Digital services: time for the EU to act on Amazon

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

The Amazon logo is pictured outside the company's logistic and distribution center in Werne, Germany, 22 November 2018 [EPA-EFE/FRIEDEMANN VOGEL]

Last week’s revelations of how Amazon has ramped up its surveillance of workers are yet another reminder that working people need the EU to step up, writes Oliver Roethig.

Oliver Roethig is the regional secretary of UNI Europa, representing more than seven million service sector workers across Europe, including in Amazon.

The world learned that Amazon was hiring intelligence analysts to spy on unions. While the positions were designed to deal with Amazon workers, these were no ordinary HR jobs. Experience in the “intelligence community, the military, law enforcement” were among the qualifications sought.

The fact that fluency in French and Spanish was also in the list of desirables shows this is not a problem limited to the USA.

Not content with prospective spying, it was revealed the following day that Amazon already spies on private Facebook groups run by its workers, including those in the UK and Spain. Why all the snooping?

Since its founding, Amazon has aggressively pushed to undermine workers’ efforts to negotiate better conditions. In a resolute sign of its brazen embrace of this mirky approach, Amazon has since named former commander of US Cyber Command to its board of directors.

What Amazon described as the “labour threats” in its job posting, are in fact a core part of the European social model. Collective bargaining, ensuring workers have a say over decisions that shape their everyday lives, is fundamental to countering the inequalities that are growing across Europe.

However, Amazon is intent on imposing its conflictual labour model and dismantling the European approach that has for so long delivered more egalitarian, fair and just societies.

The question is, will legislators continue to allow the corporation run by the richest person on the planet get away with extracting huge wealth from some of the poorest and most precarious workers on the continent with impunity?

Funnel-shaped playing field

Amazon’s undercutting on workers’ rights is part of a package of subversive tactics. As well as dragging down labour conditions it has avoided taxes, squeezed small and medium-sized businesses (as well as global logistics companies) and dumped prices.

We hear a lot about the level playing field needed for fair competition, instead, Amazon is creating a funnel-shaped market in which it collects an increasingly large ransom on all sales.

At the root of it is Amazon’s reliance on unfair competition. It uses killer acquisitions to buy out competitors and take over their market share. While Amazon is a marketplace, it is also a seller and it uses its data and algorithms to favour its own products.

It uses its revenue, notably in its cloud computing business AWS, to cross-subsidise its operations in retail and aggressively undercut competitors. We’ve identified 19 tactics like these that Amazon applies to undermine fair and socially responsible competition.

These tactics spell out serious exploitation of market power and underlying structural problems with the current competition approach. Increasingly, all players along the e-commerce value chain are dependent on the mercy of Amazon.

In their efforts to keep up with Amazon’s unfair competition, there is evidence that these players are increasingly left without any choice but to reduce overall working conditions and suppress wages.

The bottom line is that Amazon’s unchecked growth is a vicious circle which makes life more difficult for working people while benefitting only a few. Such developments warrant immediate regulatory intervention.

Digital Services Act: time to push back

That’s why UNI has put forward a set of six key interventions to be included in the EU’s upcoming Digital Services Act. The first three are targeted at addressing the specific problems associated with Amazon.

Firstly, the call for a structural separation of different business divisions has been growing louder and uniting ever more actors. It is a necessary step to increase transparency, disincentivise self-preferencing and prevent unfair cross-subsidisation.

Given its track record, we also make the case for a rigorous monitoring and prevention effort to snuff out the exploitation of dependent sellers and ban AI-based predatory pricing. This would be aimed at stopping Amazon from requiring the procurement of extra services or other benefits as a condition for effectively accessing the marketplace.

As to measures aimed at ensuring that another Amazon does not appear further down the line, we propose to identify and regulate online platforms with significant market power, also known as “SMPs”.

Fundamentally, we are calling for the markets to be genuine markets and products to be genuine products. This would have stopped the insidious takeover by Amazon that has to lead to such an undermining of workers’ conditions.

Finally, and perhaps most importantly, we argue that the European Commission must take workers’ rights into account. It has until now been obsessed with the impact on prices. Yet, prices do not come out of nowhere. It is working people that make all this possible.

When it comes to food, the Commission embraces a “farm to fork” strategy. Why then, when it comes to working people does it remain obstinately focussed on the final effect on prices, as if working people were a part of the equation that was worth erasing?

There are signs that this dogmatic approach is changing. With the Digital Services Act, the EU must reclaim control for the sake of both working people and European companies. We are determined to help the Commission get it right this time.

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