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0:04>> I’m Jeff Bezos. >> What is your claim to fame? >> I’m the founder of Amazon.com. >> NARRATOR: From the
0:09award-winning producers of “The
Facebook Dilemma”. >> Richest guy in the world. >> NARRATOR: FRONTLINE
0:15investigates Amazon. >> Is Amazon taking over the world a good thing?
0:21>> NARRATOR: Questioning those who run the company... >> What would you say to someone who feels as though humans are
increasingly being treated like
0:26robots? >> That’s not the experience that I had in setting it up. >> NARRATOR: And those no longer there.
0:32>> Most people would assume there’s a pretty high safety
standard on Amazon. >> And that assumption would be
incorrect. >> The tools are not what I call
battle tested.
0:39>> Some people asking if Amazon
is a monopoly. >> The question for the
democracy is, are we okay with
0:46one company essentially winning
capitalism? >> How do you and
Jeff think about the call to
0:52break you guys up? >> Simply because the company’s been
successful doesn’t mean it’s somehow too big.
0:57>> NARRATOR: Now on FRONTLINE... >> Domination was very much the idea. >> NARRATOR: “Amazon Empire”.
1:04>> Jeff Bezos has already
conquered the retail frontier. Now he's got a plan to colonize
the planets.
1:11>> Bezos is laying out his plans
for colonizing space. >> Bezos is known for going big,
and now he's literally shooting
1:16for the moon. >> NARRATOR: In May of 2019, Jeff Bezos, the richest person
on the planet, unveiled his
1:22latest invention. >> This is Blue Moon.
1:28It's time to go back to the
moon, this time to stay. >> Jeff has said over and over
again that the most important
1:34work he's doing is work in
space. What he's built in Amazon is
really important and really
1:40interesting, and it's, it's
revolutionized commerce. But it's only revolutionized
commerce.
1:47>> NARRATOR: Bezos's plan is to
chart a new course for the future of humanity.
1:52>> Manufactured worlds rotated to create artificial gravity
with centrifugal force.
1:58These are very large structures,
miles on end. And they hold a million people
or more each.
2:04>> NARRATOR: It's an idea he's
had since he was a teenager. >> This is me in high school.
2:11And I want to highlight this quote: "The earth is finite, and
if the world economy and
2:16population is to keep expanding,
space is the only way to go."
2:21I still believe that. >> The way Jeff Bezos sees is it is that consumerism is an
example of how today's society
2:30lives better than our parents
did and our grandparents. And he wants, you know, future
generations to continue to have
2:37an increasingly better
lifestyle. >> These are beautiful. People are going to want to live
2:43here. >> NARRATOR: Bezos unveiled his extra-terrestrial plans at a
time of growing concern about
2:48the empire he's built here on
earth. >> Amazon is the great
disrupter, from books to retail
2:54to grocery stores. >> NARRATOR: For more than 25 years, Jeff Bezos has been
disrupting and transforming
3:00almost every aspect of our
modern lives. >> Once you start connecting the
dots, you see that Amazon is
3:07building all of the invisible
infrastructure for our futures. >> Amazon announced a healthcare
partnership...
3:13>> Amazon is helping the C.I.A.
build a secure cloud... >> How much of the internet do
you run? >> That's a good question, um,
it's a lot, though.
3:20>> NARRATOR: But in recent
years, Amazon-- and Bezos-- have come under scrutiny for their
aggressive tactics and expanding
3:28power. (Bezos laughing) >> Everything that is admirable
about Amazon is also something
3:37that we should fear about it. >> NARRATOR: For the past year,
3:42we've been investigating how
Jeff Bezos built his empire-- and at what cost.
3:48>> And so think about this. Big things start small.
3:57♪ ♪ >> NARRATOR: Jeff Bezos's empire
has its roots not in Silicon
4:10Valley, but on Wall Street. That's where the young Princeton graduate went to work in the
early 1990s, at a secretive
4:18hedge fund called D.E. Shaw. >> David Shaw was the one who
revolutionized Wall Street by
4:25introducing data. And I think Jeff really embraced that, that idea that, "Hey, if
you have data, ultimately, you
4:34win." >> One of the things that David Shaw asked Jeff Bezos to do was
to go and investigate new
4:42businesses, and in particular
this new thing in the early '90s called the World Wide Web. (dial-up modem connecting)
4:49>> We all know that a
communications revolution is underway in this country. >> What is the internet? >> It's sort of the mother of
all networks.
4:55>> It's information highways. >> It's kind of like your remote control to the world. >> NARRATOR: Bezos was quick to
5:02see the untapped potential of
the new digital landscape and was determined to get in on it.
5:08>> I came across this startling statistic that web usage was
growing at 2,300% a year.
5:14So, I decided I would try and
find a business plan that made sense in the context of that
growth, and I picked books as
5:21the first best product to sell
online.
5:28♪ ♪
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
5:35category by far. So, when you have that many items, you can literally build a
store online that couldn't exist
5:42any other way. >> NARRATOR: The store he was imagining didn't exist, so he
decided to build it himself.
5:55♪ ♪
>> The reaction to Jeff's idea to start selling books on the
internet was pretty incredulous,
6:00you know, 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.
6:06She didn't want to see him give up his job.
6:12>> Jeff called, and he told me that he and MacKenzie were
quitting their jobs, and they were moving to Seattle and
starting a company.
6:17I said, "Great, well, what are
you going to do?" He said, "We're going to sell
books." I said, "Nice."
6:23He said, "On the internet." I said, "Oh. Jeff, why will anybody buy anything from you?"
6:28And he said, "Well, we're going to have more books than anybody
else." >> NARRATOR: One of the first
names Bezos considered for his
6:36new website was Relentless.com. >> Why "Relentless?"
6:42>> Relentless meant, "We move on
no matter what." He ultimately, obviously,
decided that "Relentless" wasn't
6:49quite the right fit. Amazon, earth's largest river, was.
6:54Amazon means gigantic. >> In terms of
relentlessness, stopping at
7:00nothing, that's, is that an apt
description of Jeff?
7:05>> No. It's not that Jeff stops at nothing, it's that when Jeff
sets his mind on a goal that he
7:12thinks he can achieve, he won't
stop until he's proven wrong
7:18or until he achieves it. ♪ ♪
7:23>> Jeff and MacKenzie had rented
a house in Bellevue. And then we moved to a small,
second-floor office in the
7:29south part of Seattle. >> NARRATOR: Shel Kaphan was Amazon employee number one, one
of nine former Amazon insiders
7:38who agreed to talk on camera. >> What the company is now was nowhere in my wildest
imagination.
7:45Nowhere, so, the fact that it
could have the-the kind of
7:51position in the world that it
has now, I had no clue. >> NARRATOR: In July 1995,
Amazon.com went live.
8:02>> It was an incredible novelty,
it was tiny and obscure, and it's very hard to imagine, but
the entire universe that Amazon
8:10now dominates did not exist. >> Amazon.com, this virtual shop claims to be the world's
largest bookstore.
8:18>> NARRATOR: It didn't take long
for Bezos's vision to prove prescient. >> What makes us different is
8:23vast selection, convenience-- we
deliver right to the desktop. If our catalog were printed on
paper, it would be the size of
8:30seven New York City phonebooks. ♪ ♪ >> NARRATOR: The company quickly
outgrew the garage and soon had
8:39more than 50 employees. In 1996, James Marcus applied to
8:44be number 55. >> There was a very palpable excitement in the air at this
place, and of course at this
8:53point Jeff Bezos was the first
person to interview every prospective employee. So I was ushered into his
8:59office. He wanted to see how fast you were on your feet. He also always wanted to know
9:04your S.A.T. scores. >> He wanted to know your S.A.T. scores? >> Every time, yes. >> How old were you at
the time?
9:10>> I was 36 or 37. >> This is the original sign that I made for Amazon.com.
9:16Blue spray paint on white poster board. >> Jeff wasn't a figure out of
9:22folklore at that point, he was
not the-the wealthiest man in the world. >> Here's my computer,
9:27Amazon.com up on the screen. "Hello, Jeff Bezos." >> He was a small, nondescript,
sandy-haired man sitting at a
9:35desk with quite a large and
eruptive laugh.
9:40(laughing in multiple scenes)
>> But he wasn't threatening, he
9:47was a normal guy to a sort of
amazing extent. >> HAL 9000 hat, very important.
9:54Hal and I share a birthday, we're both born on January 12. >> It belied, you know, an
10:00enormous, Napoleonic ambition. >> One of the people I really like, Thomas Edison, here's a
model of his original light
10:07bulb. He's famous for saying, "One percent inspiration, 99 percent
perspiration."
10:13(laughs)
It turns out ideas are the easy part, execution is everything.
10:18>> 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
10:24that Jeff wants to sell many
more things than books. And Jeff's idea is that in the
near-distant future, you could
10:31buy a kayak from Amazon. And if, and after you brought the kayak, you could figure out
good places to kayak and buy
10:37travel services from Amazon." So, those ambitions were very clear, and this was very early
on.
10:44But he was clearly thinking in
those terms from the get-go. >> How did that ring to
you at the time? >> A little bit exciting and a
little bit nutty.
10:53>> Amazon.com, very good
website. You should really try it. (Bezos laughs)
10:59>> If you signed on to work at
a-a kind of futuristic bookstore, and the guy who
owned it was suddenly talking
11:06about selling, you know, every
object in the universe, you just weren't sure how seriously to
take it.
11:12(Bezos laughing)
(Bezos screaming playfully)
11:17>> NARRATOR: Though his public
image was often unserious...
11:23>> That was awesome! >> NARRATOR: Inside the company, Bezos was a hard-charging
manager relentlessly focused on
11:30the principle that would make
Amazon one of the most trusted brands in the world: the
customer always comes first.
11:38>> This culture of customer
obsession... Obsessive focus on customer... Obsesses over our customers...
11:43Totally obsessing over the
customer experience. >> We used to call it customer
ecstasy.
11:49It means building, delivering,
focusing on your customer. And we did it, you know, in the
very, very early days at every
11:57stage. >> NARRATOR: Jennifer Cast was there in the early days and is
one of six top Amazon executives
12:05the company put forward to
speak to us. >> Customer obsession was our
North Star.
12:12And so, you know, it was a place
where we knew we were a part of something that was new, the
internet.
12:19There was an excitement that we
were doing something that hadn't been done before. It was exhilarating.
12:24We were all aligned around
building for customers. >> Hey, you guys.
12:30>> Hey. (Bezos laughs)
>> I've heard there was an empty chair that would often
be put at meetings.
12:36>> Yeah. >> Who was in the empty chair? >> Yeah, so that empty chair was there to remind us all to
understand the customer, have
12:43empathy for the customer,
understand the details of the customer experience. The customer isn't there, we
12:49have to bring forward the voice
of the customer. (phone ringing)
>> Thank you for calling
12:54Amazon.com. >> NARRATOR: And Bezos quickly learned that in this new online
world, he could understand
13:01exactly how customers were
behaving. >> All orders do need to be
placed online.
13:06>> It was made clear from the
beginning that data collection was also one of Amazon's
businesses.
13:12All customer behavior that
flowed through the site was recorded and tracked. And that itself was a valuable
13:17commodity. >> Have you visited our website? >> We could track how a customer
navigated through the site.
13:24So 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
13:30order, we could see what you put
in your basket and did order. So that's when we started
realizing, "Man, this is rich.
13:35This is rich, rich, rich." And so we've used it for everything. >> What do you do with that information?
13:41>> That's the data that allows us to predict, or try to
predict, what books that you
13:46would like that you haven't
discovered yet. >> NARRATOR: Bezos treated the
site as a laboratory, where he
13:53studied customer behavior along
with his chief scientist Andreas Weigend.
13:59>> I was shocked to see how predictable people are. If you take the time of the day
14:06into 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
14:13the site today, you know what
they're falling for. >> Whoever owns, collects, the
data, if you have access to it
14:24and rights to data, then you are
king. It's all about the data.
14:30Everything. >> One of the most fascinating
kind of tools we have at our
14:35disposal is the ability to do
active experiments. It's, you know, it's kind of
this huge laboratory.
14:43>> We did not think about it as
exploiting, we thought about helping people make better
decisions.
14:50>> I was starting to feel that
that was less respectful toward the consumer, who was, after
all, supposed to be our god, the
14:56person whose ecstasy was our
very reason for being. And it was closer to getting a
cow into a milking stall and
15:04extracting as many pails as
possible during each visit. And that felt a little more
unsavory.
15:09But that was the business of
Amazon. >> Amazon has added 880,000 new
customers...
15:15>> NARRATOR: While Bezos was
using these insights to bring more and more customers into
Amazon...
15:21>> The number of customers who
use the website has increased fourfold... >> NARRATOR: There was one thing he hadn't done yet.
15:27>> The company's never made a profit. >> That's right. >> Now, why... how does that...
why... how does that...?
15:33>> It seems like a new math,
doesn't it? >> It does. >> NARRATOR: Bezos would spend years losing money trying to
beat his competition, and he
15:42convinced investors to go along
with it. >> One of Jeff Bezos' greatest
accomplishments has been his
15:51ability to get Wall Street to
accept the fact the first 20-some years, Amazon wasn't
going to be very profitable.
15:57And that's okay because they're
building infrastructure that will create huge opportunities
for them to gain scale and gain
16:03customers and gain business. >> NARRATOR: He spelled it out in a letter to shareholders
after the company first went
16:10public: "It's all about the
long term," he wrote, rather
16:16than short-term profits or Wall
Street reactions. >> He essentially says,
"We are going to forego profits
16:25in order to take market share. That our strategy is to lose money, which enables us then to
put other companies out of
16:32business who can't afford to
lose money." >> NARRATOR: That strategy
wouldn't sit well with critics like Stacy Mitchell, who
advocates for small businesses.
16:41>> In essence, at the very
beginning, he's signaling to shareholders, "I have a strategy
to monopolize the market, and
16:47that'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.
16:55>> NARRATOR: Investors also recognized Bezos' essential
advantage over physical stores,
17:02which had to charge their
customers sales tax, unlike online businesses. >> So, not collecting sales tax
17:09gave Amazon a big leg up over
bricks and mortar retailers. And that was central to their
early strategy of gaining
17:16market share as quickly as they
can. >> What booksellers were saying
to me is that, "This is driving my customers to Amazon.
17:22They'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."
17:30>> So it was a very irksome,
early, big issue for the book vendors, first of all, they were
kind of the canaries in the
17:35mine, so to speak, and then lots
of other retailers. ♪ ♪
>> Amazon has added thousands of
17:42warehouse workers and three
million square feet of space. >> NARRATOR: Amazon's sales-tax
advantage would be central to
17:48its success as it expanded
beyond books, into other products.
17:53>> And we have a fantastic selection of things you can
look at. Electronics and then of course
toys. Yeah, thank you, here is, we've
got have the friendly Pokémon.
18:01This is more than ten times the
selection that you will find in a typical, physical world
software store.
18:07>> NARRATOR: But Bezos was still
a long way from his goal of Amazon being the place where you
could buy everything online.
18:13(drills whirring)
And he saw a way to achieve it.
18:21>> Amazon could soon become the
Walmart of the internet. >> NARRATOR: There were
thousands of businesses eager to sell online.
18:27Bezos offered them a way to do it. >> Amazon is transforming itself from an online bookstore to an
online mall.
18:34>> NARRATOR: He transformed
Amazon into a retail platform where anyone could sell their
goods to his customers and
18:41invited thousands of other
businesses to be a part of it. >> It's the easiest place for
anybody, small or large, who
18:48wants to set up shop online to
sell online, because they can access our 12 million-plus
customers.
18:55Anybody, all comers. >> We're talking about hundreds of thousands of companies with
literally tens of millions of
19:03products. >> NARRATOR: Name-brand stores started selling on Bezos's
platform, and so did tens of
19:11thousands of small
entrepreneurs. >> Everyone knew Amazon.com.
19:17The only people that knew SuperDuperHoops.com were the
ones that were searching to buy a basketball hoop and saw our
name on an advertisement.
19:24To us it was really a
no-brainer. We knew that we would, you know,
increase our sales.
19:30First year we did 100,000, next
year we did a million, we did two million, four million, we
were doubling every year in the
19:35early days. >> NARRATOR: It was great for the companies-- and even greater
for Jeff Bezos.
19:41>> Amazon has become the most
recognizable name in e-commerce. >> NARRATOR: Not only would he
take a cut of everything other
19:46businesses sold, he'd also keep
his own store on the platform, competing against everyone else
in the marketplace he owned and
19:55controlled. >> He owns the Main Street. He has the Main Street real
estate.
20:02Not just one building on the
corner, the entire Main Street. ♪ ♪
>> NARRATOR: How Amazon would
20:11wield its power over the online
marketplace would eventually become a question for government
regulators, but early on, there
20:19were indications. The first to see them were book publishers.
20:26>> Amazon took over a large market share of the publishing
industry very, very fast. They were very quickly in a
position to demand concessions.
20:35You know, I think that was a
moment where publishers started to realize, "Oh, wait a minute,
like, we... they're our partner,
20:40but they now have the
beginnings of a boot on our windpipe." >> NARRATOR: Inside the company,
20:48they had launched a strategy
that some called "the Gazelle Project," because they'd heard
Bezos wanted them to pursue
20:54publishers the way a cheetah
pursues a sickly gazelle. >> Well, you don't go after the
strongest.
21:00It's like the cheetah. The cheetah looks for the weak, looks for the sick, looks for
the small, that's what you go
21:06for. So don't start with, you know, number one publisher. Start with number seven publisher and then number six
publisher, and by the time you
21:14get to number three, two, and
one, the noise has gone, gotten back to them.
21:19They're going to know this is coming, and chances are you may
be able to settle that without a full-on war.
21:27>> We were just this little mom and pop publishing company,
publishing poetry books and
21:34translated fiction. >> NARRATOR: In the early 2000s, the number of books Dennis
Johnson was selling on Amazon
21:41had been rising steadily. Then one day, he got a phone call. >> Our distributor called us up
21:48to talk about our Amazon
contract. And he said, "I went out to
dinner last night with Amazon,
21:55it was like going out to dinner
with the Godfather. They want a kickback."
22:02That's the word he used, kickback. And he said they wanted four percent more of our sales.
22:10>> Was that unusual? >> It was... in our experience,
it was totally unprecedented,
22:16yes. >> NARRATOR: Randy Miller ran the European book team and says
he saw nothing wrong with
22:23Amazon's tough tactics to
challenge publishers on prices and profit margins.
22:28>> 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
22:35references on the product page,
their product page, saying, "You want it cheaper, you want this
book for, on this topic for a
22:42way cheaper price? Click here." And we'd send them to whoever we
thought their worst competitor was.
22:47That was how Amazon forced their vendors to-to comply. (stammering): But that's an
22:52old Walmart trick, I mean, it
wasn't like Amazon created that. And it made, it made a
difference. And, you know, Jeff kind of got
excited about it.
23:01>> NARRATOR: When Dennis Johnson
still refused to give in to Amazon's terms, he says the buy
button on all Melville House
23:08books suddenly disappeared,
making it impossible for customers to purchase them on
Amazon.
23:14>> I mean, this is the company
that referred to little publishers like me as wounded
gazelles, I believe?
23:22That's how they think, that's
how he thought from the beginning. And we eventually had to pay
23:28what at the time I called a
bribe. And our attitude toward Amazon
was, you know, "Render unto
23:36Caesar that which is Caesar's." And then carry on as best as you
23:42can. >> Jeff Bezos may say that Amazon comes along and has
given publishers like yourself
23:48access to a huge distribution
channel for your books.
23:53Has Amazon been good for your
business? >> Well, absolutely they have. Any bookseller that sells our
24:00books is good for our business. So, I'm not complaining that Amazon is selling our books.
24:05I'm just complaining of the way that their tactics are hurting
the industry I love.
24:11>> NARRATOR: In addition to
granting interviews, Amazon responded to written questions.
24:17Regarding Dennis Johnson's characterizations, it told us,
"Amazon disagrees with this
24:22account." >> Were you uncomfortable with that sort of
ruthlessness ever?
24:27>> Well, no, 'cause I was in
retail-- I mean, people think that's ruthless. You know, I looked, and some people at Amazon, "Wow, that's
kind of mean," and I'm like,
24:34"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 a finite margin, and
24:42somebody's going to have to
give. And-and a lot of times Amazon
wasn't the one giving. >> Kindle is a purpose-built
reading device.
24:50>> NARRATOR: The tension between
Amazon and book publishers would ramp up even further with the
unveiling of the Kindle, which
24:57helped the industry transition
to the digital age, but gave Amazon more power to set prices
lower.
25:03>> And new releases are only
$9.99.
25:09>> NARRATOR: Around that time,
Barry Lynn, an advocate for broad antitrust enforcement, was
growing increasingly concerned
25:17by what he was hearing from
publishers. >> If the door was open, the
publisher would say, "Hey, you
25:23know, Amazon, they're just a
terrific customer, they're our biggest customer. They buy the most books, they
25:29sell the most books. We love them." Then you close the door, and
they say, "Amazon is destroying
25:35our business model, they're
destroying our business, they have way too much power, we
must do something about them."
25:42>> NARRATOR: Lynn wanted
publishers to speak up publicly and thought federal
antitrust regulators might
25:48investigate whether Amazon was a
monopoly, illegally abusing its market dominance in
anticompetitive ways.
25:56>> And they'd say, "No way, I'm
not going to talk about Amazon in public.
26:01I'm not talking about them on Capitol Hill. They will take retribution against me." >> To which you
26:07responded? >> "Well, that's why we have to do something about it." >> NARRATOR: Jennifer Cast ran
26:12Amazon's books division in its
formative years. >> We've had a difficult
time in some ways getting
26:18publishers to talk to us on
camera about Amazon. In part, it seems the reason is
that they're afraid.
26:25How do you react to that, that
publishers find it uncomfortable to talk about
Amazon publicly?
26:33>> I don't know, I mean, I-I
haven't seen that. >> Yeah.
26:38>> I haven't been in your shoes. I'm sure they have... I mean,
if you're saying that they-they
26:43don't talk negatively about us,
I mean, I know they have a lot of good things to say about us.
26:48Um, you know, I-I don't know why they wouldn't speak their minds. We certainly value speaking our
26:55minds. >> There is this well-known anecdote about
cheetahs and gazelles, this Gazelle Program.
27:00Do you know about that? >> I don't. >> We've talked to former Amazonians about it,
where Jeff had said, "We should
27:06basically try to negotiate with
book publishers and try to get better terms and treat the
smaller publishers as a cheetah
27:15would go after a wounded
gazelle." >> I didn't hear the cheetah
and gazelle example, but what we
27:21were looking for was people that
were willing to move away from the old model of bricks and
mortar to a new model, which
27:28was, you know, a-a virtual store
that had many different types of
27:35opportunities to present their
books to customers. >> I want to talk a little bit
about how we think about
27:41innovation at Amazon.com. >> NARRATOR: Amazon would begin to accumulate even more power in
2005, when Bezos quietly rolled
27:50out a revolutionary new program:
Amazon Prime. >> Now they have something
called the Prime shipping
27:55program. >> Amazon Prime-- we only launched this a week ago--
you pay $79 a year, and you get
28:03two-day shipping for free. >> NARRATOR: It was a risky bet, and it paid off. >> The lynchpin, or the glue, if
28:09you will, and probably the
seminal moment in Amazon's business history, was the
introduction of what has become
28:17the most successful membership
program in history, and that's Prime.
28:22>> Many of you in this audience will already be Amazon Prime
members, bless you. This is very much appreciated.
28:28>> It changes the way you shop. >> NARRATOR: Eventually more
than 150 million people would
28:33sign up for the free shipping--
a tremendous expense for Amazon. But to Bezos, it was worth it.
28:41>> The Prime program at Amazon is one of the most important
drivers of Amazon's growth.
28:47When 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
28:54Amazon Prime program becomes a
mechanism that keeps bringing you back as a customer to keep
buying and keep searching for
29:00new products on Amazon. >> NARRATOR: Two-day delivery anywhere in the country was a
big promise for a company that,
29:08at the time, had less than ten
warehouses. So Bezos went on a building
spree.
29:18♪ ♪
Across the country Amazon warehouses began to spring up,
filled with millions of
29:24products being sold on Bezos's
platform. He'd call them fulfillment
centers, and they'd create
29:31hundreds of thousands of jobs
in places hard hit by the Great Recession.
29:36>> Ten percent of Pennsylvania residents unemployed... >> Job market is in complete
29:42disarray. >> NARRATOR: Like Allentown, Pennsylvania. >> At that time, it was tremendous news that an employer
was coming and actually opening
29:48a facility and hiring people,
versus, you know, gutting half
29:53the staff. >> NARRATOR: Spencer Soper was a business reporter for the
"Allentown Morning Call" when Amazon opened in the area in
2010.
30:00He began hearing stories about
working in the warehouse.
30:07>> People are basically in this
big, sprawling warehouse that's stocked with goods in very
random fashion.
30:13And they have scanners that
tell them which things to get. And people are walking maybe
ten, 15 miles a day.
30:19So people just kind of
crisscrossing this big warehouse all day long. >> NARRATOR: As workers told him
30:25about the punishing pace to meet
the daily quota of packages, and the intense heat, Soper and his
colleagues started to
30:32investigate further. >> People really felt like Amazon was playing fast and
loose with their, with their
30:38health. >> NARRATOR: Soper discovered there had been numerous
complaints to authorities at the Occupational Safety and Health
Administration, OSHA.
30:46>> They actually had a complaint
from an emergency-room doctor who called their hotline one day
saying, "Listen, you might want
30:55to check out this Amazon place. I've had, like, people parading through my emergency room to be
treated for heat stress."
31:01There was a security guard who
worked in the facility who sent a complaint to OSHA saying that
he saw pregnant women suffering
31:08heat stress in-in the facility. And so there's just, like, these red flags right and left.
31:14>> NARRATOR: After an investigation, OSHA said Amazon
needed to keep the temperatures in the warehouses lower.
31:21In a statement at the time, the company said it installed new
industrial air conditioning and
31:26pledged that worker safety was
its number-one priority. >> Amazon is shrewd
businesspeople, shrewd
31:32businesspeople know when they
have leverage. And when you're the only shop
hiring people in town, you can
31:38push them a lot harder than
you can when-when they've got alternatives.
31:43>> NARRATOR: Over the following years, Amazon would hire
hundreds of thousands of workers and become one of
the largest jobs
31:49creators in the country. At the fulfillment centers, Bezos experimented with new
techniques and technologies to
31:57boost productivity. >> Willingness to experiment is the key to be able to do new
things.
32:03So we do, you know, hundreds of
experiments every day in our fulfillment centers to get a
little bit better.
32:09Kind of like incremental
invention. ♪ ♪
>> NARRATOR: When a company
32:15called Kiva perfected a
warehouse robot, Amazon bought the whole company. >> Amazon has acquired Kiva
32:21Systems. They make shipping robots. >> NARRATOR: It helped transform
the work environment in Amazon's
32:27warehouses. >> When I first showed up at
32:33Amazon in 1999, I led our Global
Operations team. >> NARRATOR: Jeff Wilke created
the Amazon fulfillment center
32:39system and is one of two C.E.O.s
under Jeff Bezos. >> As we've added 200,000
robots, in that same time frame
32:47since 2012 we've added 300,000
people in our fulfillment centers. So what happens is the robots
32:53change 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,
33:01because we present a smaller set
of options to-to employees. And that's all good for
customers, and it's good for
33:07employees too. >> NARRATOR: But at the same time, complaints have persisted.
33:13>> People who've worked in warehouses for decades say,
"This is different. This is not the same."
33:19We're here today because we want to make sure that these
workers know about their rights in the workplace, especially
around heat.
33:24>> NARRATOR: Sheheryar Kaoosji
is an advocate for warehouse workers in the San Bernardino,
California, area-- an Amazon
33:31hub, with ten fulfillment
centers and over 15,000 employees.
33:37>> 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
33:46psychologically. >> NARRATOR: We sat down with a group in San Bernardino who'd
recently worked at Amazon.
33:53>> When they first got here, I
thought it was exciting. Like, for me, I was thinking
maybe I could find a-a place
33:58where, you know, I'm going to
set roots of a good job, you know, move up in-in the place. But after being there for a
34:04while, I was like, "There's no
way." >> It's like, "Okay, this is
where I can probably make a career."
34:10But once you worked there for a certain amount of time, it's
just like, it's just not realistic, how they expect you
to work.
34:17>> NARRATOR: Like dozens of
workers we've spoken to around the country, they say they've
struggled to keep up with the
34:23rate Amazon expected them to
pick and pack items. >> How realistic are the
rates that they're giving you?
34:30I mean, what's... >> Not realistic at all. >> Not-not realistic? >> No.
34:35There's absolutely no way to
make rate, you know, you got to find little ways to-to cheat
it, because once you hit rate, by the end of the week, they
raised it, they bump it up
34:42again. Because they start seeing, "Hey, people can hit those rates,
can hit those numbers, hey, let's push them a little
harder."
34:50Every week it seemed like it was
going up.
34:58♪ ♪
>> You have security cameras right behind you at all times,
that are looking at you 24-seven.
35:04And if you don't meet standards or the rates, you're out the
door, you're just disposable.
35:11>> Every worker has a scanner at
all times that basically track exactly where you're at.
35:17>> And they have a little blue line at the bottom of the
screen, and it has, like, how
35:23many seconds that you have to
have it done by the time it hits
35:29zero, and it puts you into panic
mode. >> And pretty much you can't
talk to people, you can't be in
35:35the same aisle as them, you
just constantly have to sit there scanning like a robot all
day long.
35:40If they catch you not scanning,
you get a write-up. >> And what they're doing is
they're producing this mass of
35:45data that they are using to be
able to analyze the entire workforce.
35:53>> We're not treated as human beings, we're not even treated
as robots. We're treated as part of the
data stream.
36:00>> It's the incentive at
any warehouse, on any assembly line, to get the most out of any
worker.
36:05>> Yes. >> To make rates, to-to be as efficient as possible, to
be as productive as possible. So, I don't see exactly what's
different about Amazon as
36:13opposed to any other warehouse. >> Amazon is the cutting edge.
36:20Other warehouses are starting to
adopt these technologies, other companies are definitely
interested in doing what Amazon
36:25is doing. Data collection could become basically the standard for all
workers, and that there's...
36:31you're never good enough,
you're never able to keep up.
36:36♪ ♪
>> NARRATOR: Amazon told us work rates are not based on
individual employee's
36:42performance, and that the
scanning devices workers use are not for tracking people but
inventory-- a common practice in
36:49the warehouse industry. >> We've talked to workers around the country,
both current and former workers.
36:56They've described the pace of
work as being really grueling. In the early thinking about
rates and how far you could
37:04push human beings in terms of
their productivity, what was the thinking about that?
37:09>> Well, obviously if the rates are too high, you're not going
to have people showing up for work.
37:14So, we have 600,000 people at the company, most of them are in
the fulfillment centers, and
37:19they-they come to work every
day, they stay for years. These are considered great jobs
in the hundreds of communities
37:27where we have fulfillment
centers all over the world, and in the U.S. we have, almost
every state has an operation in
37:33it, and people come to work
because these are great jobs. They're safe, we pay double the
minimum wage, the national
37:38minimum 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
37:45like 20 weeks. So, the rates are set so that we can accomplish what we need to,
which is get orders to customers
37:53in a-a reasonable time and in a
high-quality way, and that creates a workplace that people
want to come back to, and they
38:01do. >> NARRATOR: Amazon wouldn't tell us how long
fulfillment-center workers stay on the job or how often they're
injured.
38:09But workers we spoke to say the
rates are higher than other warehouses-- and that the
company rebuffs attempts to
38:16unionize. >> We do not believe unions are in the best interest of our
customers, our shareholders, or
38:22most importantly, our
associates. >> NARRATOR: This is a clip from
a video the company says it used in the past to teach
managers about employees'
38:30rights and labor laws. >> The most obvious signs would include use of words associated
with unions or union-led
38:37movements like "living wage" or
"steward." >> Early on, Amazon took
a position to basically be
38:44anti-union. Why was that decision made? >> I don't think we made the
decision to be anti-union.
38:49We just feel that all of the
things that-that unions would-would want to-to get us
to do, we've already done.
38:57>> What-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
39:05a unionized environment? >> I don't know, it's hard to speculate on that, but-but I do
think that we have the
39:10obligation to set rates that
are, again, going to encourage people to seek these jobs and
deliver for customers, you know,
39:20what we've promised. >> What would you say to someone, though, who's, who's
worked in-in your fulfillment centers that feels as though
there's been... that-that humans
39:28are increasingly being treated
like robots? 'Cause it's something that we've
actually heard, and I don't sense it's hyperbole.
39:35>> Well, that's not the experience that-that I had in
setting it up or that I've
39:40seen. It's, it's certainly true that-that these jobs are not for
everybody, and there-there may
39:46be people that don't want to do
this kind of work. >> NARRATOR: Amazon executives
also stress the company has
39:52become an industry leader in
training its workforce for career advancement.
39:58>> We just announced a pledge recently to spend $700 million
to upskill, which is basically
40:04creating career opportunities
for people, 100,000 of our employees. We pay 95% of tuition to go
40:09to-to college to get a skill
that isn't about Amazon, that's about creating options for the
employees, and I would expect
40:16those people to take advantage
of that, work for us for a couple of years and then go do
something that they would much
40:22rather do, and that's okay. >> There will be people
40:27that will hear what y'all are
saying, and they'll say, "Well, you signed up for physical
labor, a job is a job, there
40:34were benefits, and they are now
investing $700 million to
40:39do retraining for other types of
jobs. What's the real grievance? What is there to complain
40:44about?" >> I actually used to think that way for a while whenever I, when
I first started, whoever I heard
40:49complaints 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
41:00have to ignore to make rate. It's not just you go in, okay, and you-you do your job, and
that's it.
41:05>> So, you're in, you're
in a weird bind. >> It's incredibly hard to meet
rate while following all the
41:12safety procedures. >> A complaint that we've heard from workers in
terms of the sort of automation
41:19of their work as humans, some of
them telling us that, yes, there are high safety standards in
these fulfillment centers, but
41:26that in order to make rate,
they're having to cheat the standard a little bit. >> Well, I would say that's not okay.
41:32So I, from the moment that I arrived 20 years ago, I made it
very clear to our operations
41:37teams that we will not
compromise the safety of our employees to do anything else.
41:42So, we have, we have a culture that if-if we are asking people
to do something that is, that
41:48they have to do too fast to be
safe, they can raise their hand and say, "This isn't right,"
and-and we'll fix it.
41:54(phone vibrates)
>> NARRATOR: For years, Amazon has put a happy face on its
business and its workforce.
42:00("Give a Little Bit" by
Supertramp playing) >> ♪ Give a little bit
Give a little bit of your
42:10love... ♪
>> Even in Amazon's commercials, the people are almost like
shadows and silhouettes.
42:16It's all about boxes, and
there's just like happy boxes singing and bumbling their way
to your door, like, oh, no, no.
42:21>> ♪ There's so much that we
need. ♪ >> Hello. >> Hey.
42:27>> 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, how'd this get here?" >> ♪ I'll give a little bit of
42:34my love to you. ♪
>> They wanted people to just think, "Whoa, magic!"
42:41♪ ♪ >> NARRATOR: And magic was a big
part of Bezos' marketing
42:47strategy, with an emphasis on
the company's miraculous level of innovation and growth.
42:54>> We started Amazon Prime in 2005, but then something very
extraordinary happened.
43:03This. In 2011, the slope of that graph
43:09changed-- a lot. >> NARRATOR: As Amazon grew, he wanted his top executives to
think about the kind of company
43:16it was becoming. He wrote a memo titled,
43:22"Amazon.love." A copy of it was obtained by Brad Stone.
43:28>> 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
43:35are loved. That there is something that we get uncomfortable with when we
talk about very big companies.
43:42"Rudeness is not cool. Defeating tiny guys is not cool.
43:48Risk taking is cool. Winning is cool. Polite is cool. Defeating bigger, unsympathetic
43:54guys is cool. Inventing is cool. Explorers are cool.
43:59Conquerors are not cool." >> Some businesses, you can
tell when you go in and have
44:05meetings with them, they have a
conqueror mentality. And there's a big difference
between being a conqueror and
44:11being an explorer. And I think in, you know, this very inventive space that we're
in, it pays to explore.
44:21♪ ♪
>> NARRATOR: But to some watching Amazon's growth, the
company was falling short of
44:27that ideal, and taking steps to
make sure nothing got in its way.
44:36♪ ♪ In 2013, Amazon was moving to
create its own delivery system and made a key decision: rather
than hire its own drivers, it
44:45built a network of independent
businesses to deliver packages.
44:50>> They weren't just going to
dabble here and dabble there. They were going to go and create
a system that would rival
44:57FedEx or UPS. >> NARRATOR: ProPublica reporter Patricia Callahan, in
conjunction with Buzzfeed, has
45:06investigated the system Amazon
set up. >> They figured out a way to get
around regulation.
45:13The cargo vans they choose are
big enough to stuff with hundreds of Amazon packages, but
they're small enough that
45:20they're not regulated by the
federal government. >> An 84-year-old woman struck
and killed by an Amazon delivery truck.
45:26>> A woman hit and killed in a parking lot. >> NARRATOR: ProPublica and Buzzfeed found that drivers are
under intense pressure to
45:33deliver packages. >> After striking him, the van maneuvered around Salinas
and his dog. >> NARRATOR: And they documented
more than 60 crashes, including
45:4013 deaths, since 2015. >> An infant critically injured in a car crash has died.
45:47>> When it came time to figure out who's responsible, Amazon
would always say, "It's a
45:53contractor, it's not our
responsibility." >> Now you've been able
to find 13 deaths.
45:58And that's over the course of
several years. Is that statistically
significant given all of the
46:04packages that they deliver in
any day or any given year? >> I don't pretend to claim
that there's only 13 deaths and
46:11that I found every single one. I just found enough to show that
46:16this is happening around the
country. With UPS, there's a record.
46:22There's a federal record you can look at how many serious injury
and fatal accidents they have. With Amazon, that doesn't exist.
46:30No one knows the safety records of all of Amazon’s contractors.
46:36>> NARRATOR: Amazon disputed the ProPublica report. It would not release any data on
46:42crashes involving its driver
network but told us it had a "better than average" safety
record and that nothing is more
46:49important to them than safety. >> Any accident is one accident
46:55too many, so just as we were
focused on safety in the fulfillment centers and product
safety, we are... we set very
47:02high standards with all of those
partners for safe performance. We have training videos for the
third parties that work with us
47:10to help them understand what we
expect in terms of the drive, we have mapping software that we
use to help them find the right
47:17routes. Every one of our drivers is required, including the third
parties, are required to have
47:23comprehensive insurance,
including liability insurance, so that if there is an accident
that the person who's injured is
47:33covered. >> Amazon wants to get Prime members their packages even
faster... >> NARRATOR: In the last year,
Amazon announced a change to the
47:40way it handles Prime deliveries. Instead of delivering packages in two days, they promised to do
it in one.
47:48>> Free next-day delivery all
across the U.S.... >> It's impossible for me to
imagine a world 20 years from
47:54now where a customer comes up
to me and says, "Jeff, I love Amazon. I just wish your prices were a little higher."
48:00Or, "I love Amazon. I just wish you delivered a
little more slowly." >> NARRATOR: At the same time
the delivery network was being
48:07set up, Amazon was also rapidly
expanding its product offerings, inviting more sellers onto the
site.
48:14(computer plays tune)
Including those from China. >> It basically makes it to
where it's super-easy for these
48:23companies, who are maybe
not as careful with adhering to the law, where they're able to
just start a business up on
48:30Amazon, import some stuff, sell
it, cause some problems, and
48:35then disappear. >> NARRATOR: Rachel Greer worked in product safety at Amazon, and
worried that the site was being
48:42flooded with untested and
potentially unsafe products.
48:48>> Are there proper warnings? Has it been safety-tested for durability? If a child chews on it, will
48:53the paint come off? Is that paint leaded? >> Most people would
assume that there's a pretty
48:59high safety standard on Amazon. >> And that assumption would be
49:05incorrect. >> NARRATOR: She says that's because Amazon, like other tech
companies, takes the position
49:11that it's not legally
responsible if its customers are harmed by products sold by third
parties on the site.
49:18>> If someone buys something
that causes harm at Walmart or at Target, a consumer can sue
Walmart or Target.
49:25>> Right, 'cause no one's
forcing you, when you come into Walmart, to enter the doors
of Walmart. They aren't making you sign
away your rights.
49:32>> But when do you sign
that when you go on Amazon.com? >> When you make your account. When you accept the terms and
49:38conditions. >> NARRATOR: People have been challenging Amazon's terms and
conditions in court.
49:45Some have even been successful. >> Ultimately, who's on the hook
49:51when a customer buys a
dangerous product on Amazon? Who takes ultimate
responsibility for that?
49:57>> Well, in the rare case where
that, where something like that happens, if it's a third-party
seller, the sale is by a
50:03third-party seller, and it is
the seller's responsibility to, to sell a legitimate product to
a customer, and then, when
50:09Amazon is the retailer, and we
sell a product to the, to a customer, then it's our
obligation to make sure that we
50:16understand the manufacturer and
the supply chain for that product and its, and its safety.
50:23>> But when the other sellers are selling in your
store, you're not responsible
50:28for it ultimately, if they're
selling your customer a defective or dangerous product?
50:34>> I think the way things work in the U.S. is that the seller
of record is the person who is
50:41setting the price and who is
purchasing the product, and for things not sold by Amazon-- and
it says on the detail page,
50:49it'll tell you who the seller
is-- it's the seller's responsibility for those things,
and for us, it's very clear.
50:56It says Amazon.com whenever we
sell it. >> Do you audit your
sellers in terms of whether
51:01they're actually providing safe
products to your customers? >> We do...
51:07You know, some of our sales... So about, almost 60% of our
sales are by third parties,
51:13and those sales, some of them
come directly from the third party, so we're not involved
at all.
51:18>> But you take a cut. I mean, it's on your infrastructure, it goes through
Amazon.com, so, I mean...
51:24>> Well, it's on our
infrastructure in terms of the website and payments, but we're
not... >> And fees that, you
know, you're taking a cut of the
51:31sale, right? >> Sure, sure, and we're providing, you know, traffic
that, that...
51:36You know, it's kind of the way
they think about marketing is why they would pay that fee,
but...
51:41It's harder to, before an
experience, inspect that, that
51:48product. >> A South Carolina woman who bought a hair dryer on Amazon
said this happened.
51:53>> Fire is coming out of the
hair dryer. >> NARRATOR: Amazon's approach
has had consequences. >> A hoverboard caused a fire
that destroyed their home.
52:01>> NARRATOR: Dangerous products
were flagged by authorities in Washington State. >> ...found dozens of school supplies that had high levels
of toxic metals.
52:08>> NARRATOR: And a recent report
found thousands of banned, unsafe, or mislabeled products.
52:14>> I'm having a hard time understanding something, which
is that, that...
52:20You know, Amazon's entire brand
is about the customer, right? >> Yes.
52:25>> That it's... >> Oh, I reminded them of this
over and over again. >> You reminded them of
what?
52:31>> I said that no customer
wants to buy an unsafe product. No customer wants selection
that harms their child.
52:36No customer wants to buy
something that burns down their house because it looks cool and
it's the latest, coolest thing.
52:43>> Sitting here today,
are you able to basically say that the products that you sell
on Amazon.com are safe?
52:50>> What I can say is, we work
really hard to make sure that they're safe. We have...
52:56We've spent $400 million in the
last year on systems that seek
53:01out things that are not safe,
and, you know, there are millions of sellers and hundreds
of millions of products, and
53:08our 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
53:13vigilant as a retailer and as a
technology company, and we are definitely dedicated to, to
protecting the safety of our
53:20customers. >> NARRATOR: We heard that concern for the customer over
and over in our interviews with Amazon executives.
53:27>> Customer trust in a company like Amazon, it's sort of
foundational. >> Customer obsession is the
first leadership principle, and
53:34it, it's not a corporate slogan. >> We try to stay really focused on customers.
53:39>> Very focused on, on delivering results for our
customers. >> Providing a great customer
experience that customers want.
53:45>> Delivering that, that
customer delight. >> NARRATOR: This commitment to
the customer, and to keeping
53:51prices low, had another benefit:
it helped them avoid running afoul of regulators who enforce
the nation's antitrust laws.
54:00>> It's important to understand
sort of that there's two fundamental philosophies of
antitrust, of anti-monopoly law.
54:06You know, there's the
traditional philosophy, in which you, you want to break up all
potential concentrations of
54:13power that you can. But for the last 30 years,
54:18there's been this change in how
we do antitrust. And this is the idea that the
only purpose of antitrust should
54:25be to drive prices lower, to
serve the interest of the
54:31consumer. >> NARRATOR: Lynn had been urging regulators to take a more
traditional approach and
54:39examine whether the company was
gaining market power in exploitative ways: stifling fair
competition, but keeping prices
54:47low for consumers. >> We live in a society of consumers, though, and
seemingly there is some net
54:55benefit to all of us when
prices are low. So, what's wrong with that view
of things?
55:01>> It's obviously good for
people to... for all people if we can drive down prices, if we
have lower-priced drugs, if we
55:07have books that anybody could
buy. That's a good thing. It's a good thing for society,
55:12and it's a good thing for us as
consumers. But we're not only consumers,
we're also citizens.
55:19We're also producers. We're also people who think and who make things and who grow
things, and we want to have
55:27access to open markets. >> NARRATOR: Once again, the tension was most pronounced
with book publishers.
55:35Amazon was selling around 40%
of all new books in America and two-thirds of all electronic
books, thanks to the success of
55:42the Kindle. Then, one of the world's largest publishers, Hachette, decided to
push back.
55:50Franklin Foer was one of its
authors. >> Hachette and Amazon set out
to renegotiate their e-book
55:58contract. And Hachette said, "No, we don't accept the terms of your
contract."
56:03And Amazon basically said, "To
hell with you, Hachette. We're going to stop delivering
your books.
56:08If somebody searches for a
Hachette title, we're going to redirect them to another
publisher." >> Amazon's battle with Hachette
and the authors that Hachette
56:17publishes is heating up. >> NARRATOR: As Bezos's virtual blockade dragged on for months.
56:23>> A bitter, seven-month standoff... >> NARRATOR: Thousands of authors, including bestsellers
like Douglas Preston, were
56:30caught in the middle. >> Some authors were losing 50% to 90% of their sales from
Amazon.
56:37It was absolutely devastating
to first-time authors. It actually destroyed their
careers.
56:45>> Did you see your
sales plummet? >> I did, yes. I saw my sales plummet tremendously. >> NARRATOR: In frustration,
56:53Preston penned an open letter
on behalf of all authors. It was published in "The New
York Times" with more than 900
57:01signatures. >> We authors have loved Amazon. We have enthusiastically
supported it, and this is how
57:07they treat us? This is not right. >> Amazon has been accused of
doing everything from raising
57:13prices to deliberately delaying
shipments. >> Is this what happens when
Jeff Bezos decides to flex his muscles?
57:19>> NARRATOR: While Hachette and Amazon were at an impasse,
Douglas Preston, Franklin Foer, and other authors went to
Washington, and asked the Obama
57:28administration to open an
investigation. >> I went to the Justice
Department and I went to the
57:33Federal Trade Commission with
the Authors Guild, and we tried to explain to them why this
power was so dangerous.
57:41We pointed it out of all the
ways in which Amazon was bullying the publishing
industry.
57:46>> The Department of Justice
listened to us. And their answer was essentially
this: "Amazon is one of the most
57:55popular companies in the
country. (camera clicks)
They have brought tremendous
58:01services to consumers, and
they've brought lower prices." And that we hadn't given them
any kind of reason to open an
58:08antitrust investigation. >> NARRATOR: Eventually, Hachette and Amazon would
settle their dispute, with
58:15Amazon allowing Hachette to set
its own prices for e-books, but offering it incentives to keep
them low.
58:21>> It's great to be here at
Amazon. (crowd cheering)
>> NARRATOR: Amazon would thrive
58:29during the Obama years, and
eventually account for nearly 40% of all online commerce in
the country.
58:35>> Last year, during the busiest
day of the Christmas rush, customers around the world
ordered more than 300 items from
58:44Amazon every second. >> NARRATOR: But the complaints about its tactics would
continue, with retailers of all
58:51kinds concerned that Amazon had
become the online-shopping gatekeeper. >> You've got to be on Amazon.
58:58You have to be there, because
that's where everyone is. That... 100 million Prime
subscribers.
59:05They are the de facto e-commerce
channel in the United States, period, end of list.
59:11>> Amazon executives have told us that there are many
other options out there.
59:16There is Walmart, there is
Alibaba. As a seller, you've got options. >> I've heard that response from
59:24Amazon executives before, and we
did that, we were listed, we listed all of our products on
every other online marketplace.
59:32But it's a testament to just
how good Amazon is. All of the others that were
non-Amazon combined did about
59:41ten percent of what we were
doing on Amazon. >> NARRATOR: Businesses big and
small have been accumulating
59:48complaints about Amazon's hold
on them. >> On Amazon, the customer
belongs to Amazon-- it doesn't
59:54belong to the third-party
seller. You're basically renting the
Amazon customer. >> NARRATOR: James Thomson used
to recruit brands to come onto
1:00:01Amazon and now advises them on
how to do business with the company. >> I represent brands today that
1:00:08face a number of challenges with
Amazon. >> NARRATOR: Among those
challenges, businesses say that
1:00:14Amazon has access to their
valuable data, which gives it an unfair advantage. They also complain about
1:00:20increasingly higher fees to stay
on the platform, and pressure to use Amazon's warehouses and
shipping services.
1:00:30We spoke to numerous name-brand
companies, but none would share its grievances on camera.
1:00:36>> My account was suspended. >> NARRATOR: Some small
businesspeople have been talking about their
experiences-- good and bad--
1:00:42online. >> When you're selling on Amazon, you're playing in
someone else's playground. >> Who gets placed where,
whether or not your product
1:00:51shows up in the search
results... >> They suspended my account
without warning. >> These are all things that are
governed by Amazon's rules.
1:00:59And if there's a dispute within
that arena, if you feel you are mistreated, you know, the judge
and jury is Amazon.
1:01:05>> They don't care, they'll just
kill your account like that or suspend it... >> There are all sorts of crazy
1:01:11stories about why people get
their accounts shut down on Amazon. And it could take a week, it
1:01:16could 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
1:01:26any given moment. >> Selling on Amazon, take one. >> NARRATOR: Amazon said
third-party sellers account for
1:01:33more than half of everything
sold on the site. >> I sell mini-longboard
skateboards. >> I sell mineral water.
1:01:39This is what I do. >> NARRATOR: And it's
committed to its sellers' success-- proactively contacting
them when their accounts are at
1:01:45risk of suspension and offering
an appeals process to resolve disputes.
1:01:50>> You already have great products. Scale up... >> NARRATOR: But in the eyes of
some businesses, Amazon has
1:01:56essentially become like the
railroads at the turn of the last century that controlled
the flow of commerce across the
1:02:03country. >> Start selling today. >> Do you see yourself
as being kind of like the rails
1:02:08for e-commerce, that sellers
bring their goods to market on your rails, through your
marketplace?
1:02:14>> I don't think of it that way,
and here's why: the, the vast majority of stuff that's...
1:02:21Well, 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
1:02:28it. We're one percent of the retail sales in the world, about.
1:02:34>> Well, you are the biggest marketplace online,
right? >> No, so, again, I, I don't...
1:02:39The idea that there's an online, distinct for brands to sell
their stuff and distinct from
1:02:45physical, just doesn't make
sense to me, and we're far from the largest retailer.
1:02:51So, I, I describe this as retail, and we're competing
against Walmart and Target and
1:02:56Costco and Carrefour and Alibaba
and Tmall and all kinds of folks who are, are now selling both
physical stores and online.
1:03:05>> NARRATOR: In addition to
pointing to other large retailers, inside the company
employees have been
1:03:12schooled in how to talk about
its size and power. >> When I worked at Amazon, we
had training specifically on the
1:03:19use of terms like "monopoly." We were not allowed to use a term like "market share."
1:03:26Amazon has what's known as "market segment share." What is market segment? What is market segment share?
1:03:32I don't know, but I know that the lawyers at Amazon feel those
terms are, are much safer than
1:03:38using terms like market share. >> So market share was something they were really
concerned about. >> Clearly somebody with the
necessary legal training or PR
1:03:48training recognized that Amazon
was growing very quickly, and when we were asked to use the
term "market segment" and
1:03:56"market segment share," in
essence it's a polite way of saying, "I'm not going to talk
to you about how big we are."
1:04:03>> NARRATOR: Since leaving
Amazon 20 years ago, Shel Kaphan has been watching the
company with increasing
1:04:10concern, and he's speaking
about it for the first time. >> I think that the
characterization of Amazon as
1:04:17being a ruthless competitor is
true, and under the flag of
1:04:25customer obsession, they can do
a lot of things which might not be good for people who aren't
their customers.
1:04:31>> I know you're not a
legal scholar, but are you basically concerned that Amazon
is a monopoly?
1:04:37>> I'm, I'm concerned that it
has that type of power. I think it, you know, whether
you technically can call it a
1:04:43monopoly or not, I don't know.
1:04:49♪ ♪ >> NARRATOR: That question has
continued to loom over Amazon.
1:04:55>> I think that Amazon is
looking out, and the existential threat that they may face is
going to be from government.
1:05:03It's whether or not
policymakers are going to step in and intervene and say, "You
have too much power."
1:05:10>> NARRATOR: For years, Bezos
has been ramping up Amazon's profile in Washington.
1:05:17>> Amazon has been lobbying the F.A.A. to lift... >> Trying to cozy up to politicians, so that they will
give him the biggest tax breaks
1:05:24around... >> NARRATOR: Spending millions a year on lobbying. >> Amazon lobbied more government entities than any
other tech company.
1:05:30>> NARRATOR: And hiring as its
spokesman the former White House press secretary Jay Carney. >> You've got an army of
1:05:37lobbyists, many of whom have
revolved in and out of government, including yourself. What are you hoping to get for
1:05:43all that lobbying spend and all
that influence? >> One of the things we
discovered is, because of the
1:05:48visibility of our company, but
also the range of businesses that we're in, we need
subject-matter experts on food
1:05:54safety, on transportation, on
drones, on privacy.
1:05:59And also, we can be a resource,
an information provider to policymakers and regulators. It's not lobbying in the
1:06:06traditional sense, in terms of
trying to persuade somebody to do something, it's just
answering questions and, and providing data and information.
1:06:14>> NARRATOR: Bezos himself would also become a presence in the
capital, and eventually buy the
1:06:21largest private residence in
town. >> Jeff Bezos never really
showed much interest in
1:06:27politics, but as he's cemented
himself in the city, he's started to acquire this physical
presence.
1:06:33He bought a mansion, then
developed it into a place that is explicitly designed to be
social.
1:06:40>> 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
1:06:48hobnob with the people who make
decisions. >> NARRATOR: He'd even bought
the hometown newspaper...
1:06:54>> Jeff Bezos sent a thunderbolt
through the media world this week... >> NARRATOR: Spending a quarter of a billion dollars to rescue
the struggling "Washington
1:07:02Post." >> I do believe that democracy dies in darkness. I think that the capital city
1:07:07of the United States of America
needs a paper like "The Washington Post."
1:07:12>> I got to say, you know, full credit to him, he hasn't
intervened in any of the
1:07:18coverage of the paper. And he's invested in the paper. Every dollar of profit that the
paper makes is plowed back into
1:07:27making it a better paper. >> Bezos allowed the "Post" to
1:07:33hire, to restock its newsroom,
he reversed what had been an atmosphere of sort of decline.
1:07:38I'd say "The Washington Post" has really flourished under,
under Bezos's ownership. >> Let's cut this digital
ribbon.
1:07:45>> NARRATOR: At the time,
critics saw a more cynical motive. >> Perhaps he's buying "The
1:07:50Washington Post" to buy some
sort of protection. >> Precisely. >> This deal could give him more influence over politics.
1:07:57>> Nobody hangs out in Washington, DC, just to go to
the free museums.
1:08:04You buy a home in Washington,
you buy a newspaper in Washington, because it is the
most influential city in the
1:08:10world, and you want to lay your
hands on that power.
1:08:15♪ ♪
>> NARRATOR: Bezos saw a business opportunity there, as
well.
1:08:21The Obama administration planned
to modernize the federal government by embracing cloud
computing.
1:08:28Bezos had been quietly building
a revolutionary cloud computing business. He called it Amazon Web
1:08:35Services. >> It's basically computing power in the cloud, but really
it's Amazon's server farms
1:08:42around the world that give
people access to the kind of technology services they need.
1:08:48>> NARRATOR: To keep Amazon running, Bezos had developed an
unprecedented digital
1:08:53infrastructure. He realized he could rent parts of it out, not just to
businesses, but also to the
1:09:01government. >> Our infrastructure is built to satisfy the security
standards of the most
1:09:07risk-sensitive organizations. >> He's already got a huge edge over the other big competitors
in it.
1:09:13So he wants to take that lead
and capture the U.S. government. >> NARRATOR: In 2013, he got a
major boost when it was
1:09:23revealed that Amazon Web
Services had designed a computing cloud for the C.I.A.
1:09:30>> Amazon Web Services was awarded a ten-year contract for
$600 million. >> Amazon is helping the C.I.A.
build a secure cloud computer
1:09:37network... >> The C.I.A. contract was probably one of the best things
that happened to Amazon's cloud business.
1:09:43It lifted all doubts about the security of the cloud and on
whether you could trust Amazon
1:09:49with your most precious data. >> The message to the world is, "If the C.I.A. trusts Amazon
with its data, then maybe other
1:09:56companies and government
institutions can, as well." >> NARRATOR: And they did.
1:10:01>> Experience it with Expedia. >> NARRATOR: A.W.S. became by
far the world's leading cloud-computing platform.
1:10:07>> On CBS. >> NARRATOR: Today, more than a
million businesses, as well as
1:10:12PBS, pay Amazon to
store and manage their data. >> NARRATOR: Bezos had again
anticipated the next frontier in
1:10:20technology, and had made himself
indispensable to it. >> What Jeff Bezos is after is
really creating a company that
1:10:28is the infrastructure, that owns
the infrastructure for how commerce is done.
1:10:33And that's an incredibly powerful place to be. ♪ ♪ >> Please welcome chief
executive officer of Amazon Web
1:10:42Services Andy Jassy. >> NARRATOR: Andy Jassy created and runs A.W.S.
1:10:47He credits the service with making it easier to do business
and sparking innovation
1:10:52throughout the economy. >> Look at what A.W.S. has enabled with regard to change
in our society.
1:10:59Look at, Netflix changed the way
that we consume digital content, and Airbnb changed the way that
we get accommodations, and Hola
1:11:09and Grab and Lyft and Uber
changed the way that we get transportation. A.W.S. has enabled, has been a
1:11:15part of enabling all these huge
innovations and changes in
1:11:20consumer experiences that
have, have made life better for people. >> And we're the cloud with the
1:11:26most capabilities, the most
innovation, the most customers. >> NARRATOR: The division
generated $35 billion in sales
1:11:32last year. >> Amazon Web Services. >> Yes! >> Build On.
1:11:37>> NARRATOR: The success of
A.W.S. gave Bezos billions to expand Amazon from a company
that sells everything to a
1:11:45company that does everything. A top priority... >> To boldly go where no man has
gone before.
1:11:54>> NARRATOR: ...was to create
the sci-fi future he'd fallen in love with as a child.
1:12:01>> Gentlemen, this computer has an auditory sensor. It can, in effect, hear sounds.
1:12:07>> NARRATOR: A world of
artificial intelligence, in which computers can think and
make decisions for humans and
1:12:14about humans. >> Jeff Bezos is a big fan of "Star Trek." He, he admits that that was on
1:12:22his brain when he came up with
the idea that Amazon should be pursuing a little disk that you
can bark commands into.
1:12:31>> Stop. >> This is his "Beam me up, Scotty" fantasy realized.
1:12:37>> We started working on this device. And our, our vision was, in the
1:12:44long term, it would become the
Star Trek computer. >> When it first arrived from
Amazon, I didn't know what it
1:12:49was. >> NARRATOR: In 2014, Bezos's talking computer, the Amazon
Echo, hit the market.
1:12:55>> Is it for me? >> It's for everyone. >> NARRATOR: The voice known as
Alexa would embed Amazon deeper
1:13:01into the lives of millions of
people. >> Alexa, what do you do? >> I can play music, answer
1:13:08questions, get the news and
weather. >> They call it a personal
assistant, and just that term
1:13:14implies this intimate connection
that we then begin to develop with Amazon.
1:13:20>> Alexa, sing the ABC song. >> ♪ A, B, C, D, E, F...
1:13:26♪
>> I believe that when we think about the future and the future
with artificial intelligence,
1:13:32given where we currently are
today, Alexa in some ways represents the moment that it
becomes seamlessly interwoven
1:13:40with our lives. >> Alexa, how many teaspoons are in a tablespoon? >> One tablespoon equals three
1:13:46teaspoons. >> Oh, okay. >> And the problem is that we
forget that it's there.
1:13:52>> Alexa, lights on. >> Okay. >> NARRATOR: But Alexa is also
listening-- and she's learning.
1:13:59>> I'm answering questions and
learning more. >> NARRATOR: And that helps
Amazon in the race to dominate
1:14:05artificial intelligence. >> Alexa... >> Every time you ask Alexa
something, you're making the
1:14:10Alexa algorithm better. It's one of the reasons why Amazon, having had a head start,
is able to kind of preserve that
1:14:16head start, because they've got
the most data of anyone. >> Alexa is one more way for
Amazon to gather extremely
1:14:24valuable data. And this data collection is extremely important to this
business model. It's extremely hard to do, and,
you know, convincing people to
1:14:32just deploy something like this
in their home is a brilliant trick. >> NARRATOR: Dave Limp is
1:14:38Amazon's head of devices. >> How is it that you convinced tens of millions of
people to put what is
1:14:45essentially a, a listening
device in their homes? >> Well, I, I would first
disagree with the premise.
1:14:51It doesn't, it's not a
listening device. The, the device in its core
is...
1:14:57It has a detector on it. We call it internally a "wake-word engine." And that detector is
1:15:02listening-- not really
listening-- it's detecting one thing and one thing only, which
is the word you've said that you
1:15:09want to get the attention of
that Echo. >> NARRATOR: Once the device is
awake and the blue light is on,
1:15:16it's recording. And last year, it was revealed that Amazon employs thousands of
people around the world to
1:15:23listen and transcribe some of
those recordings to help train the system. >> Do you think that you
1:15:28did a good enough job of
disclosing that to consumers? That, that there are humans
involved in listening to these
1:15:35recordings? >> We, we try to articulate what we're doing with our products as
clearly as we can.
1:15:41But 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
1:15:51to annotate a small percentage
of the data, I would, for sure. What I would say, though, is
that once we realized that
1:15:57customers didn't clearly
understand this, and within a couple of days, we added an
opt-out feature, so that
1:16:02customers could turn off
annotation if they, if they so chose. And then within a month or two
1:16:09later, we allowed people to
auto-delete data, which they also asked for within that,
within that time frame. You know, we're not going to
always be perfect, but when we
1:16:16make mistakes, I think the key
is that we correct them very quickly on behalf of customers. >> NARRATOR: But even one of the
1:16:23founders of Amazon Web Services
approaches his Alexa devices with caution.
1:16:28>> When do you turn off your Alexa? >> I turn off my Alexa when I know for a fact that the
conversation that I am going to
1:16:36have, or, or whenever I just
want to have a private moment. I don't want certain
conversations to be heard by
1:16:44humans, conversations that I
know for a fact are not things that should not be shared, then
I actually turn off those
1:16:53particular listening devices. >> We have had an incredible
1:16:59year. The team has invented a lot on behalf of customers, and I
cannot wait to show you what we
1:17:04have. >> NARRATOR: So far, Limp and his team have made Alexa
compatible with more than 100,000 products.
1:17:11>> Echo Frames allow you to get done more around you and be more
present in the everyday.
1:17:17>> Now they're going to know
more about you than anyone knows. They're trying to move as
1:17:24intimately as possible and as
quietly as possible into everyday life.
1:17:31>> Echo Loop is a smart ring, packed with ways to stay on top
of your day.
1:17:37>> Amazon wants to have the
entire environment essentially miked.
1:17:43>> Alexa, start my running playlist. >> They want your walk in the park, they want your run down
the city street.
1:17:51>> Nationwide's teamed up with
Amazon to bring you the all-new Echo Auto. >> They want what you do in your
1:17:56car, they want what you do in
your home. >> Amazon Smart Oven. >> Alexa, bake for 30 minutes at
1:18:02350 degrees. (oven beeps) >> All these intimacies, all
this insight is being integrated, analyzed and
integrated.
1:18:11>> Alexa, alarm off. >> That is an extraordinary kind of power that has never before
existed.
1:18:19>> NARRATOR: After Alexa, Amazon
would go on to spend nearly a billion dollars to buy Ring...
1:18:25>> Hey, bud, the police are on the way. >> NARRATOR: A doorbell camera and app that Amazon describes as
"the new neighborhood watch."
1:18:32>> Hey, get away! >> Get out of there! >> NARRATOR: To promote it,
Amazon has enlisted the help of
1:18:38hundreds of local police
departments. >> It's a phenomenal tool to
assist detectives.
1:18:44>> NARRATOR: They give them
access to a portal to request footage and have given free
cameras to hand out-- and
1:18:52talking points. >> This system is so simple to use... >> You have Amazon in
1:18:57partnership with police
departments, who have basically turned policemen into, like,
Avon salespeople for Amazon
1:19:04Ring. They have given police departments talking points and
marketing materials to encourage
1:19:12the installation of Ring by
community residents. None of this was public
knowledge.
1:19:18>> And this is Ring's first
indoor cam.
1:19:25It is... cute, is what I would
say. >> NARRATOR: Amazon has
continued to expand the scope of Ring.
1:19:30Last fall, Dave Limp unveiled a version designed to monitor the
inside of people's homes.
1:19:36Within weeks, hackers discovered
a way to terrorize Ring customers.
1:19:56>> Did you see that video? >> I did see that video. >> What did you think of
it? >> I think that that is a
industry problem.
1:20:02It's not just about the, a Ring
camera-- it could be about anybody's cameras.
1:20:08It's about any device in that... And we've already investigated
that one to make sure what, what
1:20:14the 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.
1:20:20And we also want to build tools that give them the ability so
that doesn't... that, that makes it harder for those kinds of
attacks to happen.
1:20:27There's a lot of bad people in
this world. >> Here's a device that
you had described as cute and
1:20:32seems harmless, and I'm just
wondering whether you're being straight with people about the
attendant risks to your
1:20:41customers that you are obsessed
with, supposedly. >> Well, it's not supposedly, we
are obsessed with customers.
1:20:47I, I would say that we are
trying to build security features at every level of the
stack: operating systems,
1:20:56authentication, fraud detection. We offer things that customers can turn on that make it even,
make it even harder for those
1:21:04attacks to happen. >> Yo, what's up, how's your day? >> Who is that? >> What's going on, buddy?
1:21:09What are you watching? >> NARRATOR: There were a series
of similar attacks across the
1:21:15country. >> What's up, homie? I still see you. >> You hungry? >> What's going on, my main man
Shaq?
1:21:21>> NARRATOR: And it's not just
hackers. Ring has fired some of its own
employees for spying on
1:21:26customers. >> In George Orwell's "1984," he describes a dystopia
in which, "You had to live, you
1:21:33did live from habit that became
instinct in the assumption that every sound you made was
overheard."
1:21:40And I wonder if you ever think
about how easily this could become dystopian to some degree?
1:21:48>> 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
1:21:55would create that world. And so... but I am an optimist. I, I think if you take the, the
absolute view of that, we
1:22:04wouldn't invent anything. >> We're increasingly living in a world in which your
products and your designs are
1:22:11there. Do, can you see how it could be concerning in some ways that we
all can't opt out of that world
1:22:17at this point? >> Oh, sure, I can see why it could be concerning to some
customers. Our job in building that
technology is to build it in
1:22:26such a way that it, that it
takes into account for the scenarios that you just talked
about, as best as we possibly
1:22:32can. You know, the, the reality of it is, that world happened way
before Ring or Alexa.
1:22:42♪ ♪
>> NARRATOR: That's something that Bezos himself wrestled with
20 years ago.
1:22:49>> I believe that privacy is
going to be one of the prominent issues of the 21st century. The thing is, there are towns
1:22:55now in the United States that
have installed security cameras on every corner, and their
crime rates decreased by 80%,
1:23:00but do you really want cameras
on every corner? There are very strange things
that are going to happen over
1:23:06the next 100 years with respect
to technology that are going to challenge us as a society to
figure out how we want to deal
1:23:13with privacy. >> NARRATOR: Decades later, Bezos would be at the vanguard
of expanding the use of that
1:23:19kind of technology. >> Introducing Amazon Rekognition Video.
1:23:24>> Rekognition allows you to pass an image to us. You can say, "Do these two faces
1:23:29match?" Which is incredibly useful for applications in the security
space. You can imagine...
1:23:35>> NARRATOR: After Amazon rolled out a facial recognition tool,
it marketed it to law enforcement.
1:23:41>> Recognize and track persons of interest from a collection
of tens of millions of faces.
1:23:47>> NARRATOR: Police we've spoken
to say it's a valuable tool to identify suspects quickly.
1:23:52>> ...appears to be a match, but I'm gonna make sure I look at
them all. >> NARRATOR: And while Amazon
has offered guidelines for how
1:23:58it should be used, there are few
laws governing the use of this technology. >> It returns anybody with
1:24:03warrants that look like her. >> NARRATOR: Civil liberties advocates have raised concerns,
as have computer scientists, who
1:24:11worry Amazon has released the
software before it's ready, and that police are essentially
field-testing it on the public
1:24:18on behalf of the company. >> The tools are not what I call
1:24:23battle-tested. And we still do not understand how well they work in the
environments in which they'll be
1:24:31applied. That's where I see a danger. >> NARRATOR: Anima Anandkumar
was the principal scientist for
1:24:37artificial intelligence at
Amazon. In her first interview about her
concerns she told us she was
1:24:43particularly alarmed by an
M.I.T. study that found the software prone to mistakes with
darker-skinned faces.
1:24:52Amazon has questioned the
study's methodology. >> As a researcher in A.I., I
feel it's my personal
1:24:59responsibility to educate the
public of where A.I. truly is today, right?
1:25:04Because they hear so much of A.I. being hyped up, you know,
it's supposed to be magical,
1:25:09it's supposed to solve all the
world's problems. I see the potential in doing
that, but at the same time we
1:25:15need a reality check. We need to ask, where is A.I. today? What can it truly do well?
1:25:21>> And when it comes to
facial recognition, you don't think it's ready for primetime. >> I don't think face
1:25:26recognition is ready for
primetime in challenging applications like law
enforcement.
1:25:32>> NARRATOR: Anandkumar and
other scientists have asked Amazon to stop selling
Rekognition to law enforcement
1:25:39because they say the system's
accuracy is still in question, and there are no clear
regulations about how it's used.
1:25:47We asked Andy Jassy about it. >> I have a different view, and
1:25:52we've spent... We've had the facial recognition technology out for
use for over two-and-a-half
1:25:58years now. And in those two-and-a-half years, we've never had any
reported misuse of law enforcement using the facial
recognition technology and, you
1:26:06know, I think a lot of societal
good is already being done with facial recognition technology. Already, you've seen hundreds of
1:26:12missing kids reunited with their
parents, and hundreds of human trafficking victims saved, and
all kinds of security and
1:26:19identity and education uses, so
there's a lot of good that's been done with it. But I also understand that it
1:26:25could be misused. And 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
1:26:32use the technology have to be
responsible for it, and if they use it irresponsibly, they have
to be held accountable.
1:26:38>> There's been all
sorts of problems with policing in this country. So why allow police departments to experiment?
1:26:43>> We believe that governments and the organizations that are
charged with keeping our communities safe have to have
access to the most
1:26:51sophisticated, 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,
1:26:58we've never received any
complaints of misuse. Let's see if somehow they abuse
the technology.
1:27:04They haven't done that, and to
assume that they're gonna do it and therefore you shouldn't
allow them to have access to the
1:27:09most sophisticated technology
out there, doesn't feel like the right balance to me. >> It's been difficult to even know how many police
departments are using the facial
1:27:17recognition technology, and
there's no public auditing to know whether there are
complaints about abuse.
1:27:23How would the public ever know? >> You know, again, I don't think we know the total number
of police departments that are
1:27:31using facial recognition
technology. I mean, there's, you can use any
number-- we have 165 services in
1:27:39our technology infrastructure
platform, and you can use them in whatever conjunction, any
combination that you want.
1:27:44We know of some, and the vast
majority of those that are using it are using it according to the
guidance that we've prescribed.
1:27:52And 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.
1:28:01♪ ♪
>> NARRATOR: Andy Jassy and Jeff Bezos have said they want
governments to hurry up and
1:28:06regulate how law enforcement can
use facial recognition. But in the meantime, Amazon has
forged ahead, and has even
1:28:14discussed its services with
Immigration and Customs Enforcement. >> At Amazon Web Services...
1:28:19>> NARRATOR: And the U.S.
military. >> ...partner community to
deliver for our warfighters and
1:28:25defense leaders for when it
matters most. >> NARRATOR: Bezos himself has
made it clear that he sees
1:28:31Amazon playing a critical role
in national security, as well as in commerce.
1:28:36>> We are going to continue to support the D.O.D., and I think
we should. And if big tech companies are
gonna turn their back on the
1:28:44U.S. Department of Defense, this
country is gonna be in trouble. >> NARRATOR: As Amazon has
revolutionized one industry
1:28:51after another, Jeff Bezos's
reputation has grown to mythic proportions.
1:28:57>> You've called what Jeff Bezos has built a miracle. >> Absolute miracle. I wish I could give him a blood
test or something so I could
1:29:03pick it out, but... >> You want to clone him? >> No, I want a transfusion,
actually.
1:29:09>> Amazon is now worth $1
trillion... >> NARRATOR: His every move
moves the markets.
1:29:15>> Amazon Advertising is just on
fire. >> NARRATOR: Starting a digital
advertising business to rival
1:29:21Facebook and Google. >> Some breaking news on Whole Foods... >> Holy cow.
1:29:26>> Jim, I heard you gasp just
now. >> Holy cow, this is such a
game-changer. >> NARRATOR: Buying the grocery
chain Whole Foods.
1:29:31>> In a record-breaking deal,
Amazon is buying Whole Foods for $13.7 billion.
1:29:37>> The day the acquisition was announced, the nation's largest
grocery company lost billions of dollars because Amazon acquired
a company one-12th the size.
1:29:46>> Everybody thinks Bezos is the
smartest person in the world and he's gonna come and crush me. >> When Amazon announced the
1:29:51acquisition of Pill Pack... >> News of the deal sent shockwaves through an
industry... >> The retail pharmacy sector
shed billions of dollars.
1:29:58>> Look at this story-- three
titans of industry... >> When Amazon was mentioned in
a press release with Berkshire
1:30:05Hathaway and JP Morgan saying
they were looking at healthcare costs-- no detail in what that
meant... >> Healthcare companies are
panicked about Amazon's
1:30:11forthcoming entry into the
healthcare market. >> On the opening bell the
next morning, the healthcare industry's largest players shed
billions of dollars.
1:30:18>> And insurance stocks are down
after Amazon announced a healthcare partnership with
Berkshire Hathaway and JP Morgan
1:30:24Chase. >> Bezos basically wants to own the whole economy, right? >> You think he will.
1:30:29>> I kind of think he will. I kinda think that in, like, ten years Jeff Bezos owns every
single thing there is. >> So Amazon has these Darth
Vader-like abilities to just
1:30:36look at a sector and begin
choking it of oxygen without even touching it. Amazon can begin beating
1:30:42competitors without even
competing. >> You actually think
that Amazon is having a negative
1:30:48effect on competition in the
innovation economy right now? >> I think it's a mixed bag, I
think that you could argue, and
1:30:54there'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
1:31:00in 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:
1:31:09impossible." >> All right, let's move some earth. >> Every single area that he
1:31:14enters into, he manages to
succeed in a fairly major way.
1:31:20(crowd cheering)
>> We've had another great Prime Day. >> We've never seen anything
1:31:25like a company that is so
integrated into the fabric of
1:31:31existence, so, you know, at a
certain point, it becomes unavoidable. >> Amazon just yesterday said...
1:31:37>> Bezos would even extend his
reach into the heart of popular culture. >> Can you imagine Macy's
1:31:42starting a media company? We couldn't even imagine that. But Amazon does it, and people
take it seriously.
1:31:48(explosion echoes)
(people screaming) >> NARRATOR: Amazon is investing
billions in new shows and
1:31:54movies. >> Oh. Hi. >> Hey. >> NARRATOR: And on beefing up
its streaming service, which
1:32:01streams around four times as
many movies as Netflix, Major >> NARRATOR: And on beefing up
its streaming service, which
1:32:08streams four times as
many movies as Netflix, Major League Baseball, and PBS shows
like this one.
1:32:16(audience applauding)
>> And the Golden Globe goes to...
1:32:21"Transparent." Amazon Instant Video. >> I want to thank Amazon, Jeff Bezos. >> To Amazon, my new best...
1:32:27friend. (audience laughing) >> Bezos likes to joke about
how, every time he wins a Golden
1:32:35Globe...
>> ...it helps us sell more shoes. And it does that in a very direct way, because when
people... if you look at Prime
1:32:42members, they, they buy more on
Amazon than non-Prime members, and one of the reasons they do
that is, once they've paid their
1:32:49annual fee, they're looking
around to see, "How can I get more value out of the program?" >> They're trying to use this
1:32:55entertainment to get people into
the pipeline. >> Alexa, play "Jack Ryan" on
Fire TV.
1:33:01>> To keep them sitting within
this structure that is Amazon,
1:33:07where it becomes this unthinking
habit that's starting to pattern all these parts of our
existence.
1:33:13>> So you're doing the media
stuff to encourage people to use
1:33:19more of Prime. >> Correct. >> Amazon is represented at the
Academy Awards. Amazon is the first streaming
service nominated for Best
1:33:28Picture. >> He's like one of the old studio bosses right now. He really enjoys having this
1:33:35place in the industry and
really seems to relish being at
1:33:41the center of attention there. >> I also want you to know, Jeff, if you win tonight, you
can expect your Oscar to arrive
1:33:49in two to five business days...
(audience laughing) >> What you see now is someone
who is so supremely self-
1:33:59confident. A guy who has become a titan.
1:34:09♪ ♪
>> Amazon is about to get bigger. It's looking for another home in North America. >> NARRATOR: Bezos and Amazon's
1:34:15soaring stature would be on full
display in September 2017, when the company announced a contest
to find a location for a second
1:34:24headquarters. >> ...called HQ2. >> NARRATOR: They promised $5
billion in capital investments.
1:34:30>> $5 billion...
>> ...in local investment... >> NARRATOR: And 50,000 jobs. >> 50,000...
1:34:35>> 50,000 people. >> 50,000 high-paying jobs. >> Cities are salivating over
the opportunity.
1:34:40>> It was unprecedented because
the number of jobs was head-and- shoulders more than had ever
been offered in a deal before.
1:34:46This was a super-high-profile
auction by the most popular consumer company in the, in the
country.
1:34:53>> NARRATOR: The company invited
cities across North America to pitch themselves. >> How about, I don't know,
1:35:02here? >> NARRATOR: 238 took them up on it.
1:35:07>> I chose, Miami-- you should, too. >> Can't wait to see you, Amazon. >> I, Ebenezer Scrooge...
1:35:12>> NARRATOR: Some with
elaborately produced videos. >> ...I live in Atlanta. >> Amazon is demonstrating that it has the power to get
thousands of elected officials
1:35:20to remake their workday and bow
down before Amazon. >> I'm Mark Bound, mayor of the
city of Danbury.
1:35:28>> And offer it huge tax breaks. >> Georgia offered $2 billion. >> Maryland offered $5 billion.
1:35:34>> $7 billion from New Jersey. >> Huge infrastructure promises,
huge prime parcels of land.
1:35:40>> Philadelphia is offering the
most land-- 28 million square feet. >> They know that these places
1:35:46all don't have a prayer. >> So to those who saw it as a kind of grotesque
display of corporate power, to
1:35:54dangle 50,000 jobs and potential
billions of dollars of revenue over metropolitan cities around
the country, you say what?
1:36:02>> Look, I, I think, I used to
work for the United States
1:36:08government, like, we want
businesses to invest in the United States. States want businesses to invest in states, cities, city
officials want businesses to
1:36:14invest in cities. The proposals we got, the cities made the proposals, they wanted
us to come, and they presented
1:36:20to us why they were an
attractive option. ♪ ♪
>> NARRATOR: In November 2018,
1:36:28Amazon announced there were two
winners: Arlington, Virginia, and New York City.
1:36:35♪ ♪ >> 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
1:36:42it, offering up nearly $3
billion in subsidies and tax breaks.
1:36:47>> I'll change my name to "Amazon Cuomo" if that's what it
takes.
1:36:53>> NARRATOR: In return, Amazon
promised 25,000 jobs, billions of dollars in capital
investments, and a small number
1:37:01of projects earmarked for local
community members.
1:37:06>> I thought it could be a great
thing for New York. We are more and more of a tech
center, we wanted to consolidate
1:37:13that reality. Having Amazon here would have helped immensely. >> Amazon has got to go!
1:37:20>> NARRATOR: But not everyone
was enthused about giving billions in tax breaks to a
trillion-dollar corporation.
1:37:26>> Corporate handout! >> Get out! >> Alexandria Ocasio-Cortez says
the tax break isn't worth it.
1:37:33(gavel pounding)
>> Welcome to today's oversight hearing on the deal... >> NARRATOR: Though the deal had
1:37:38already been finalized, the New
York City Council insisted on a public hearing. It quickly turned contentious.
1:37:46>> Mr. Husman, you mentioned
that there are 5,000 employees that are currently working here
in New York City for Amazon, is
1:37:52that correct? >> Yes. >> NARRATOR: Council members
grilled Amazon executives on their position on unions, and
whether the company would
1:37:59pledge to remain neutral if
workers in New York State tried to unionize. >> How many of those employees
1:38:05are unionized? >> None, sir. >> None. Would you be okay with agreeing to neutrality so that workers
can unionize?
1:38:11>> No, sir, we respect... >> You wouldn't agree to that. >> Correct, sir, we would not. >> To go to a city council
1:38:17hearing, 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
1:38:24with this community and our
values, they did a horrible job. >> You are in a union city. And one of the first answers to
1:38:30your question today, is-- would
you be neutral?-- you said no. That is not a way to come to our
city.
1:38:37>> NARRATOR: It was not the
reaction the company expected when it launched the contest.
1:38:44Two weeks later, Amazon pulled out. >> Amazon is pulling the plug on
1:38:49its New York plans. >> We decided we didn't have to be there in that political
dynamic.
1:38:54The fact of the matter is, when
it turned out the governor and the mayor supporting something
turned out not to be enough to
1:39:02persuade other critics that it
was the right kind of investment for New York to make, we
decided, that's fine, we can go
1:39:10elsewhere. >> He said to us that it turned out that the governor and
the mayor supporting something
1:39:15wasn't enough to persuade other
critics that it was the right kind of investment for New York
to make. So we decided... we decided it's
fine, we'll go elsewhere.
1:39:23>> That's an idiotic statement
on its face. That is pure idiocy from a guy
who should know a hell of a lot
1:39:30better. The deal was done, Amazon knew it was done. There was noise, there was
1:39:36posturing by people in the
political world, but the deal was done, so all we're talking
about here is the background
1:39:42noise. In what world are there no critics? Well, yeah, in an autocratic
1:39:48totalitarian world, maybe
they're not allowed, and maybe that's the world that Jeff Bezos
somewhere in his mind thinks he
1:39:53is entitled to. ♪ ♪ >> NARRATOR: At the time, Bezos
was involved in some personal
1:40:02turmoil. >> Amazon C.E.O. Jeff Bezos and his wife of 25 years
announcing they are splitting.
1:40:08>> The announcement coming amid
tabloid reports that Bezos is now in a relationship with
former news anchor Lauren
1:40:15Sanchez. >> NARRATOR: The "National Enquirer" had been pursuing him
for months. >> The tabloid claims it tracked
him across five states and over
1:40:2340,000 miles. >> NARRATOR: Bezos saw the "Enquirer's" report as
politically motivated. >> So what would be the motive
here of getting that
1:40:30embarrassing material about
Bezos and his alleged affair to the "National Enquirer"? Who would want to get the dirt
1:40:35in the press? >> NARRATOR: The magazine's owner, David Pecker, was linked
to two powerful men who disliked
1:40:41how they were covered by Bezos's
"Washington Post." The first was President Trump.
1:40:47>> It's put there for the benefit of "The Washington
Post," of Amazon...
1:40:52>> NARRATOR: The second: Saudi
Crown Prince Mohammad bin Salman, who the C.I.A. had tied
to the murder of one of the
1:40:59"Post's" journalists, Jamal
Khashoggi. >> Former C.I.A. director John
Brennan said, "I have no doubt
1:41:06that Saudi Arabia would want to
embarrass Jeff Bezos and hurt
1:41:12him financially." >> NARRATOR: David Pecker demanded that Bezos publicly
declare the "Enquirer's"
1:41:19coverage was not politically
motivated or he'd publish intimate photos of him.
1:41:24>> Breaking news tonight, a stunner from the richest man in
the world. >> NARRATOR: Rather than give
in, Bezos fought back.
1:41:30>> Jeff Bezos calling out the
publisher of the "National Enquirer," David Pecker. >> Bezos published a personal
1:41:36account accusing the "National
Enquirer" of blackmail, of extortion. >> He turned the situation
1:41:42around and handled it so
brilliantly-- he was very transparent, he was very
courageous, admitted some very embarrassing things about
himself, didn't try to deny it--
1:41:48and positioned the other
individual as the bully, and kicked the bully in the nuts,
and somehow turned this into a
1:41:54net positive. I mean, this really was the PR strategy and execution of the
ages. I've never seen anything like
this.
1:42:01♪ ♪
>> NARRATOR: Publicly, Bezos has pushed ahead undaunted-- a
world-famous celebrity.
1:42:08And even after a $38 billion
divorce settlement, still the richest person on the planet.
1:42:15(cheers and applause) But the calls to rein in his
company are growing louder.
1:42:22>> Amazon reported $10 billion
in profits and paid zero in taxes.
1:42:28>> I will single out companies like Halliburton or Amazon that
pay nothing in taxes in our need to change that. >> Here's Bezos achieving this
1:42:35American dream and success. And, and he's now the target of,
1:42:40of all of this criticism. And basically, it becomes a symbol of all of his problems.
1:42:45>> Amazon is closing 30% of America's stores and malls and
paying... >> You're basically a piñata
dangling in front of any
1:42:52politician with a populist
message. Anyone who wants to talk about
wealth inequality, they're pointing their finger at you.
1:42:59>> This is why three people own more wealth than the bottom
half.
1:43:04>> If they want to talk about
problems with capitalism in general, they're pointing their
finger at you. >> We need to enforce our
antitrust laws, break up these
1:43:12giant companies. >> NARRATOR: And it's coming from all sides.
1:43:18>> President Trump just sent a chill down the spine of Jeff
Bezos... >> The president again teed off
against Amazon on Twitter.
1:43:26>> NARRATOR: President Trump has
made Bezos's ownership of "The Washington Post" a regular
target.
1:43:32>> "Washington Post," Bezos uses
that as his lobbyist, okay? >> He kind of assumed that "The
Washington Post" was operated in
1:43:39the sort of way that he would
operate a newspaper. And so he thought that Bezos was
dictating coverage to the
1:43:47"Post," which we should be
careful to say is not the case. >> NARRATOR: Trump has also
criticized Amazon, and accused
1:43:55the company of evading taxes. Last year, the company was
1:44:00competing for a $10 billion
cloud computing contract with the Department of Defense.
1:44:05>> This contract would have solidified Bezos's dominance in
cloud computing. This is a hugely important
thing.
1:44:12>> NARRATOR: But the company
claims President Trump intervened to scuttle the deal. >> And we're looking at it very
1:44:18seriously. It's a very big contract. One of the biggest ever given. >> A big win for Microsoft,
1:44:24beating out Amazon... >> Amazon can protest the outcome, especially given the
unusual, unprecedented comments
1:44:31by President Trump... >> It's an extraordinary times we live in that one of the
world's biggest corporations,
1:44:37Amazon, is now saying, "The
president of the United States has corrupted our ability to win
this contract."
1:44:42>> Is there any evidence
of that? >> The evidence is what the
president has publicly said.
1:44:48>> NARRATOR: And Amazon's
problems have continued to multiply.
1:44:54The Federal Trade Commission is now reconsidering its stance on
antitrust enforcement and is
1:45:00looking at Amazon-- as are
regulators in the E.U. >> This gatekeeper power and how
the platforms are exercising it
1:45:08is of tremendous concern. >> NARRATOR: In Washington, Democratic Congressman David
Cicilline has launched an
1:45:14antitrust investigation into
allegations of abusive conduct by Amazon and the other tech
giants.
1:45:22>> Given your experience, do you
agree with Amazon's statements suggesting that it seeks to act
in the best interest of
1:45:28independent sellers? >> I disagree with that. We get, I don't know, what I
might call bullying with a
1:45:33smile. >> We were able to get several C.E.Os. to come to a public
hearing. That required tremendous courage
because there's a real potential
1:45:43for economic retaliation for
their sharing that. >> We don't have the resources
to fight Amazon.
1:45:49We could use some help. >> In the course of your investigation thus far, and
you've had several public
1:45:55hearings, have you seen any
evidence of anti-competitive behavior by Amazon?
1:46:01>> Um, we have seen evidence of anti-competitive behavior by all
of the large platforms as a
1:46:07result of their market
dominance. But it sort of doesn't fall on
the companies to fix this problem.
1:46:12It falls on us. Without objection, the hearing
is adjourned. >> NARRATOR: Cicilline's
committee is considering
1:46:18everything from imposing limits
on what businesses a company like Amazon can engage in, to
restricting the collection and
1:46:25use of data. ♪ ♪
1:46:30The man who helped Jeff Bezos
build Amazon 25 years ago says it may be necessary to go even
further.
1:46:36>> On the one hand, I'm proud of
what it became, but it also
1:46:42scares me. And, um, I just feel like it's
1:46:47important for someone in my
situation to, you know, at least
1:46:56say what they think about what's
going on. >> This is sort of in
some ways a baby that you gave
1:47:01birth to, right? And so, I mean, you helped birth Amazon. >> Um, yeah, very much so.
1:47:07In fact, I used to, um, you
know, get up several times during the night to, just to see
if it was working and... and,
1:47:15you know, take care of it if it
wasn't, so... >> And when you look at
what Amazon has grown into
1:47:21today, you see what? >> (chuckles) Well, um... you know, you
don't want to see your
1:47:30offspring, um, become, um,
antisocial adults, right?
1:47:36So I think not all of the
effects of the company on the world are for the best and,
um...
1:47:44And, you know, I, I wish it
weren't so, and I... you know, and I... but I had something to
do with bringing it into
1:47:51existence, so, it's partly on
me. >> And, I mean, isn't... Isn't this just capitalism?
1:47:57Isn't this just a company doing
what a company does? >> Yes. Yes, it is, um, and I think
1:48:02they're doing what the business
schools teach people to do, and
1:48:07they're doing it aggressively
and skillfully and with great intelligence.
1:48:13And they will continue to do that unless they're constrained
by other forces in society.
1:48:19>> There are proposals
out there to break up Amazon. Is that something you'd promote,
the idea of breaking them up?
1:48:25>> Um, I think that they're now
at the scale where that could potentially make sense.
1:48:31>> How do you and Jeff and others at the senior
leadership level think about the call to break you guys up?
1:48:38>> We don't think about it very, very deeply. You know, I've been at Amazon now for 22-and-a-half years,
and I always remember one of
1:48:45the 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.
1:48:51He said, "I would not go to bed at night fearing your
competitors or fearing any external issues.
1:48:56I 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
1:49:01spend most of our time thinking
about. >> Well, I, I understand that
we're big, and that, that we
1:49:08deserve scrutiny, and I think
everything that's... that's large in the economy and in
society should deserve scrutiny.
1:49:15The problem is, when you think
about us, we're in a lot of verticals, yes. There's... there's video, and
1:49:20there's commerce, and there's,
you know, there's web services-- there are all these things. But in every one of them, we
1:49:28have intense competition, and I
do understand why, when you're in a lot of them, it can seem
like we're everywhere, but the
1:49:35global... If we were everywhere, that means we're talking about the
global economy, not just global retail-- it's so vast, we're
just, you know, we're a speck.
1:49:45>> To the public, it may
sound strange coming from Amazon, which is a company with
basically a trillion-dollar
1:49:51market cap, your C.E.O. is the
richest man in the world, but Jeff Wilke said to me that
you're kind of just a speck in
1:49:58the scheme of things. Do you see how that could seem strange or incongruous?
1:50:04>> You know, Amazon as a whole has become, you know, has been
successful, but simply because
1:50:10the company's been successful in
a few different business segments doesn't mean it's
somehow too big.
1:50:17♪ ♪
>> NARRATOR: As Jeff Bezos's company is coming under ever
greater scrutiny-- for
1:50:23everything from how it wields
power to even its impact on the environment-- he's continuing to
look beyond it all.
1:50:31>> We get to preserve this
unique gem of a planet which is
1:50:37completely irreplaceable. There is no plan B. We have to save this planet, and
we shouldn't give up a future
1:50:46for our grandchildren's
grandchildren of dynamism and growth. We can have both.
1:50:52Who is gonna do this work? (rocket rumbling) >> NARRATOR: He's spending a
billion dollars a year of his
1:51:00personal fortune on a space
exploration company he created. >> And it's this generation's
job to build that road to space,
1:51:10so that the future generations
can unleash their creativity. >> NARRATOR: For Bezos, it's
always been about one thing: his
1:51:19vision for the future. >> I want you to think about this. This vision sounds very big, and
1:51:26it is. None of this is easy, all of it is hard, but I want to inspire
you, and so think about this.
1:51:35Big things start small. (audience applauding) Thank you. (audience cheers and applauds) ♪ ♪
1:51:41>> Go to pbs.org/frontline for
extended excerpts of our interviews with top Amazon
executives and insiders, including employee number
one. >> On one hand I'm proud
of what it became, but it also scares me.
1:51:46>> And more on Amazon's use of facial recognition software. >> I think a lot of societal good is already being done with
facial recognition technology.
1:52:02>> Connect to the FRONTLINE
community on Facebook and
1:52:09Twitter, and watch anytime on
the PBS Video App, or
1:52:16pbs.org/frontline. Captioned by
Media Access Group at WGBH
1:52:23access.wgbh.org
>> For more on this and other "Frontline" programs, visit our
website at pbs.org/frontline.
1:52:40♪ ♪
To order FRONTLINE's, "Amazon Empire: The Rise and
Reign of Jeff Bezos", on DVD
1:52:45visit Shop PBS or call
1-800-PLAY-PBS. This program is also
available on Amazon Prime Video.
1:52:52♪ ♪