—people don’t have to walk as far, which is a complaint that we’ve heard in the past. They make the job safer. They make them higher quality because we present a smaller set of options to employees and that’s all good for customers. And it’s good for employees, too.

NARRATOR:

But at the same time, complaints have persisted.

SHEHERYAR KAOOSJI, Executive director, Warehouse Worker Resource Center:

People who have worked in warehouses for decades say this is different. This is not the same.

We're here today because we want to make sure that these workers know about their rights in the workplace, especially around heat.

NARRATOR:

Sheheryar Kaoosji is an advocate for warehouse workers in the San Bernardino, California, area—an Amazon hub, with 10 fulfillment centers and over 15,000 employees.

SHEHERYAR KAOOSJI:

Because of the way that Amazon operates, because of the way that they set their rates for productivity, it’s a lot harder work physically but also psychologically.

NARRATOR:

We sat down with a group in San Bernardino who’d recently worked at Amazon.

MALE FORMER EMPLOYEE 1:

When they first got here I thought it was exciting. Like for me, I was thinking maybe I could find a place where I’m going set roots, of a good job, move up in the place, but after being there for a while, I was like, there’s no way.

MALE FORMER EMPLOYEE 2:

It's like, OK, this is where I can probably make a career. But once you worked there for a certain amount of time, it’s just not realistic how they expect you to work.

NARRATOR:

Like dozens of workers we’ve spoken to around the country, they say they struggled to keep up with the rate Amazon expected them to pick and pack items.

JAMES JACOBY:

How realistic are the rates that they're giving you? I mean, what’s—

MALE FORMER EMPLOYEE 3:

Not realistic at all. Unrealistic.

JAMES JACOBY:

Not realistic?

MALE FORMER EMPLOYEE 1:

There’s absolutely no way to make rate. You gotta find little ways to cheat it, because once you hit rate, by the end of the week, they raise it—they bump it up again. Because they start seeing, hey, people could hit those rates, could hit those numbers, hey, let’s push ‘em a little harder.

Every week it seemed like it was going up.

MALE FORMER EMPLOYEE 2:

You have security cameras right behind you at all times that are looking at you 24/7, and if you don't meet standards or the rates, you're out the door. You're just disposable.

SHEHERYAR KAOOSJI:

Every worker has a scanner at all times that basically track exactly where you’re at.

MALE FORMER EMPLOYEE 4:

And they have a little blue line at the bottom of the screen, and it has how many seconds that you have to have it done by the time it hits zero, and it puts you into panic mode.

MALE FORMER EMPLOYEE 5:

And pretty much you can’t talk to people. You can't be in the same aisle as them. You just constantly have to sit there scanning like a robot, all day long. If they catch you not scanning, you get a write-up.

SHEHERYAR KAOOSJI:

And what they’re doing is they’re producing this mass of data that they are using to be able to analyze the entire workforce.

MALE FORMER EMPLOYEE 4:

We’re not treated as human beings. We’re not even treated as robots. We’re treated as part of the data stream.

JAMES JACOBY:

It’s the incentive at any warehouse, on any assembly line, to get the most out of any worker.

SHEHERYAR KAOOSJI:

Yes.

JAMES JACOBY:

To make rates, to be as efficient as possible, to be as productive as possible. So I don’t see exactly what’s different about Amazon as opposed to any other warehouse.

SHEHERYAR KAOOSJI:

Amazon is the cutting edge. Other warehouses are starting to adopt these technologies; other companies are definitely interested in doing what Amazon is doing. Data collection could become basically the standard for all workers, and that you're never good enough. You're never able to keep up.

NARRATOR:

Amazon told us work rates are not based an individual employee’s performance, and that the scanning devices workers use are not for tracking people, but inventory, a common practice in the warehouse industry.

JAMES JACOBY:

We’ve talked to workers around the country, both current and former workers. They’ve described the pace of work as being really grueling. In the early thinking about rates and how far you could push human beings in terms of their productivity, what was the thinking about that?

JEFF WILKE:

Well, obviously if the rates are too high you’re not going to have people showing up for work. So we have 600,000 people at the company. Most of them are in the fulfillment centers and they come to work every day; they stay for years. These are considered great jobs in the hundreds of communities where we have fulfillment centers all over the world and in the U.S. We have—almost every state has an operation in it, and people come to work because these are great jobs. They’re safe; we pay double the minimum wage, the national minimum wage. We have terrific benefits—the benefits for the folks that work on the floor are the same benefits that my family has access to. Our family leave is like 20 weeks. So the rates are set so that we can accomplish what we need to, which is get orders to customers in a reasonable time and in a high-quality way, and that creates a workplace that people want to come back to, and they do.

NARRATOR:

Amazon wouldn’t tell us how long fulfillment center workers stay on the job or how often they’re injured. But workers we spoke to say the rates are higher than other warehouses, and that the company rebuffs attempts to unionize.

AMAZON TRAINING VIDEO:

We do not believe unions are in the best interest of our customers, our shareholders or most importantly, our associates.

NARRATOR:

This is a clip from a video the company says it used in the past to teach managers about employees' rights and labor laws.

AMAZON TRAINING VIDEO:

The most obvious signs would include use of words associated with unions or union-led movements, like “living wage” or “steward.”

JAMES JACOBY:

Early on Amazon took a position to basically be anti-union. Why was that decision made?

JEFF WILKE:

I don’t think we made the decision to be anti-union. We just feel that all of the things that unions would want to get us to do, we’ve already done.

JAMES JACOBY:

What about setting rate, though? Do you not see that there’s a little bit more leverage in the hands of management in this scenario than there would be in a unionized environment?

JEFF WILKE:

I don’t know, it’s hard to speculate on that. But I do think that we have the obligation to set rates that are, again, going to encourage people to seek these jobs and deliver for customers what we’ve promised.

JAMES JACOBY:

What would you say to someone, though, who’s worked in your fulfillment centers that feels as though there’s been—that humans are increasingly being treated like robots? Because it’s something that we’ve actually heard, and I don’t sense it’s hyperbole.

JEFF WILKE:

Well, that’s not the experience that I had in setting it up or that I’ve seen. It’s certainly true that these jobs are not for everybody, and there may be people that don’t want to do this kind of work.

NARRATOR:

Amazon executives also stress the company has become an industry leader in training its workforce for career advancement.

JEFF WILKE:

We just announced a pledge recently to spend $700 million to upskill, which is basically creating career opportunities for people—100,000 of our employees. We pay 95% of tuition to go to college to get a skill that isn’t about Amazon, that’s about creating options for the employees. And I would expect those people to take advantage of that, work for us for a couple of years and then go do something that they would much rather do, and that’s OK.

JAMES JACOBY:

There will be people that will hear what y’all are saying and they’ll say, "Well, you signed up for physical labor, a job is a job, there were benefits and they're now investing $700 million to do retraining for other types of jobs. What’s the real grievance? What is there to complain about?"

MALE FORMER EMPLOYEE 6:

I actually used to think that way for a while whenever I—when I first started—whoever I heard complaints from. I was like "Well, it was in the job description, and you signed up for it." The part they don't talk about is the safety rules that you have to ignore to make rate. It’s not just you go in, OK, you do your job and that’s it.

JAMES JACOBY:

So you're in a weird bind.

MALE FORMER EMPLOYEE 6:

It’s incredibly hard to meet rate while following all the safety procedures.

JAMES JACOBY:

A complaint that we’ve heard from workers in terms of the sort of automation of their work as humans, some of them telling us that yes, there are high safety standards in these fulfillment centers, but that in order to make rate they’re having to cheat the standard a little bit.

JEFF WILKE:

Well, I would say that’s not OK. So I—from the moment that I arrived 20 years ago, I made it very clear to our operations teams that we will not compromise the safety of our employees to do anything else. So we have a culture that if we are asking people to do something that they have to do too fast to be safe, they can raise their hand and say, "This isn’t right," and we’ll fix it.

NARRATOR:

For years, Amazon has put a happy face on its business and its workforce.

SPENCER SOPER:

Even in Amazon’s commercials, the people are almost like shadows and silhouettes. It’s all about boxes, just like happy boxes singing and bumbling their way to your door. They don’t want you to even think about how they do this. They just want you to be wowed and, “Oh! How'd this get here?” They wanted people to just think, “Whoa, magic!”

NARRATOR:

And magic was a big part of Bezos’ marketing strategy, with an emphasis on the company’s miraculous level of innovation and growth.

JEFF BEZOS:

We started Amazon Prime in 2005. But then, something very extraordinary happened—this. In 2011, the slope of that graph changed, a lot.

NARRATOR:

As Amazon grew, he wanted his top executives to think about the kind of company it was becoming. He wrote a memo titled "Amazon.love."

A copy of it was obtained by Brad Stone.

BRAD STONE:

The memo is another example of Jeff being very prescient about the future. It's Jeff grappling with the idea that not all big companies are loved; that there is something that we get uncomfortable with when we talk about very big companies.

“Rudeness is not cool. Defeating tiny guys is not cool. Risk taking is cool. Winning is cool. Polite is cool. Defeating bigger, unsympathetic guys is cool. Inventing is cool. Explorers are cool. Conquerors are not cool.”

JEFF BEZOS:

Some businesses, you can tell when you go in and have meetings with them, they have a conqueror mentality. And there's a big difference between a being a conqueror and being an explorer. And I think in this very inventive space that we're in, it pays to explore.

NARRATOR:

But to some watching Amazon’s growth, the company was falling short of that ideal and taking steps to make sure nothing got in its way,

In 2013, Amazon was moving to create its own delivery system and made a key decision: Rather than hire its own drivers, it built a network of independent businesses to deliver packages.

PATRICIA CALLAHAN, ProPublica:

They weren't just going to dabble here and dabble there. They were going to go and create a system that would rival Fed Ex or UPS.

NARRATOR:

ProPublica reporter Patricia Callahan, in conjunction with BuzzFeed, has investigated the system Amazon set up.

PATRICIA CALLAHAN:

They figured out a way to get around regulation. The cargo vans they choose are big enough to stuff with hundreds of Amazon packages, but they're small enough that they're not regulated by the federal government.

MALE NEWSREADER:

An 84-year-old woman struck and killed by an Amazon delivery truck.

MALE NEWSREADER:

A woman hit and killed in a parking lot.

NARRATOR:

ProPublica and BuzzFeed found that drivers are under intense pressure to deliver packages.

MALE NEWSREADER:

After striking him, the van maneuvered around Salinas and his dog.

NARRATOR:

And they documented more than 60 crashes, including 13 deaths, since 2015.

FEMALE NEWSREADER:

An infant critically injured in a car crash has died.

PATRICIA CALLAHAN:

When it came time to figure out who's responsible, Amazon would always say, "It's the contractor, it's not our responsibility."

JAMES JACOBY:

Now you've been able to find 13 deaths, and that's over the course of several years. Is that statistically significant, given all of the packages that they deliver in any day or any given year?

PATRICIA CALLAHAN:

So I don't pretend to claim that there's only 13 deaths and that I found every single one. I just found enough to show that this is happening around the country. With UPS, there's a record. There's a federal record you can look at how many serious injury and fatal accidents they have. With Amazon, that doesn't exist. No one knows the safety records of all of Amazon's contractors.

NARRATOR:

Amazon disputed the ProPublica report. It would not release any data on crashes involving its driver network but told us it had a “better than average” safety record and that nothing is more important to them than safety.

JEFF WILKE:

Any accident is one accident too many, so just as we were focused on safety in the fulfillment centers and product safety, we set very high standards with all of those partners for safe performance. We have training videos for the third parties that work with us to help them understand what we expect in terms of the drive. We have mapping software that we use to help them find the right routes. Every one of our drivers is required, including the third parties, are required to have comprehensive insurance, including liability insurance, so that if there is an accident, that the person who’s injured is covered.

MALE NEWSREADER:

Amazon wants to get Prime members their packages even faster—

NARRATOR:

In the last year, Amazon announced a change to the way it handles Prime deliveries. Instead of delivering packages in two days, they promise to do it in one.

FEMALE NEWSREADER:

Free next-day delivery all across the U.S.

JEFF BEZOS:

It's impossible for me to imagine a world 20 years from now where a customer comes up to me and says, "Jeff, I love Amazon. I just wish your prices were a little higher." Or, "I love Amazon. I just wish you delivered a little more slowly."

NARRATOR:

At the same time the delivery network was being set up, Amazon was also rapidly expanding its product offerings, inviting more sellers onto the site, including those from China.

RACHEL JOHNSON GREER, Former product safety manager, Amazon:

It basically makes it to where it’s super easy for these companies who are maybe not as careful with adhering to the law, where they’re able to just start a business up on Amazon, import some stuff, sell it, cause some problems and then disappear.

NARRATOR:

Rachel Greer worked in product safety at Amazon and worried that the site was being flooded with untested and potentially unsafe products.

RACHEL JOHNSON GREER:

Are there proper warnings? Has it been safety tested for durability? If the child chews on it, will the paint come off? Is that paint leaded?

JAMES JACOBY:

Most people would assume that there’s a pretty high safety standard on Amazon.

RACHEL JOHNSON GREER:

And that assumption would be incorrect.

NARRATOR:

She says that's because Amazon, like other tech companies, takes the position that it's not legally responsible if its customers are harmed by products sold by third parties on the site.

JAMES JACOBY:

If someone buys something that causes harm at Walmart or at Target, a consumer can sue Walmart or Target.

RACHEL JOHNSON GREER:

Right, because no one is forcing you when you come into Walmart, to enter the doors of Walmart, they aren't making you sign away your rights.

JAMES JACOBY:

But when do you sign that when you go on Amazon.com?

RACHEL JOHNSON GREER:

When you make your account. When you accept the terms and conditions.

NARRATOR:

People have been challenging Amazon's terms and conditions in court. Some have even been successful.

JAMES JACOBY:

Ultimately who's on the hook when a customer buys a dangerous product on Amazon? Who takes ultimate responsibility for that?

JEFF WILKE:

Well, in the rare case when something like that happens, if it's a third-party seller, the sale is by a third-party seller, and it is the seller's responsibility to sell a legitimate product to our customer. And then when Amazon is the retailer, and we sell a product to a customer, then it's our obligation to make sure that we understand the manufacturer and the supply chain for that product and its safety.

JAMES JACOBY:

But when the other sellers are selling in your store, you're not responsible for it, ultimately, if they're selling your customer a defective or dangerous product?

JEFF WILKE:

I think the way things work in the U.S. is that the seller of record is the person who is setting the price and who is purchasing the product. And for things not sold by Amazon, and it says on the detail page, it will tell you who the seller is, it's the seller's responsibility for those things. And for us, it's very clear, it says "Amazon.com" whenever we sell it.

JAMES JACOBY:

Do you audit your sellers, in terms of whether they're actually providing safe products to your customers?

JEFF WILKE:

We do. Some of our sales, so about almost 60% of our sales are by third parties, and those sales, some of them come directly from the third parties, so we're not involved at all.

JAMES JACOBY:

But you take a cut. It's on your infrastructure, it goes through Amazon.com, so I mean—

JEFF WILKE:

Well, it's on our infrastructure in terms of the website and payments, but we're not, we're—

JAMES JACOBY:

And fees that—you're taking a cut of the sale, right?

JEFF WILKE:

Sure, sure. And we're providing traffic that—that's kind of the way they think about marketing is why they would pay that fee. But it's harder to, before an experience, inspect that product.

MALE NEWSREADER:

A South Carolina woman who bought a hair dryer on Amazon said this happened.

FEMALE SPEAKER:

Fire is coming out of the hair dryer.

NARRATOR:

Amazon's approach has had consequences.

FEMALE NEWSREADER:

A hoverboard caused a fire that destroyed their home.

NARRATOR:

Dangerous products were flagged by authorities in Washington state.

FEMALE NEWSREADER:

—found dozens of school supplies that had high levels of toxic metals.

NARRATOR:

And a recent report found thousands of banned, unsafe or mislabeled products.

JAMES JACOBY:

I’m having a hard time understanding something, which is that Amazon’s entire brand is about the customer, right?

RACHEL JOHNSON GREER:

Yes.

JAMES JACOBY:

That it’s—

RACHEL JOHNSON GREER:

Oh, I reminded them of this over and over again.

JAMES JACOBY:

You reminded them of what?

RACHEL JOHNSON GREER:

I said that no customer wants to buy an unsafe product. No customer wants selection that harms their child. No customer wants to buy something that burns down their house because it looks cool and it's the latest, coolest thing.

JAMES JACOBY:

Sitting here today are you able to basically say that the products that you sell on Amazon.com are safe?

JEFF WILKE:

What I can say is we work really hard to make sure that they’re safe. We’ve spent $400 million in the last year on systems that seek out things that are not safe, and there are millions of sellers and hundreds of millions of products, and our job is to as fast as we can weed out the ones that don’t belong on our site.

We're going to have to be vigilant as a retailer and as a technology company, and we are definitely dedicated to protecting the safety of our customers.

NARRATOR:

We heard that concern for the customer over and over in our interviews with Amazon executives.

DAVE LIMP, Senior vice president, Devices & Services, Amazon:

Customer trust in a company like Amazon, it’s just sort of foundational.

JAY CARNEY, Senior vice president, Global Affairs, Amazon:

Customer obsession is the first leadership principle, and it’s not a corporate slogan.

JEFF WILKE:

We try to stay really focused on customers.

JENNIFER CAST:

Very focused on delivering results for our customers.

ANDY JASSY, CEO, Amazon Web Services:

Providing a great customer experience that customers want.

ARDINE WILLIAMS:

Delivering that customer delight.

NARRATOR:

This commitment to the customer and to keeping prices low had another benefit: It helped them avoid running afoul of regulators who enforce the nation’s antitrust laws.

BARRY LYNN:

It's important to understand that there's two fundamental philosophies of antitrust, of anti-monopoly law. There's the traditional philosophy in which you want to break up all potential concentrations of power that you can. But for the last 30 years, there's been this change in how we do antitrust. And this is the idea that the only purpose of antitrust should be to drive prices lower to serve the interest of the consumer.

NARRATOR:

Lynn had been urging regulators to take a more traditional approach and examine whether the company was gaining market power in exploitative ways, stifling fair competition but keeping prices low for consumers.

JAMES JACOBY:

We live in a society of consumers, though, and seemingly there is some net benefit to all of us when prices are low. So, what's wrong with that view of things?

BARRY LYNN:

It's obviously good for people to—for all people if we can drive down prices. If we have lower price drugs, if we have books that anybody could buy, that's a good thing. It's a good thing for society, and it's a good thing for us as consumers.

But we're not only consumers. We're also citizens. We're also producers. We're also people who think and who make things and who grow things, and we want to have access to open markets.

NARRATOR:

Once again, the tension was most pronounced with book publishers. Amazon was selling around 40% of all new books in America—and two-thirds of all electronic books—thanks to the success of the Kindle.

Then, one of the world’s largest publishers, Hachette, decided to push back. Franklin Foer was one of its authors.

FRANKLIN FOER, Author, "World Without Mind":

Hachette and Amazon set out to renegotiate their e-book contract. And Hachette said, "No, we don’t accept the terms of your contract." And Amazon basically said, “To hell with you, Hachette. We’re going to stop delivering your books. If somebody searches for a Hachette title, we’re going to redirect them to another publisher.”

MALE NEWSREADER:

Amazon’s battle with Hachette and the authors that Hachette publishes is heating up.

NARRATOR:

As Bezos’ virtual blockade dragged on for months—

JUDY WOODRUFF:

A bitter seven-month standoff—

NARRATOR:

—thousands of authors, including bestsellers like Douglas Preston, were caught in the middle.

DOUGLAS PRESTON, Author:

Some authors were losing 50% to 90% of their sales from Amazon. It was absolutely devastating to first-time authors. It actually destroyed their careers.

JAMES JACOBY:

Did you see your sales plummet?

DOUGLAS PRESTON:

I did. Yes, I saw my sales plummet tremendously.

NARRATOR:

In frustration, Preston penned an open letter on behalf of all authors. It was published in The New York Times with more than 900 signatures.

DOUGLAS PRESTON:

We authors have loved Amazon. We have enthusiastically supported it, and this is how they treat us? This is not right.

FEMALE NEWSREADER:

Amazon has been accused of doing everything from raising prices to deliberately delaying shipments.

MALE NEWSREADER:

Is this what happens when Jeff Bezos decides to flex his muscles?

NARRATOR:

While Hachette and Amazon were at an impasse, Douglas Preston, Franklin Foer and other authors went to Washington and asked the Obama administration to open an investigation.

FRANKLIN FOER:

I went to the Justice Department and I went to the Federal Trade Commission with the Authors Guild and we tried to explain to them why this power was so dangerous. We pointed out all the ways in which Amazon was bullying the publishing industry.

DOUGLAS PRESTON:

The Department of Justice listened to us, and their answer was essentially this: "Amazon is one of the most popular companies in the country. They have brought tremendous services to consumers and they've brought lower prices.” And that we hadn’t given them any kind of reason to open an antitrust investigation.

NARRATOR:

Eventually, Hachette and Amazon would settle their dispute, with Amazon allowing Hachette to set its own prices for e-books but offering it incentives to keep them low.

PRESIDENT BARACK OBAMA:

It’s great to be here at Amazon.

NARRATOR:

Amazon would thrive during the Obama years and eventually account for nearly 40% of all online commerce in the country.

PRESIDENT BARACK OBAMA:

Last year during the busiest day of the Christmas rush, customers around the world ordered more than 300 items from Amazon every second.

NARRATOR:

But the complaints about its tactics would continue, with retailers of all kinds concerned that Amazon had become the online shopping gatekeeper.

JASON BOYCE:

You’ve got to be on Amazon. You have to be there because that’s where everyone is. A hundred million Prime subscribers. They are the de facto e-commerce channel in the United States. Period. End of list.

JAMES JACOBY:

Amazon executives have told us that there are many other options out there. There is Walmart, there's Alibaba. As a seller, you’ve got options.

JASON BOYCE:

I’ve heard that response from Amazon executives before, and we did that. We listed all of our products on every other online marketplace, but it’s a testament to just how good Amazon is. All of the others that were not Amazon combined did about 10% of what we were doing on Amazon.

NARRATOR:

Businesses big and small have been accumulating complaints about Amazon’s hold on them.

JAMES THOMPSON:

On Amazon, the customer belongs to Amazon. It doesn’t belong to the third-party seller; you are basically renting the Amazon customer.

NARRATOR:

James Thomson used to recruit brands to come onto Amazon and now advises them on how to do business with the company.

JAMES THOMPSON:

I represent brands today that face a number of challenges with Amazon.

NARRATOR:

Among those challenges: Businesses say that Amazon has access to their valuable data, which gives it an unfair advantage.

They also complain about increasingly higher fees to stay on the platform and pressure to use Amazon’s warehouses and shipping services.

We spoke to numerous name brand companies, but none would share its grievances on camera.

MALE AMAZON SELLER 1:

My account was suspended.

NARRATOR:

Some small business people have been talking about their experiences, good and bad, online.

MALE AMAZON SELLER 2:

When you're selling on Amazon you’re playing in someone else’s playground.

STACY MITCHELL:

Who gets placed where, whether or not your product shows up in the search results.

FEMALE AMAZON SELLER:

They suspended my account without warning—

STACY MITCHELL:

These are all things that are governed by Amazon’s rules. And if there’s a dispute within that arena, if you feel you are mistreated, the judge and jury is Amazon.

MALE AMAZON SELLER 3:

They don’t care, they’ll just kill your account like that, or suspend it.

PAUL RAFELSON, Executive director, Online Merchants Guild:

There are all sorts of crazy stories about why people get their accounts shut down on Amazon. And it could take a week, it could take months, it could be never before you're back online again. Amazon has the upper hand and the ability to basically take your business away from you at any given moment.

AMAZON AD:

Selling on Amazon, take one.

NARRATOR:

Amazon said third-party sellers account for more than half of everything sold on the site—

MALE AMAZON SELLER 4:

I sell mini longboard skateboards.

MALE AMAZON SELLER 5:

I sell mineral water. This is what I do.

NARRATOR:

—and it's committed to its sellers’ success, proactively contacting them when their accounts are at risk of suspension and offering an appeals process to resolve disputes.

AMAZON TRAINING VIDEO:

You already have great products. Scale up and—

NARRATOR:

But in the eyes of some businesses, Amazon has essentially become like the railroads at the turn of the last century that controlled the flow of commerce across the country.

AMAZON TRAINING VIDEO:

Start selling today.

JAMES JACOBY:

Do you see yourself as being kind of like the rails for e-commerce, that sellers bring their goods to market ON your rails, through your marketplace?

JEFF WILKE:

I don’t think of it that way and here’s why: The vast majority of stuff that's sold—well, all of the stuff that’s sold is manufactured, right? So it’s manufactured, meaning there are brands AND factories that produce stuff and then sell it. We’re 1% of the retail sales in the world, about.

JAMES JACOBY:

Well, you are the biggest marketplace online right?

JEFF WILKE:

No. So again, I don’t—the idea that there’s an online distinct for brands to sell their stuff in, distinct from physical, just doesn’t make sense to me, and we’re far from the largest retailer. So I describe this as retail, and we’re competing against Walmart and Target and Costco and Carrefour and Alibaba and Tmall and all kinds of folks who are now selling both physical stores and online.

NARRATOR:

In addition to pointing to other large retailers, inside the company, employees have been schooled in how to talk about its size and power.

JAMES THOMSON:

When I worked at Amazon we had training specifically on the use of terms like "monopoly." We were not allowed to use a term like "market share." Amazon has what’s known as "market segment share." What is "market segment"? What is "market segment share"? I don’t know, but I know the lawyers at Amazon feel that those terms are much safer than using terms like "market share."

JAMES JACOBY:

So market share was something they were really concerned about.

JAMES THOMSON:

Clearly somebody with the necessary legal training or PR training recognized that Amazon was growing very quickly, and when we were asked to use the term "market segment" and "market segment share," in essence it’s a polite way of saying, "I’m not gonna talk to you about how big we are."

NARRATOR:

Since leaving Amazon 20 years ago, Shel Kaphan has been watching the company with increasing concern, and he’s speaking out about it for the first time.

SHEL KAPHAN:

I think that the characterization of Amazon as being a ruthless competitor is true, and under the flag of customer obsession they can do a lot of things, which might not be good for people who aren't their customers.

JAMES JACOBY:

I know you're not a legal scholar, but are you basically concerned that Amazon is a monopoly?

SHEL KAPHAN:

I'm concerned that it has that type of power. I think whether you technically can call it a monopoly or not, I don't know.

NARRATOR:

That question has continued to loom over Amazon.

STACY MITCHELL:

I think that Amazon is looking out, and the existential threat that they may face is going to be from government. It’s whether or not policymakers are going to step in and intervene and say, "You have too much power."

NARRATOR:

For years, Bezos has been ramping up Amazon's profile in Washington.

FEMALE NEWSREADER:

Amazon has been lobbying the FAA to lift—

MALE NEWSREADER:

—trying to cozy up to politicians so that they will give him the biggest tax breaks around.

NARRATOR:

Spending millions a year on lobbying.

FEMALE NEWSREADER:

Amazon lobbied more government entities than any other tech company.

NARRATOR:

And hiring as its spokesman the former White House press secretary Jay Carney.

JAMES JACOBY:

You’ve got an army of lobbyists, many of whom have revolved in and out of government, including yourself. What are you hoping to get for all that lobbying spend and all that influence?

JAY CARNEY:

One of the things we discovered is because of the visibility of our company, but also the range of businesses that we’re in, we need subject-matter experts on food safety, on transportation, on drones, on privacy. And also, we can be a resource, an information provider to policymakers and regulators. It’s not lobbying in the traditional sense in terms of trying to persuade somebody to so something. It's just answering questions and providing data and information.

NARRATOR:

Bezos himself would also become a presence in the capital and eventually buy the largest private residence in town.

FRANKLIN FOER:

Jeff Bezos never really showed much interest in politics, but as he’s cemented himself in the city, he started to acquire this physical presence. He bought a mansion and developed it into a place that’s explicitly designed to be social.

STACY MITCHELL:

It has a big ballroom. I mean, it is designed to create a real presence for him in the nation’s capital, where he can hobnob with the people who make decisions.

NARRATOR:

He’d even bought the hometown newspaper—

MALE NEWSREADER:

Jeff Bezos sent a thunderbolt through the media world this week—

NARRATOR:

—spending a quarter of a billion dollars to rescue the struggling Washington Post.

JEFF BEZOS:

And I do believe that democracy dies in darkness. I think that the capital city of the United States of America needs a paper like The Washington Post.

FRANKLIN FOER:

I gotta say, full credit to him, he hasn’t intervened in any of the coverage of the paper. And he’s invested in the paper. Every dollar of profit that the paper makes is plowed back into making it a better paper.

BRAD STONE:

Bezos allowed the Post to hire, to restock its newsroom. He reversed what had been an atmosphere of sort of decline. I'd say The Washington Post has really flourished under Bezos' ownership.

JEFF BEZOS:

Let’s cut this digital ribbon.

NARRATOR:

At the time, critics saw a more cynical motive.

MALE NEWSREADER:

Perhaps he’s buying The Washington Post to buy some sort of protection.

MALE NEWSREADER:

Precisely. This deal could give him more influence over politics.

FRANKLIN FOER:

Nobody hangs out in Washington, D.C., just to go to the free museums. You buy a home in Washington, you buy a newspaper in Washington, because it is the most influential city in the world and you want to lay your hands on that power.

NARRATOR:

Bezos saw a business opportunity there as well. The Obama administration planned to modernize the federal government by embracing cloud computing. Bezos had been quietly building a revolutionary cloud computing business. He called it Amazon Web Services.

BRAD STONE:

It's basically computing power in the cloud, but really it's Amazon’s server farms around the world that give people access to the kind of technology services they need.

NARRATOR:

To keep Amazon running, Bezos had developed an unprecedented digital infrastructure. He realized he could rent parts of it out, not just to businesses, but also to the government.

AMAZON PROMOTIONAL VIDEO:

Our infrastructure is built to satisfy the security standards of the most risk-sensitive organizations.

JAMES BANDLER, ProPublica:

He's already got a huge edge over the other big competitors in it. So he wants to take that lead and capture the U.S. government.

NARRATOR:

In 2013, he got a major boost when it was revealed that Amazon Web Services had designed a computing cloud for the CIA.

MALE NEWSREADER:

Amazon Web Services was awarded a 10-year contract for $600 million.

MALE NEWSREADER:

Amazon is helping the CIA build a secure cloud computer network.

JAMES BANDLER:

The CIA contract was probably one of the best things that happened to Amazon's cloud business. It lifted all doubts about the security of the cloud and about whether you could trust Amazon with your most precious data.

BRAD STONE:

The message to the world is, if the CIA trusts Amazon with its data, then maybe other companies and government institutions can as well.

NARRATOR:

And they did.

EXPEDIA AD:

Experience it with Expedia.

NARRATOR:

AWS became by far the world’s leading cloud computing platform.

CBS AD:

—on CBS.

NARRATOR:

Today more than a million businesses, as well as PBS, pay Amazon to store and manage their data.

Bezos had again anticipated the next frontier in technology and had made himself indispensable to it.

STACY MITCHELL:

What Jeff Bezos is after is really creating a company that is the infrastructure, that owns the infrastructure for how commerce is done. And that’s an incredibly powerful place to be.

MALE CONFERENCE ANNOUNCER:

Please welcome chief executive officer of Amazon Web Services, Andy Jassy.

NARRATOR:

Andy Jassy created and runs AWS. He credits the service with making it easier to do business and sparking innovation throughout the economy.

ANDY JASSY:

Look at what AWS has enabled with regard to change in our society. Look at—Netflix changed the way that we consume digital content, and Airbnb changed the way that we get accommodations, and Hola and Grab and Lyft and Uber changed the way that we get transportation. AWS has enabled—has been a part of enabling all these huge innovations and changes in consumer experiences that have made life better for people.

AWS AD:

And we're the cloud with the most capabilities, the most innovation, the most customers.

NARRATOR:

The division generated $35 billion in sales last year.

AWS AD:

Amazon Web Services. Build on.

NARRATOR:

The success of AWS gave Bezos billions to expand Amazon from a company that sells everything to a company that does everything.

A top priority—

WILLIAM SHATNER:

To boldly go where no man has gone before!

NARRATOR:

—was to create the sci-fi future he’d fallen in love with as a child.

WILLIAM SHATNER:

Gentlemen, this computer has an auditory sensor. It can, in effect, hear sounds.

NARRATOR:

A world of artificial intelligence, in which computers can think and make decisions for humans and about humans.

FRANKLIN FOER:

Jeff Bezos is a big fan of "Star Trek." He admits that that was on his brain when he came up with the idea that Amazon should be pursuing a little disk that you can bark commands into.

WILLIAM SHATNER:

Stop.

FRANKLIN FOER:

This is his "beam me up, Scotty" fantasy realized.

JEFF BEZOS:

We started working on this device. And our vision was, in the long term, it would become the "Star Trek" computer.

AMAZON ECHO AD:

When it first arrived from Amazon, I didn’t know what it was.

NARRATOR:

In 2014, Bezos’ talking computer, the Amazon Echo, hit the market.

AMAZON ECHO AD:

Is it for me?

It’s for everyone.

NARRATOR:

The voice known as Alexa would embed Amazon deeper into the lives of millions of people.

AMAZON ECHO AD:

Alexa, what do you do?

ALEXA:

I can play music, answer questions, get the news and weather.

FRANKLIN FOER:

They call it a personal assistant, and just that term implies this intimate connection that we then begin to develop with Amazon.

ALEXA USER:

Alexa, sing the ABC song.

ALEXA:

[Singing] A B C D E F G—

AMY WEBB:

I believe that when we think about the future and the future with artificial intelligence given where we currently are today, Alexa in some ways represents the moment that it becomes seamlessly interwoven with our lives.

AMAZON ECHO AD:

Alexa, how many teaspoons are in a tablespoon?

ALEXA:

One tablespoon equals three teaspoons.

AMAZON ECHO AD:

Oh, OK.

AMY WEBB:

And the problem is that we forget that it’s there.

MALE ALEXA USER:

Alexa, lights on.

ALEXA:

NARRATOR:

But Alexa is also listening. And she’s learning.

ALEXA:

I’m answering questions and learning more.

NARRATOR:

And that helps Amazon in the race to dominate artificial intelligence.

BRAD STONE:

Every time you ask Alexa something, you're making the Alexa algorithm better. It's one of the reasons why Amazon, having had a head start, is able to kind of preserve that head start, because they've got the most data of anyone.

MEREDITH WHITTAKER, Co-director, AI Now Institute, NYU:

Alexa is one more way for Amazon to gather extremely valuable data. And this data collection is extremely important to this business model. It’s extremely hard to do, and convincing people to just deploy something like this in their home is a brilliant trick.

NARRATOR:

Dave Limp is Amazon’s head of devices.

JAMES JACOBY:

How is it that you convinced tens of millions of people to put what is essentially a listening device in their homes?

DAVE LIMP:

Well, I would first disagree with the premise. It doesn't—it's not a listening device. The device in its core is—it has a detector on it—we call it internally a "wake-word engine"—and that detector is listening—not really listening, it's detecting one thing and one thing only, which is the word you've said that you want to get the attention of that Echo.

NARRATOR:

Once the device is awake and the blue light is on, it’s recording. And last year, it was revealed that Amazon employs thousands of people around the world to listen and transcribe some of those recordings to help train the system.

JAMES JACOBY:

Do you think that you did a good enough job of disclosing that to consumers? That there are humans involved in listening to these recordings?

DAVE LIMP:

We try to articulate what we're doing with our products as clearly as we can. But if I could go back in time and I could be more clear and the team could be more clear on how we were using human beings to annotate a small percentage of the data, I would, for sure. What I would say, though, is that once we realize that customers didn't clearly understand this, within a couple of days we added an opt-out feature so that customers could turn off annotation if they so chose. And then within a month or two later we allowed people to auto-delete data, which they also asked for within that time frame.

We're not going to always be perfect, but when we make mistakes, I think the key is that we correct them very quickly on behalf of customers.

NARRATOR:

But even one of the founders of Amazon Web Services approaches his Alexa devices with caution.

JAMES JACOBY:

When do you turn off your Alexa?

ROBERT FREDERICK, Former senior manager, Amazon Web Services:

I turn off my Alexa when I know for a fact that the conversation that I am going to have or whenever I just want to have a private moment. I don’t want certain conversations to be heard by humans, conversations that I know for a fact are not things that should be shared, then I actually turn off those particular listening devices.

DAVE LIMP:

We have had an incredible year. The team has invented a lot on behalf of customers and I cannot wait to show you what we have.

NARRATOR:

So far, Limp and his team have made Alexa compatible with more than 100,000 products.

DAVE LIMP:

Echo Frames allow you to get done more around you and be more present in the everyday.

SHOSHANA ZUBOFF, Author, "The Age of Surveillance Capitalism":

Now they’re going to know more about you than anyone knows. They’re trying to move as intimately as possible and as quietly as possible into everyday life.

DAVE LIMP:

Echo Loop is a smart ring, packed with ways to stay on top of your day.

SHOSHANA ZUBOFF:

Amazon wants to have the entire environment essentially miked.

AMAZON ECHO BUDS AD:

Alexa, start my running playlist.

SHOSHANA ZUBOFF:

They want your walk in the park, they want your run down the city street.

NATIONWIDE INSURANCE AD:

Nationwide’s teamed up with Amazon to bring you the all new Echo Auto.

SHOSHANA ZUBOFF:

They want what you do in your car, they what you do in your home.

DAVE LIMP:

Amazon Smart Oven.

AMAZON SMART OVEN AD:

Alexa, bake for 30 minutes at 350 degrees.

SHOSHANA ZUBOFF:

All these intimacies, all this insight is being integrated—analyzed and integrated.

AMAZON ALEXA AD:

Alexa, alarm off.

SHOSHANA ZUBOFF:

That is an extraordinary kind of power that has never before existed.

NARRATOR:

After Alexa, Amazon would go on to spend nearly a billion dollars to buy Ring—

MALE VOICE:

Hey, bud, the police are on the way.

NARRATOR:

—a doorbell camera and app that Amazon describes as “the new neighborhood watch.”

MALE VOICE:

Hey, hey—get away! Get out of there!

NARRATOR:

To promote it, Amazon has enlisted the help of hundreds of local police departments.

MALE POLICE OFFICER:

It’s a phenomenal tool to assist detectives.

NARRATOR:

They give them access to a portal to request footage and have given free cameras to hand out—and talking points.

FEMALE POLICE OFFICER:

This system is so simple to use.

MEREDITH WHITTAKER:

You have Amazon in partnership with police departments, who have basically turned policemen into Avon salespeople for Amazon Ring. They have given police departments talking points and marketing materials to encourage the installation of Ring by community residents. None of this was public knowledge.

DAVE LIMP:

And this is Ring’s first indoor cam. It is cute, is what I would say.

NARRATOR:

Amazon has continued to expand the scope of Ring. Last fall, Dave Limp unveiled a version designed to monitor the inside of people’s homes.

Within weeks, hackers discovered a way to terrorize Ring customers.

MALE HACKER VOICE:

Come on, can you say the magic word? N*****!

YOUNG GIRL:

Who is that?

MALE HACKER VOICE:

I’m your best friend. I’m Santa Claus.

YOUNG GIRL:

Mommy!

JAMES JACOBY:

Did you see that video?

DAVE LIMP:

I did see that video.

JAMES JACOBY:

What did you think of it?

DAVE LIMP:

I think that that is an industry problem. It's not just about a Ring camera—it could be about anybody's cameras. It's about any device. And we've already investigated that one to make sure what the root cause was.

What we want to be able to do in those cases is we want to minimize them. We'd like to detect them. And we also want to build tools that give them the ability so that doesn't—that makes it harder for those kinds of attacks to happen. There’s a lot of bad people in this world.

JAMES JACOBY:

Here's a device that you had described as “cute” and seems harmless, and I'm just wondering whether you're being straight with people about the attendant risks to your customers that you are obsessed with, supposedly.

DAVE LIMP:

Well, it's not supposedly, we are obsessed with customers. I would say that we are trying to build security features at every level of the stack: operating systems, authentication, fraud detection. We offer things that customers can turn on that make it even harder for those attacks to happen.

MALE HACKER VOICE:

Yo, what’s up? How’s your day?

FEMALE VICTIM:

Who is that?

MALE HACKER VOICE:

What’s going on, buddy? What are you watching?

NARRATOR:

There were a series of similar attacks across the country.

MALE HACKER VOICE:

What’s up, homie? I still see you.

You hungry?

What’s goin' on, my main man Shaq?

NARRATOR:

And it’s not just hackers. Ring has fired some of its own employees for spying on customers.

JAMES JACOBY:

In George Orwell's "1984," he describes a dystopia in which “you had to live, you did live from habit that became instinct in the assumption that every sound you made was overheard.” And I wonder if you ever think about how easily this could become dystopian to some degree.

DAVE LIMP:

Well, I don't want to live in that world. So I do not want to invent the technology that—or have my teams invent the technology that would create that world. And so—but I am an optimist. I think if you take the absolute view of that, we wouldn't invent anything.

JAMES JACOBY:

We're increasingly living in a world in which your products and your designs are there. Can you see how it could be concerning in some ways that we all can't opt out of that world at this point?

DAVE LIMP:

Sure. I can see why it could be concerning to some customers. Our job in building that technology is to build it in such a way that it takes into account for the scenarios that you just talked about as best as we possibly can. The reality of it is that world happened way before Ring or Alexa.

NARRATOR:

That’s something that Bezos himself wrestled with 20 years ago.

Oct. 20, 2000

JEFF BEZOS:

I believe that privacy is going to be one of the prominent issues of the 21st century. There are towns now in the United States that have installed security cameras on every corner and their crime rates decrease by 80%, but do you really want cameras on every corner? There are very strange things that are going to happen over the next 100 years with respect to technology that are going to challenge us as a society to figure out how we want to deal with privacy, so that's—

NARRATOR:

Decades later, Bezos would be at the vanguard of expanding the use of that kind of technology.

AMAZON REKOGNITION PROMOTIONAL VIDEO:

Introducing Amazon Rekognition Video.

ANDY JASSY:

Rekognition allows you to pass an image to us. You can say, "Do these two faces match?" which is incredibly useful for applications in the security space. You can imagine unlocking your—

NARRATOR:

After Amazon rolled out a facial recognition tool, it marketed it to law enforcement.

AMAZON REKOGNITION PROMOTIONAL VIDEO:

Recognize and track persons of interest, from a collection of tens of millions of faces.

NARRATOR:

Police we’ve spoken to say it’s a valuable tool to identify suspects quickly.

MALE POLICE OFFICER:

It appears to be a match, but I’m going to make sure I look at them all.

NARRATOR:

And while Amazon has offered guidelines for how it should be used, there are few laws governing the use of this technology.

MALE SPEAKER:

It returns anybody with warrants that look like her.

NARRATOR:

Civil liberties advocates have raised concerns, as have computer scientists, who worry Amazon has released the software before it's ready and that police are essentially field-testing it on the public on behalf of the company.

ANIMA ANANDKUMAR, Former AI principal scientist, Amazon:

The tools are not what I call battle-tested, and we still do not understand how well they work in the environments in which they’ll be applied. That's where I see a danger.

NARRATOR:

Anima Anandkumar was the principal scientist for artificial intelligence at Amazon.

In her first interview about her concerns, she told us she was particularly alarmed by an MIT study that found the software prone to mistakes with darker-skinned faces. Amazon has questioned the study’s methodology.

ANIMA ANANDKUMAR:

As a researcher in AI I feel it’s my personal responsibility to educate the public of where AI truly is today. Because they hear so much of AI being hyped up—it’s supposed to be magical, it’s supposed to solve all the world’s problems. I see the potential in doing that, but at the same time we need a reality check. We need to ask, "Where is AI today? What can it truly do well?"

JAMES JACOBY:

And when it comes to facial recognition, you don’t think it’s ready for prime time.

ANIMA ANANDKUMAR:

I don’t think face recognition is ready for prime time in challenging applications like law enforcement.

NARRATOR:

Anandkumar and other scientists have asked Amazon to stop selling Rekognition to law enforcement because they say the system’s accuracy is still in question and there are no clear regulations about how it’s used.

We asked Andy Jassy about it.

ANDY JASSY:

I have a different view, and we’ve spent—we’ve had the facial recognition technology out for use for over 2 1/2 years now, and in those 2 1/2 years we’ve never had any reported misuse of law enforcement using the facial recognition technology. And I think a lot of societal good is already being done with facial recognition technology. Already you’ve seen hundreds of missing kids reunited with their parents and hundreds of human trafficking victims saved and all kinds of security and identity and education uses. There’s a lot of good that’s been done with it. But I also understand that it could be misused.

I think at the end of the day with any technology, whether you’re talking about facial recognition technology or anything else, the people that use the technology have to be responsible for it, and if they use it irresponsibly they have to be held accountable.

JAMES JACOBY:

There’s been all sorts of problems with policing in this country. So why allow police departments to experiment?

ANDY JASSY:

We believe that governments and the organizations that are charged with keeping our communities safe have to have access to the most sophisticated, modern technology that exists. We don’t have a large number of police departments that are using our facial recognition technology and, as I said, we’ve never received any complaints of misuse. Let’s see if somehow they abuse the technology. They haven’t done that, and to assume that they’re going to do it and therefore you shouldn’t allow them to have access to the most sophisticated technology out there doesn’t feel like the right balance to me.

JAMES JACOBY:

It’s been difficult to even know how many police departments are using the facial recognition technology, and there’s no public auditing to know whether there are complaints about abuse. How would the public ever know?

ANDY JASSY:

You know, again, I don’t think we know the total number of police departments that are using facial recognition technology. I mean there’s—you can use any number—we have 165 services in our technology infrastructure platform, and you can use them in whatever conjunction, any combination that you want. We know of some, and the vast majority of those that are using it are using it according to the guidance that we’ve prescribed, and when they’re not, we have conversations. And if we find that they’re using it in some irresponsible way we won’t allow them to use the service and the platform.

NARRATOR:

Andy Jassy and Jeff Bezos have said they want governments to hurry up and regulate how law enforcement can use facial recognition. But in the meantime, Amazon has forged ahead and has even discussed its services with Immigration and Customs Enforcement—

AMAZON WEB SERVICES PROMOTIONAL VIDEO:

At Amazon Web Services—

NARRATOR:

—and the U.S. military.

AMAZON WEB SERVICES PROMOTIONAL VIDEO:

—to deliver for our warfighters and defense leaders for when it matters most.

NARRATOR:

Bezos himself has made it clear that he sees Amazon playing a critical role in national security as well as in commerce.

JEFF BEZOS:

We're going to continue to support the DOD, and I think we should. And if big tech companies are going to turn their back on the U.S. Department of Defense, this country is going to be in trouble.

NARRATOR:

As Amazon has revolutionized one industry after another, Jeff Bezos’ reputation has grown to mythic proportions.

FEMALE REPORTER:

You’ve called what Jeff Bezos has built a miracle.

WARREN BUFFETT, CEO, Berkshire Hathaway:

Absolute miracle. I wish I could give him a blood test or something so I could pick it out. But—

FEMALE REPORTER:

You want to clone him?

WARREN BUFFETT:

No, I want a transfusion, actually. [Laughs]

FEMALE NEWSREADER:

Amazon is now worth $1 trillion just one month—

NARRATOR:

His every move moves the markets.

MALE NEWSREADER:

Amazon advertising is just on fire.

NARRATOR:

Starting a digital advertising business to rival Facebook and Google.

MALE NEWSREADER 1:

Some breaking news on Whole Foods right now—

MALE NEWSREADER 2:

Holy cow.

MALE NEWSREADER 1:

Jim, I heard you gasp just now.

MALE NEWSREADER 2:

Holy cow, this is such a game changer.

NARRATOR:

Buying the grocery chain Whole Foods.

FEMALE NEWSREADER:

In a record-breaking deal Amazon is buying Whole Foods for $13.7 billion.

SCOTT GALLOWAY:

The day the acquisition was announced, the nation’s largest grocery company lost billions of dollars because Amazon acquired a company one-twelfth the size.

MALE NEWSREADER:

Everybody thinks Bezos is the smartest person in the world and he’s going to come and crush me.

SCOTT GALLOWAY:

When Amazon announced the acquisition of PillPack—

FEMALE NEWSREADER::

News of the deal sent shockwaves through an industry—

SCOTT GALLOWAY:

—the retail pharmacy sector shed billions of dollars.

FEMALE NEWSREADER:

Well, look at this story. Three titans of industry—

SCOTT GALLOWAY:

When Amazon was mentioned in a press release with Berkshire Hathaway and JPMorgan saying they were looking at health care costs, no detail in what that meant—

FEMALE NEWSREADER:

Health care companies are panicked about Amazon’s forthcoming entry into the health care market.

SCOTT GALLOWAY:

—on the opening bell the next morning, the health care industry’s largest player sheds billions of dollars in value.

FEMALE NEWSREADER:

And insurance stocks are down after Amazon announced a health care partnership with Berkshire Hathaway and JPMorgan Chase.

MALE NEWSREADER:

Bezos basically wants to own the whole economy, right?

FEMALE NEWSREADER:

You think he will.

MALE NEWSREADER:

I kind of think he will. I kind of think that in like 10 years Jeff Bezos owns every single thing there is.

SCOTT GALLOWAY:

So Amazon has these Darth Vader-like abilities to just look at a sector and begin choking it of oxygen without even touching it. Amazon can begin beating competitors without even competing.

JAMES JACOBY:

You actually think that Amazon is having a negative effect on competition in the innovation economy right now?

SCOTT GALLOWAY:

I think it’s a mixed bag. I think that you could argue and there’s evidence that they have inspired innovation in certain sectors. But I think there’s a lot of small companies that aren’t being formed because if you go in to try and raise money for an e-commerce company, it’s, "Well, how are we going to compete against Amazon?" And I say, "Well, the answer can be summarized in one word: impossible."

JEFF BEZOS:

All right, let’s move some earth.

FRANKLIN FOER:

Every single area that he enters into, he manages to succeed in a fairly major way.

JEFF BEZOS:

We had another great Prime Day.

FRANKLIN FOER:

We’ve never seen anything like a company that is so integrated into the fabric of existence, so at a certain point it becomes unavoidable.

FEMALE NEWSREADER:

Amazon just yesterday said—

NARRATOR:

Bezos would even extend his reach into the heart of popular culture.

SCOTT GALLOWAY:

Can you imagine Macy’s starting a media company? We couldn’t even imagine that. But Amazon does it, and people take it seriously.

NARRATOR:

Amazon is investing billions in new shows and movies and on beefing up its streaming service, which streams four times as many movies as Netflix; major league baseball; and PBS shows, like this one. The company now rivals Apple and Spotify in music streaming.

KERRY WASHINGTON:

And the Golden Globe goes to "Transparent," Amazon Instant Video.

JILL SOLOWAY, Creator, "Transparent":

I want to thank Amazon, Jeff Bezos—

JEFFREY TAMBOR:

To Amazon, my new best friend. [Laughter]

FRANKLIN FOER:

Bezos likes to joke about how every time he wins a Golden Globe—

JEFF BEZOS:

—Golden Globe, it helps us sell more shoes. And it does that in a very direct way, because when people—if you look at Prime members, they buy more on Amazon than non-Prime members, and one of the reasons they do that is once they've paid their annual fee they're looking around to see, "How can I get more value out of the program?"

FRANKLIN FOER:

They’re trying to use this entertainment to get people into the pipeline—

AMAZON FIRE TV AD:

Alexa, play "Jack Ryan" on Fire TV.

FRANKLIN FOER:

—to keep them sitting within the structure that is Amazon where it becomes this unthinking habit that’s starting to pattern all these parts of our existence.

WALTER MOSSBERG:

So you're doing the media stuff to encourage people to use more of Prime.

JEFF BEZOS:

Correct.

JIMMY KIMMEL:

Amazon is represented at the Academy Awards. Amazon is the first streaming service nominated for Best Picture.

FRANKLIN FOER:

He’s like one of the old studio bosses right now. He really enjoys having this place in the industry and really seems to relish being at the center of attention there.

JIMMY KIMMEL:

I also want you to know, Jeff, if you win tonight, you could expect your Oscar to arrive in 2-5 business days. [Laughter]

FRANKLIN FOER:

What you see now is someone who is so supremely self-confident. A guy who has become a titan.

FEMALE NEWSREADER:

Amazon is about to get bigger.

FEMALE NEWSREADER:

It’s looking for another home in North America.

NARRATOR:

Bezos and Amazon’s soaring stature would be on full display in September 2017, when the company announced a contest to find a location for a second headquarters.

FEMALE NEWSREADER:

—headquarters, called HQ2.

NARRATOR:

They promised $5 billion in capital investments—

FEMALE NEWSREADER:

—$5 billion—

MALE NEWSREADER:

—$5 billion in local investment—

NARRATOR:

—and 50,000 jobs.

MALE NEWSREADER:

—50,000—

MALE NEWSREADER:

—50,000 people—

FEMALE NEWSREADER:

—50,000 high-paying jobs.

MALE NEWSREADER:

Some cities are salivating over the opportunity.

GREG LEROY:

It was unprecedented because the number of jobs was head and shoulders more than had ever been offered than a deal before. This was a super high-profile auction by the most popular consumer company in the country.

NARRATOR:

The company invited cities across North America to pitch themselves.

MALE SPEAKER:

How about, I don’t know—here?

NARRATOR:

Two hundred thirty-eight took them up on it.

DAVID BECKHAM:

I chose Miami, you should, too.

FRANCIS SUAREZ, Mayor, Miami:

Can’t wait to see you, Amazon.

EBENEEZER SCROOGE:

I, Ebeneezer Scrooge—

NARRATOR:

Some with elaborately produced videos.

EBENEEZER SCROOGE:

I live in Atlanta.

GREG LEROY:

Amazon has demonstrated that it has the power to get thousands of elected officials to remake their workday and bow down before Amazon—

MARK BOUGHTON:

I’m Mark Boughton, mayor of the city of Danbury—

GREG LEROY:

—and offer it huge tax breaks.

MALE NEWSREADER:

Georgia offered $2 billion.

MALE NEWSREADER:

Maryland offered $5 billion.

MALE NEWSREADER:

—$7 billion dollars from New Jersey.

GREG LEROY:

Huge infrastructure promises, huge prime parcels of land.

MALE NEWSREADER:

Philadelphia is offering the most land, 28 million square feet.

GREG LEROY:

They know that these places all don’t have a prayer.

CROWD:

Join us!

JAMES JACOBY:

So to those who saw it as a kind of grotesque display of corporate power, to dangle 50,000 jobs and potential billions of dollars of revenue over metropolitan cities around the country, you say what?

JAY CARNEY:

Look, I think—I used to work for the United States government. We want businesses to invest in the United States. States want businesses to invest in states; cities, city officials want businesses to invest in cities. The proposals we got, the cities made the proposals. They wanted us to come, and they presented to us why they were an attractive option.

NARRATOR:

In November 2018, Amazon announced there were two winners: Arlington, Virginia, and New York City.

BILL De BLASIO, Mayor, New York City:

This is by far the biggest new jobs deal in the history of New York City, the history of New York state.

NARRATOR:

New York City and state had campaigned hard for it, offering up nearly $3 billion in subsidies and tax breaks.

GOV. ANDREW CUOMO (D):

I’ll change my name to "Amazon Cuomo" if that’s what it takes. [Laughs]

NARRATOR:

In return, Amazon promised 25,000 jobs, billions of dollars in capital investments and a

small number of projects earmarked for local community members.

BILL De BLASIO:

I thought it could be a great thing for New York. We are more and more of a tech center. We wanted to consolidate that reality. Having Amazon here would have helped immensely.

PROTESTERS:

Amazon has got to go!

NARRATOR:

But not everyone was enthused about giving billions in tax breaks to a trillion-dollar corporation.

PROTESTERS:

Corporate hand out! Get out!

MALE NEWSREADER:

Alexandria Ocasio-Cortez says the tax break isn’t worth it.

DANIEL DROMM, New York City Council member:

Welcome to today’s oversight hearing on the deal entered into—

NARRATOR:

Though the deal had already been finalized, the New York City Council insisted on a public hearing. It quickly turned contentious.

COREY JOHNSON, New York City Council member:

Mr. Huseman, you mentioned that there are 5,000 employees that are currently working here in New York City for Amazon, is that correct?

BRIAN HUSEMAN, Vice president, Public Policy, Amazon:

Yes.

NARRATOR:

Council members grilled Amazon executives on their position on unions and whether the company would pledge to remain neutral if workers in New York state tried unionize.

COREY JOHNSON:

How many of those employees are unionized?

BRIAN HUSEMAN:

None, sir.

COREY JOHNSON:

None. Would you be OK with agreeing to neutrality so that workers can unionize?

BRIAN HUSEMAN:

No, sir. We respect—

COREY JOHNSON:

You wouldn’t agree to that?

BRIAN HUSEMAN:

Correct, sir, we would not.

BILL De BLASIO:

To go to a city council hearing as Amazon did and antagonize the city council. If they wanted to start a fight, they did a great job. If they wanted to actually show that they were willing to work with this community and our values, they did a horrible job.

COREY JOHNSON:

You are in a union city. And one of the first answers to your question today, is would you be neutral? You said, no! That is not a way to come to our city.

NARRATOR:

It was not the reaction the company expected when it launched the contest. Two weeks later, Amazon pulled out.

MALE NEWSREADER:

Amazon is pulling the plug on its New York plans.

JAY CARNEY:

We decided we didn’t have to be there in that political dynamic. The fact of the matter is, when it turned out the governor and the mayor supporting something turned out not to be enough to persuade other critics that it was the right kind of investment for New York to make, we decided, that’s fine, we can go elsewhere.

JAMES JACOBY:

He said to us that it turned out that the governor and the mayor supporting something wasn’t enough to persuade other critics that it was the right kind of investment for New York to make, so we decided it’s fine, we’ll go elsewhere.

BILL De BLASIO:

That’s an idiotic statement on its face. That is pure idiocy from a guy who should know a hell a lot better. The deal was done. Amazon knew it was done. There was noise, there was posturing by people in the political world, but the deal was done, so all we’re talking about here is the background noise.

In what world are there no critics? Well, yeah, in an autocratic totalitarian world maybe they’re not allowed, and maybe that’s the world that Jeff Bezos somewhere in his mind thinks he is entitled to.

NARRATOR:

At the time, Bezos was involved in some personal turmoil.

FEMALE NEWSREADER:

Amazon CEO Jeff Bezos and his wife of 25 years announcing they are splitting.

MALE NEWSREADER:

The announcement coming amid tabloid reports that Bezos is now in a relationship with former news anchor Lauren Sanchez.

NARRATOR:

The National Enquirer had been pursuing him for months.

MALE NEWSREADER:

The tabloid claims it tracked him across five states and over 4,000 miles.

NARRATOR:

Bezos saw the Enquirer’s report as politically motivated.

CHRIS MATTHEWS:

So what would be the motive here of getting that embarrassing material about Bezos and his alleged affair to the National Enquirer? Who would want to get the dirt in the press?

NARRATOR:

The magazine’s owner, David Pecker, was linked to two powerful men who disliked how they were covered by Bezos’ Washington Post.

The first was President Trump.

PRESIDENT DONALD TRUMP:

It’s put there for the benefit—The Washington Post—of Amazon. That's my opinion.

NARRATOR:

The second: Saudi Crown Prince Mohammad bin Salman, who the CIA had tied to the murder of one of the Post’s journalists, Jamal Khashoggi.

MALE NEWSREADER:

Former CIA Director John Brennan said, "I have no doubt that Saudi Arabia would want to embarrass Jeff Bezos and hurt him financially."

NARRATOR:

David Pecker demanded that Bezos publicly declare the Enquirer’s coverage was not politically motivated or he’d publish intimate photos of him.

LESTER HOLT:

Breaking news tonight: a stunner from the richest man in the world.

NARRATOR:

Rather than give in, Bezos fought back.

MALE NEWSREADER:

Jeff Bezos calling out the publisher of the National Enquirer, David Pecker.

CHRIS MATTHEWS:

Bezos published a personal account accusing the National Enquirer of blackmail, of extortion.

SCOTT GALLOWAY:

He turned the situation around and handled it so brilliantly. He was very transparent, he was very courageous, he admitted some very embarrassing things about himself, didn't try to deny it, and positioned the other individual as the bully and kicked the bully in the nuts and somehow turned this into net positive. I mean, this really was the PR strategy and execution of the ages. I’ve never seen anything like this.

NARRATOR:

Publicly, Bezos has pushed ahead undaunted, a world-famous celebrity. And even after a $38 billion divorce settlement, still the richest person on the planet.

But the calls to reign in his company are growing louder.

SEN. ELIZABETH WARREN (D-Mass.):

Amazon reported $10 billion in profits and paid zero in taxes.

SEN. CORY BOOKER (D-N.Y.):

I will single out companies like Halliburton or Amazon that pay nothing in taxes and our need to change that.

SPENCER SOPER:

Here’s Bezos archiving this American dream and success, and he’s now the target of all of this criticism and basically becomes a symbol of all of these problems.

ANDREW YANG, Entrepreneur:

Amazon is closing 30% of America’s stores and malls and paying 0%.

SPENCER SOPER:

You’re basically a pinata dangling in front of any politician with a populist message. Anyone who wants to talk about wealth inequality, they’re pointing their finger at you.

SEN. BERNIE SANDERS (D-Vt.):

This is why three people own more wealth than the bottom half.

SPENCER SOPER:

If they want to talk about problems with capitalism in general, they’re pointing their finger at you.

ELIZABETH WARREN:

We need to enforce our antitrust laws, break up these giant companies.

NARRATOR:

And it’s coming from all sides.

MALE NEWSREADER:

President Trump just sent a chill down the spine of Jeff Bezos.

MALE NEWSREADER:

Today the president again teed off against Amazon on Twitter.

NARRATOR:

President Trump has made Bezos’ ownership of The Washington Post a regular target.

PRESIDENT DONALD TRUMP:

Washington Post, Bezos uses that as his lobbyist, OK?

FRANKLIN FOER:

He kind of assumed that The Washington Post was operated in the sort of way that he would operate a newspaper. And so he thought that Bezos was dictating coverage to the Post, which we should be careful to say is not the case.

NARRATOR:

Trump has also criticized Amazon and accused the company of evading taxes.

Last year, the company was competing for a $10 billion cloud computing contract with the Department of Defense.

JAMES BANDLER, ProPublica:

This contract would have solidified Bezos’ dominance in cloud computing. This is a hugely important thing.

NARRATOR:

But the company claims President Trump intervened to scuttle the deal.

PRESIDENT DONALD TRUMP:

—and we're looking at it very seriously. It's a very big contract, one of the biggest ever given.

MALE NEWSREADER:

A big win for Microsoft, beating out Amazon—

FEMALE NEWSREADER:

Amazon can protest the outcome, especially given the unusual, unprecedented comments by President Trump. But Amazon hasn't said—

JAMES BANDLER:

It’s extraordinary times we live in that one of the world’s biggest corporations, Amazon, is now saying the president of the United States has corrupted our ability to win this contract.

JAMES JACOBY:

Is there any evidence of that?

JAMES BANDLER:

The evidence is what the president has publicly said.

NARRATOR:

And Amazon’s problems have continued to multiply.

The Federal Trade Commission is now reconsidering its stance on antitrust enforcement and is looking at Amazon, as are regulators in the EU.

REP. DAVID CICILLINE, Chairman, antitrust subcommittee:

This gatekeeper power and how the platforms are exercising it is of tremendous concern.

NARRATOR:

In Washington, Democratic Congressman David Cicilline has launched an antitrust investigation into allegations of abusive conduct by Amazon and the other tech giants.

DAVID CICILLINE:

Given your experience, do you agree with Amazon's statement suggesting that it seeks to act in the best interest of independent sellers?

DAVID BARNETT, Author:

I disagree with that. We get what I might call bullying with a smile.

DAVID CICILLINE:

We were able to get several CEOs to come to a public hearing. That required tremendous courage, because there's a real potential for economic retaliation for their sharing that.

DAVID BARNETT:

We don't have the resources to fight Amazon. We could use some help.

JAMES JACOBY:

In the course of your investigation thus far, and you've had several public hearings, have you seen any evidence of anti-competitive behavior by Amazon?

DAVID CICILLINE:

We have seen evidence of anti-competitive behavior by all of the large platforms as a result of their market dominance. but it sort of doesn't fall on the companies to fix this problem. It falls on us.

Without objection, the hearing is adjourned.

NARRATOR:

Cicilline’s committee is considering everything from imposing limits on what businesses a company like Amazon can engage in to restricting the collection and use of data.

The man who helped Jeff Bezos build Amazon more than 25 years ago says it may be necessary to go even further.

SHEL KAPHAN:

On the one hand, I'm proud of what it became, but it also scares me. And I just feel like it's important for someone in my situation to at least say what they think about what's going on.

JAMES JACOBY:

This is sort of in some ways a baby that you gave birth to, right? And so, I mean, you helped birth Amazon.

SHEL KAPHAN:

Yeah, very much so. In fact, I used to get up several times during the night just to see if it was working and take care of it if it wasn't, so.

JAMES JACOBY:

And when you look at what Amazon has grown into today, you see what?

SHEL KAPHAN:

[Laughs] Well, you don't want to see your offspring become anti-social adults, right? So, I think not all of the effects of the company on the world are for the best. I wish it weren't so, but I had something to do with bringing it into existence. So, it's partly on me.

JAMES JACOBY:

Isn't this just capitalism? Isn't this just a company doing what a company does?

SHEL KAPHAN:

Yes. Yes, it is. I think they're doing what the business schools teach people to do, and they're doing it aggressively and skillfully and with great intelligence. And they will continue to do that unless they're constrained by other forces in society.

JAMES JACOBY:

There are proposals out there to break up Amazon. Is that something you'd promote, the idea of breaking them up?

SHEL KAPHAN:

I think that they're now at the scale where that could potentially make sense.

JAMES JACOBY:

How do you and Jeff and others at the senior leadership level think about the call to break you guys up?

ANDY JASSY:

We don’t think about it very deeply. I’ve been in Amazon now for 22 1/2 years, and I always remember one of the first things I heard Jeff Bezos say back when we could fit the whole company in just one conference room for an all-hands meeting. He said, "I would not go to bed at night fearing your competitors or fearing any external issues. I would go to bed at night fearing whether you’re doing right by your customers." And that really is a credo that we live here, and it’s what we spend most of our time thinking about.

JEFF WILKE:

Well, I understand that we’re big and that we deserve scrutiny. And I think everything that’s large in the economy and in society should deserve scrutiny.

The problem is when you think about us, we’re in a lot of verticals, yes. There’s video and there’s commerce and there’s web services—there are all these things. But in every one of them we have intense competition, and I do understand why when you’re in a lot of them it can seem like we’re everywhere, but the global—if we were everywhere, that means we’re talking about the global economy, not just global retail. It’s so vast we’re a speck.

JAMES JACOBY:

To the public it may sound strange coming from Amazon, which is a company with basically a trillion-dollar market cap, your CEO is the richest man in the world, but Jeff Wilke said to me that you’re kind of just a speck in the scheme of things. Do you see how that can seem strange or in incongruous?

ANDY JASSY:

You know, Amazon as a whole has become—has been successful, but simply because the company’s been successful in a few different business segments doesn’t mean it’s somehow too big.

NARRATOR:

As Jeff Bezos’ company is coming under ever-greater scrutiny, for everything from how it wields power to even its impact on the environment, he’s continuing to look beyond it all.

JEFF BEZOS:

We get to preserve this unique gem of a planet, which is completely irreplaceable. There is no Plan B. We have to save this planet, and we shouldn't give up a future for our grandchildren's grandchildren of dynamism and growth. We can have both. Who is going to do this work?

NARRATOR:

He’s spending a billion dollars a year of his personal fortune on a space exploration company he created.

JEFF BEZOS:

And it's this generation’s job to build that road to space, so that the future generations can unleash their creativity.

NARRATOR:

For Bezos, it’s always been about one thing: his vision for the future.

JEFF BEZOS:

I want you to think about this. This vision sounds very big and it is. None of this is easy. All of it is hard. But I want to inspire you, and so think about this: Big things start small. Thank you.

Love, Life & the Virus
August 11, 2020