Amazoncovid En
Amazoncovid En
Amazoncovid En
& THE
COVID-19
CRISIS
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IRRESPONSIBLE
www.uniglobalunion.org
AMAZON & THE COVID-19 CRISIS:
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EXECUTIVE SUMMARY
Primed for rapid expansion before the pandemic, Amazon has ex-
ploited its dominant position in e-retail and web services during the
crisis to become an inescapable part of modern life in many markets.
Its political and economic influence has grown as quickly as its rev-
enues, and the company’s ascent raises fundamental questions about
how Amazon should be structured and regulated.
Amazon already controlled 50% of the U.S. e-commerce market,
but during the COVID-19 crisis, traffic on Amazon.com increased
by as much as 20%, while demand for some services, such as home
grocery delivery, soared by as much as 90% while brick and mor-
tar stores were temporarily shuttered in many countries. Many of
these traditional retail shops will not be able to afford a multi-month
closure and never re-open again, further reducing competition for
e-retailers.
But brick-and-mortar stores are not the only ones that suffered
while Amazon’s revenues increased. Third-party vendors using the
Amazon Marketplace platform were squeezed as well. Amazon tem-
porarily halted deliveries of third-party, non-essential products to
customers but continued to ship its own non-essential products.
This move hurt the two million authorized sellers who depend on
Amazon for access to markers, but who also compete directly with
the company’s products. Only sellers who had the infrastructure and
capacity to sell and deliver products outside the Amazon marketplace
were able to mitigate losses, but this category is a minority.
With much of our work,
school, and entertainment be-
With a strengthened position, and crisis in ing streamed at home, we are
the wider economy, Amazon is positioned to more reliant on Amazon Web
Services (AWS) that host ser-
make anti-competitive acquisitions at rock vices such as Zoom and Netflix.
bottom prices. At the end of 2019, AWS’s mar-
ket share in cloud services was
estimated at 33%, more than
the combined share of its three largest competitors, and its sales shot
up 33% in Q1 2020, signaling rapid growth to come. The company’s
market share is so large that one reporter said she could not “function
normally” by avoiding AWS. Just as Amazon.com, in many ways, has
become the e-commerce market, AWS has become the internet.
With a strengthened position, and crisis in the wider economy,
Amazon is positioned to make anti-competitive acquisitions at rock
bottom prices. It is already happening: Amazon’s purchase of a stake
in the online food-delivery company Deliveroo was approved on an
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i
DOMINANCE BEFORE THE CRISIS
ii
COVID-19 STRENGTHENED AMAZON’S
GRIP ON COMMERCE, ONLINE AND OFFLINE
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INCREASE IN SUPERMARKET AND ONLINE SALES IN FRANCE
AFTER THE CORONAVIRUS OUTBREAK DURING THE WEEK
OF 16 MARCH TO 22 OF MARCH, 2020, COMPARED TO THE
CORRESPONDING MONTH OF LAST YEAR
100%
90%
80% 74% 74%
62%
60%
40% 35%
18% 21%
20%
0%
ket ket l
rmar rmar Hard Urba
n Rura Drive Hom
e
Hype Supe co unts outle
ts
outle
ts
e l i very
dis d
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down all activities in France.17 After weeks of closure, the compa-
ny finally reached a deal with unions, but the company’s unilateral
stoppage affected not just workers and customers but merchants on
Amazon’s Marketplace platform.
Losing sales on Amazon
Marketplace even for a short
Losing sales on Amazon Marketplace even for period of time can be fatal for
many third-party sellers. For
a short period of time can be fatal for many example, Molson Hart, who
third-party sellers. sells toys on Amazon reports:
“Were we to be suspended from
selling on Amazon.com, it would
probably take three to six months before we’d be bankrupt. We are not
alone. This is typical for small to medium sized businesses which sell
online today. In fact, most companies like our own, would probably go
bust even faster.”18
Reportedly, more than half of Amazon sellers were affected by the
company’s decision to freeze Fulfilled by Amazon (FBA) shipments
during the COVID-19 crisis.19 While freezing FBA, Amazon has not
allowed third party sellers to remove their goods from Amazon ware-
houses, which means in practice “that storing inventory in FBA for
more than a month comes with fees rendering any future profit for a
seller impossible.”20
Only sellers who had the infrastructure and capacity to sell and
deliver products outside the Amazon marketplace were able mitigate
losses, but this category is a minority: many sellers reportedly make
at least 90% of their revenues via Amazon, which renders them par-
ticularly vulnerable.21 Some smaller sellers have already announced
layoffs of workers directly handling Amazon shipments.
Source: Canalys.com
Figure 3: AWS Market Share
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iii
TAX AVOIDANCE FEEDS EXPANSION,
LEAVES COMPETITORS AT A
DISADVANTAGE
30 Carrefour Walmart
15
0 30%
2013 2014 2015 2016 2017 2018 2019
25%
Amazon Microsoft Apple
20%
10%
Amazon is both a tech company and a giant
retailer. The average net profit margin of Ap- 5%
ple and Microsoft over the last six years was 0%
21.9% and 24.4% respectively, while Ama- 2013 2014 2015 2016 2017 2018 2019
zon managed a paltry 2.6%, more in line with Amazon Microsoft Apple
the profitability of a retail operation, such as
Carrefour Walmart
Walmart (2.7%). During the period 2014-
2016, Amazon generated less net income Figure 6: Amazon tax over time vs. others
($2.8 billion) than the French hypermarket
chain Carrefour ($3.4 billion). Only in 2018
and 2019 Amazon has reached a net profit
margin of slightly more than 4%, but it is still
lagging far behind its tech competition.
14 AMAZON & THE COVID-19 CRISIS
During the last six years, Amazon paid
only $7.8 billion in US federal income
taxes, which is 11 times less than Apple
has paid during the same time and 4.4
times less than Microsoft or Walmart paid
(See Figure 5). In fact, Amazon paid only
slightly more than the double the income
taxes paid by Carrefour, although the fi-
nancial markets value Amazon almost 37
times higher than the French retailer (See
Figure 6).27
Internationally, the company has been
sued for illegal tax benefits it has received
in Luxembourg. In 2017, the company
was fined €250 million, plus interest,
which covered unpaid taxes for eight years.28 Since that decision from
the European Commission, little has changed in terms of Amazon’s
fiscal conduct in Europe: the company continued to report losses
and gather tax credits. In 2018, Amazon Europe made a pre-tax loss
of €493 million and its loss more than doubled in 2019, to €983
million. As a result, Amazon Europe received tax credits of more
than half a billion euros in the last two years (€241 million in 2018
and €294 million in 2019).29 Amazon has also been involved in tax
disputes in France, where it settled a €200 million dispute, and in
Italy,30 where it agreed to pay €100 million.
40
30
20
10
0
Apple Microsoft Walmart Amazon Carrefour
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iv
AMAZON’S WORKERS ARE EXPOSED
TO HIGH RISKS AND THE COMPANY’S
EFFORTS ARE INSUFFICIENT
With the flood of orders coming in during The hazard pay of USD/EUR/GBP 2 per
the lockdown, Amazon had two challenges: it hour provided to Amazon’s ‘eligible’ employ-
needed an increased workforce in order to re- ees during the coronavirus crisis is in line with
spond to increased demand while at the same similar hazard pay provided by other com-
time ensuring an adequate level of protection panies such as Albertsons, Target, Walmart,
for its workers. Krogers or Safeway – and did little to comfort
Amazon was already one of the largest pri- the workforce.37 Without available paid time
vate employers in the world—and that was off, many workers had to risk their health and
before it hired 100,000 workers in March even their lives in order to feed their fami-
and announced the hiring of another 75,000 lies.38
workers in April.32 As the number of COVID-19 cases in Am-
Tensions in the warehouses quickly esca- azon warehouses mounted, Amazon employ-
lated. Amazon reported implementing some ees walked out of their facilities in Queens,
measures such as using thermal cameras,33 NY,39 Chicago, IL40 and Detroit, MI.41 Work-
providing protective equipment and promot- ers in Detroit protested Amazon’s continued
ing social distancing in the warehouses,34 al- shipment of non-essential items that increase
lowing white-collar employees to work from workloads and reduce the ability to imple-
home35, and ensuring that all employees diag- ment social distancing.42 Grocery workers at
nosed with COVID-19 or placed into quar- Amazon’s Whole Foods Market subsidiary
antine will be eligible to receive up to two- have also engaged in work stoppages.43
weeks of paid leave in the U.S.36 Amazon reportedly fired at least six employ-
ees that have been vocal against the company’s
policies during the pandemic
in the U.S., and several other
workers have reported facing
disciplinary write-ups from
Amazon after protesting.44
On 4 May, one of Amazon’s
top engineers, Vice-President
Tim Bray resigned in protest
and penned a public letter to
Amazon condemning its be-
haviour.45
As the virus spread, Ama-
zon’s labour relations and its
health and safety performance
attracted the attention of
public authorities. One group
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Madrid, a labor ministry team carried out a ing emergency procedures to protect workers
10-hour inspection and ordered Amazon to and contractors, but Amazon did not reply.
correct deficiencies within two days.61 Those “Amazon refuses to recognize trade unions and
measures included accommodating physical they will not communicate with us,” he said.65
distance between workers, disinfecting facil- UNI Global Union’s Amazon Alliance of
ities where workers have been diagnosed with trade unions in 22 countries has called on the
COVID-19, providing personal protective company to give its workers unlimited paid
equipment, and providing daily updates on time off, necessary PPE, handwashing breaks,
confirmed and presumed cases.62 63 and required space for social distancing. The
In the UK, GMB Union representatives re- Alliance has also noted that the “crisis can be
ported that workers at various Amazon fulfil- opportunity for Amazon to learn that social di-
ment centres worked in crowds of 200-300 alogue and collective bargaining are vital tools
people and had to reuse equipment without that modern societies and companies use to pro-
available hand sanitizer.64 The national office tect workers’ health and save people’s lives.”66
of the GMB Union wrote to Amazon request-
v
WILL WE LET AMAZON SHAPE
A POST COVID-19 WORLD?
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WORKERS AND COMMUNITIES NEED TO BE AT
THE CENTER OF THE RECOVERY
The COVID-19 crisis is radically reshaping our world, and one of
its unfortunate side effects is the acceleration of Amazon’s domina-
tion of our markets and, frankly, many aspects of our lives—how we
work, how we consume entertainment, how we communicate.
So far, the company has not used its power as a force for social
good—it has avoided taxes, squeezed small and medium sized busi-
nesses, dragged down labour conditions.
While many organizations are suffering during the pandemic, for
Amazon, it presents an opportunity for higher revenues, cash flows,
budgets for research and development and probably profits, as well
as an expedited entry into health care. As the crisis spreads across our
economy, cash-rich Amazon is well positioned to make acquisitions
at bargain basement prices or other investments that further consoli-
date its power. The example of Deliveroo, given regulatory clearance,
and reported interest AMC, J.C. Penny and Future Retail Group
show the potential for Amazon to seize the opportunities created in
the pandemic.
Regulators are already looking at the company’s growth, but more
scrutiny is needed as no company should have this much influence.
The latest developments show positive signs in this respect: the
European Commission has launched an investigation on the Am-
azon Marketplace last year, the Competition Commission of India
has ordered a probe for alleged violations of competition law, while
in U.S. lawyers have filed complaints against Amazon’s dominant
position in e-commerce and the US Congress has called on the US
Department of Justice to Open a criminal investigation into Ama-
zon and for Bezos to testify under oath in
Congress.78
Regulatory pressure on Amazon should
not be limited to competition matters. It
is important that governments provide
adequate financing to public healthcare
and education systems and for this pur-
pose they should impose stricter rules on
taxation to collect a fair share from the
tech giants’ revenues and incomes.
Simply put, just as our world will rad-
ically change after the pandemic, so will
Amazon. But the question of whether
the company’s stranglehold on our mar-
kets and communities will tighten will be
answered by the resistance of regulators,
community organizations, labour unions,
and anti-monopoly activists.
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31 Silicon Six and their USD 100 billion global tax gap, Fair Amazon fired a worker who led an employee walkout at a
Tax Mark, December 2019, https://fairtaxmark.net/wp-con- fulfillment center in Staten Island, NY to demand a tem-
tent/uploads/2019/12/Silicon-Six-Report-5-12-19.pdf porary closure of the facility for cleaning after a coworker
32 John Koetsier, Amazon Hired 100,000 People was diagnosed with COVID-19. The worker was fired for
Last Month. Now It’s Hiring Another 75,000, Forbes, allegedly violating the company’s quarantine rules after
13 April 2020, Availible at: https://www.forbes. having come into contact with a sick employee. The New
com/sites/johnkoetsier/2020/04/13/amazon-hired- York State Attorney General said in a statement, “it is dis-
100000-people-last-month-now-its-hiring-another- graceful that Amazon would terminate an employee who
75000/#3023396a9db4 bravely stood up to protect himself and his colleagues,”
33 “Coronavirus: Amazon using thermal cameras to and she called on the National Labor Relations Board to
detect Covid-19”, BBC News, 20 April 2020, Available at: investigate the firing. The New York City Mayor ordered
https://www.bbc.com/news/technology-52356177 the city’s Human Rights Commission to launch a civil
34 “Amazon’s COVID-19 blog: daily updates on how we’re investigation.
responding to the crisis,” Amazon.com, April 9, 2020, 45 Tim Bray, Leaving Amazon, availible at: https://www.tbray.
https://blog.aboutamazon.com/company-news/ama- org/ongoing/When/202x/2020/04/29/Leaving-Amazon
zons-actions-to-help-employees-communities-and-cus- 46 U.S. Senator Cory Booker, et al., Letter to Jeff Bezos,
tomers-affected-by-covid-19 CEO of Amazon.com, March 20, 2020, https://www.book-
35 Annie Palmer, “Amazon tells all employees to work er.senate.gov/?p=press_release&id=1091.
from home if they can,” CNBC, March 12, 2020, https:// “Study reveals how long COVID-19 remains infec-
www.cnbc.com/2020/03/12/amazon-tells-all-employees- tious on cardboard, metal and plastic,” Science Daily,
to-stay-home-amid-coronavirus-fears.html. March 20,2020, https://www.sciencedaily.com/releas-
36 Beth Galetti, “COVID-19 Update: More Ways Amazon es/2020/03/200320192755.htm.
is Supporting Employees and Contractors,” Amazon.com, 47 Will Evans, “Ruthless Quotas at Amazon Are Maim-
Inc. Day One Blog, March 11, 2020, https://blog.aboutam- ing Employees,” The Atlantic, December 5, 2019, https://
azon.com/working-at-amazon/covid-19-update-more- www.theatlantic.com/technology/archive/2019/11/am-
ways-amazon-is-supporting-employees-and-contractors azon-warehouse-reports-show-worker-injuries/602530/.
37 Catherine Thorbecke, “What to know about hazard See also “Packaging Pain: Workplace Injuries in Amazon’s
pay if you’re working during coronavirus crisis,” ABC Empire,” The Awood Center, Make the Road New Jersey,
News, 4 April 2020, availible at: https://abcnews.go.com/ Make the Road New York, National Employment Law
Business/hazard-pay-working-coronavirus-crisis/sto- Project, New York Communities for Change, United for Re-
ry?id=69934888 spect, Warehouse Workers for Justice, Warehouse Worker
38 Devin Coldewey, “Amazon warehouse workers Resource Center, December 2019, https://www.amazon-
organized to demand PTO, and coronavirus clinched packagingpain.org/the-report.
it”, Techcrunch, 24 March 2020, https://techcrunch. 48 https://comptroller.nyc.gov/newsroom/comp-
com/2020/03/24/amazon-warehouse-workers-orga- troller-stringer-nyc-funds-and-apg-urge-transparen-
nized-to-demand-pto-and-coronavirus-clinched-it cy-from-amazons-independent-directors-regarding-em-
39 David Lee and Patricia Nilsson, “Amazon Workers ployee-health-and-safety-initiatives-amid-covid-19-pan-
Protest Over Normal Shifts Amid Covid-19 Cases,” Finan- demic/
cial Times, March 19, 2020, https://www.ft.com/con- 49 Steve Kovach, Op-Ed: Amazon, it’s time to disclose
tent/08395e49-0bb1-4f49-a6f5-c6639ce3d719. your coronavirus deaths, CNBC, 16 May, 2020, availible
40 Caroline O’Donovan, “As More Amazon Employees at: https://www.cnbc.com/2020/05/16/op-ed-ama-
Contract The Coronavirus, Workers Are Walking Off The zon-should-disclose-coronavirus-deaths.html
Job,” BuzzFeed News, March 31, 2020, https://www.buzz- 50 Amazon endangers workers, delivers contagion, reaps
feednews.com/article/carolineodonovan/amazon-em- the profit, Special Report: April, 2020, http://hedgeclip-
ployees-coronavirus-walkout. pers.org/wp-content/uploads/2020/04/AmazonWorker-
41 Sarah Rahal, “Amazon Workers Stage Walkout at sCoronavirus_FD2.pdf
Romulus Warehouse During Covid-19 Crisis,” Detroit 51 Melissa Heikkilä, “‘This is crazy:’ Rage boils over at
News, April 1, 2020, https://www.detroitnews.com/story/ Amazon sites over coronavirus risks,” Politico, March 20,
news/local/wayne-county/2020/04/01/amazon-workers- 2020, https://www.politico.eu/article/coronavirus-ama-
stage-walkout-romulus-warehouse-during-covid-19-cri- zon-employees-rage/.
sis/5103152002/. 52 Isobel Asher Hamilton and Ruqayyah Moynihan,
42 Kim Russell, “Romulus Amazon Employees Protest “Amazon warehouse workers in Italy are striking in out-
Work Conditions as Covid-19 Spreads,” WXYZ ABC 7 rage at the firm’s response to 2 staff contracting corona-
Detroit, April 1, 2020, https://www.wxyz.com/news/coro- virus,” Business Insider, March 17, 2020, https://www.
navirus/romulus-amazon-employees-protest-work-condi- businessinsider.com/amazon-workers-strike-coronavi-
tions-as-covid-19-spreads. rus-2020-3?r=US&IR=T.
43 Mike Snider, “‘US grocery store workers need to be 53 Francesca Landini, “Workers go on strike at Amazon
fairly compensated.’ Protests at Amazon, Whole Foods delivery site in Italy amid coronavirus,” Reuters, March 30,
begin,” USA Today, March 31, 2020, https://www.usato- 2020, https://www.reuters.com/article/us-health-corona-
day.com/story/money/business/2020/03/31/coronavi- virus-italy-amazon/workers-go-on-strike-at-amazon-de-
rus-workplace-conditions-spur-protests-whole-foods-am- livery-site-in-italy-amid-coronavirus-idUSKBN21H3AN.
azon/5093570002/. 54 Patricia Nilsson and Dave Lee, “Amazon Auditions to
44 Michael Sainato, Amazon is cracking down on pro- Be ‘the New Red Cross’ in Covid-19 Crisis,” Financial Times,
testers and organizing, workers say, The Guardian, 05 March 31, 2020, https://www.ft.com/content/220bf850-
May 2020, available at: https://www.theguardian.com/ 726c-11ea-ad98-044200cb277f.
technology/2020/may/05/amazon-protests-union-orga- 55 Caroline Pailliez and Mourad Guichard, “France says
nizing-cracking-down-workers pressure on Amazon workers ‚unacceptable’ amid lock-
ESSENTIALLY IRRESPONSIBLE 23
www.uniglobalunion.org
AMAZON
& THE
COVID-19
CRISIS
ESSENTIALLY
IRRESPONSIBLE