Challenging Amazon report - the ‘Everything Store’?

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Introduction

Amazon is a global giant. It is also known for the multiple ways in which its business model abuses workers’ rights, is actively anti-union, minimises its tax contributions, and leverages its position to stifle competition and dodge scrutiny. As unions, our priority is ensuring workers’ rights are guaranteed and that the future of work is rooted in the protection and dignity of working people and the institutions and communities they rely upon. Amazon provides a vital case study regarding the unchecked power of global corporations, particularly the digital giants, and the impact and challenges that poses for workers, communities and public institutions.

The ’Everything Store’

Established in 1994, Amazon began life in owner Geoff Bezos’ garage as an online bookstore, but soon diversified into a wider range of products and activities to become the retail and tech behemoth we know today, with an ever expanding reach into areas beyond its more commonly recognised shopping and Prime entertainment services.

Amazon is worth an estimated $1 trillion (£810 billion), directly employs over 850,000 workers globally and ships to over 100 countries. It has expanded its portfolio into tech development by establishing Amazon Robotics, data through Amazon Web Services, and procurement through Amazon Business (similar to Amazon retail but for businesses and other organisations including local government and education institutions).[1]

A desire to be the ‘Everything Store’, felt more keenly in the US, has also seen it build a stake in the food market through AmazonFresh and in grocery stores having acquired Whole Foods.[2] It is also reportedly looking to expand into healthcare, having bought US online Pharmacy company PillPack for $1 billion in 2018 and recently launched Amazon Care for its Seattle employees, touted as a trial run for expansion into the US healthcare market.[3]

This year in the UK, amid financial difficulties exacerbated by the Covid-19 pandemic, the company was also able to acquire a significant stake in takeaway delivery service Deliveroo[4] and was asked by the government to be one of the partners supplying coronavirus home testing kits.[5] Recent news reports suggest they could also be in the running for a lucrative outsourcing contract for the test and trace system [6] - suggesting they are looking to mirror their US expansion into just about everything.

Amazon’s growth has been rapid. In 2019 it overtook Apple and Google to become the world’s most valuable brand[7]; overtook Walmart as the world’s largest retailer[8] and hit the top 25 for the world’s largest public companies[9].

Reports for 2020 also suggest that no company has prospered more during the Covid-19 pandemic[10] - registering US $75 billion dollars (£58 billion) in revenue for the first quarter (equivalent to £25 million an hour), driven by a surge in online sales and its cloud hosting Amazon Web Services[11]. Their second quarter performance showed no signs of slowing down, generating $88.9 billion (£68 billion), up 40 per cent on Q2 2019, doubling their net profit to $5.2 billion (almost £4 billion) versus a year ago[12]. In just one day during the pandemic, Jeff Bezos increased his fortune by US $13 billion (approximately £10 billion), keeping him well on track to become the world’s first trillionaire by 2026[13] .

While Amazon’s rise to global dominance has been meteoric, it has also been largely unchecked, leaving the company open to increasing criticisms on multiple fronts. From its poor record on employment rights and health and safety, to tax minimisation, data privacy and its extractive and environmentally damaging business model – it is clear the scope and impact of Amazon reaches far beyond its ‘Everything Store’ front.

The rise and entrenchment of online retailing and services has brought many changes and some challenges. But it is the way Amazon operates, its business model and poor employment practices, and its lack of accountability that has seen trade unions become increasingly worried about their dominance. Its ever-expanding scale is mirrored by its increasing power and influence both in terms of its market dominance and the potential it has to influence governments and policy. Combined, this allows Amazon to cultivate an unfair competitive advantage that enables them to avoid scrutiny and accountability, with devastating consequences for workers and their families, our communities, our high streets and even democracy itself.

Amazon – the ‘Everything Store’?

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