Amazon Empire: The Rise and Reign of Jeff Bezos (full film) | FRONTLINEFeb 27, 2020
I would call distribution centers and they would create hundreds of thousands of jobs in places hard hit by the Great Recession. TenBig companies are loved. That there is something that bothers us when we talk about very large companies. "Rudeness isn't cool. Beating little guys isn't cool. Taking risks is cool. Winning is cool. Courtesy is cool. Beating the bigger, unsympathetic guys is cool. Inventing is cool. Scouts are cool. Pathfinders aren't cool." Some companies, you can tell when you walk in and have meetings with them, they have a conqueror mentality. And there is a big difference between being a conqueror and being an explorer.
And I think in this very inventive space that we're in, it's worth exploring. ♪ ♪ NARRATOR: But to some watching Amazon's growth, the company fell short of that ideal and took steps to make sure nothing got in the way. ♪ ♪ In 2013, Amazon was moving to create its own delivery system and made a key decision: Instead of hiring its own drivers, it created a network of independent businesses to deliver packages. They weren't going to play here and there. They were going to create a system that would rival FedEx or UPS. NARRATOR: Patricia Callahan, a reporter for ProPublica, along with Buzzfeed, has investigated the system that Amazon installed.
They found a way to circumvent regulation. The cargo vans they choose are big enough to carry hundreds of Amazon packages, but small enough to be unregulated by the federal government. An 84-year-old woman struck and killed by an Amazon delivery truck. Woman hit and killed in a parking lot. NARRATOR: ProPublica and Buzzfeed have found that drivers are under intense pressure to deliver packages. After hitting him, the truck maneuvered around Salinas and her dog. NARRATOR: And they documented more than 60 accidents, including 13 deaths, since 2015. A baby seriously injured in a car crash has died. When it came time to find out who was responsible, Amazon would always say, "he's a contractor, it's not our responsibility." Now you've been able to find 13 kills.
And that's over the course of several years. Is that statistically significant given all the packages they deliver on a given day or in a given year? I'm not claiming that there are only 13 deaths and that I found each and every one. I just found enough to show that this is happening across the country. With UPS, there is a record. There is a federal registry where you can see how many serious injuries and fatalities they have. With Amazon, that doesn't exist. No one knows the security logs of all Amazon contractors. NARRATOR: Amazon disputed the ProPublica report. It wouldn't release any data on crashes involving its network of drivers, but told us it had a "better than average" safety record and that nothing is more important to them than safety.
Any accident is one accident too many, as we focus on safety in fulfillment centers and product safety, we're -- we set very high standards with all of those partners for safe performance. We have training videos for the third parties that work with us to help them understand what we expect in terms of driving, we have mapping software that we use to help them find the right routes. Each of our drivers is obliged, including third parties, to have comprehensive insurance, including civil liability insurance, so that in the event of an accident the injured person is covered. Amazon wants Prime members to receive their packages even faster...
NARRATOR: Last year, Amazon announced a change in the way it handles Prime deliveries. Instead of delivering packages in two days, they promised to do it in one. Free next day delivery across the US.... I can't imagine a world 20 years from now where a customer would come up to me and say, "Jeff, I love Amazon. I just wish they your prices were a little higher." Or, "I love Amazon. I just wish you would deliver a little slower." NARRATOR: At the same time that the delivery network was being established, Amazon was also rapidly expanding its product offerings, inviting more sellers to the site. (computer plays a melody) Including those from China.
Basically, it gets to where it's super easy for these companies, who are maybe not as careful about complying with the law, where they can just start a business on Amazon, import some stuff, sell it, because some issues, and then it's gone. . NARRATOR: Rachel Greer worked in product safety at Amazon and was concerned that the site would be flooded with untested and potentially unsafe products. Are there adequate warnings? Has it been safety tested for durability? If a child chews on it, will the paint come off? Is that lead paint? Most people would assume there's a pretty high security standard at Amazon.
And that assumption would be wrong. NARRATOR: She says that's because Amazon, like other tech companies, takes the position that it's not legally responsible if its customers are harmed by products sold by third parties on the site. If someone buys something that causes harm at Walmart or Target, a consumer can sue Walmart or Target. Right, because no one is forcing you, when you walk into Walmart, to walk through the Walmart doors. They are not forcing you to give up your rights. But when do you sign that when you go to Amazon.com? When you make your account.
When you accept the terms and conditions. NARRATOR: People have been challenging Amazon's terms and conditions in court. Some have even been successful. Ultimately, who is on the hook when a customer buys a dangerous product on Amazon? Who takes ultimate responsibility for that? Well, in the rare case that something like that happens, if it's a third-party seller, the sale is made by a third-party seller, and it's the seller's responsibility to sell a legitimate product to a customer, and then when Amazon is the retailer, and we sell a product to a customer, then it is our obligation to ensure that we understand the manufacturer and supply chain of that product and its safety.
But when the other sellers are selling in your store, aren't you ultimately responsible for it, if they're selling your customer a defective or dangerous product? I think the way things work in the US is that the seller of record is the person who sets the price and who buys the product, and for things that Amazon doesn't sell, and it says on the listing page details, I'll tell you who the seller is: it's the seller's responsibility for those things, and to us, it's very clear. It says Amazon.com every time we sell it. Do you audit your vendors in terms of whether they are actually providing safe products to their customers?
We do... You know, some of our sales... So almost 60% of our sales are from third parties, and those sales, some of them come directly from third parties, so we're not involved at all. But you take a cut. I mean, it's in their infrastructure, it goes through Amazon.com, so, I mean... Well, it's in our infrastructure in terms of the website and the payments, but we're not... And the fees that, you know, you're taking a piece of the sale, right? Sure, sure, and we're providing, you know, traffic that, that... You know, it's kind of the way they think about marketing is why would they pay that fee, but...
It's more difficult, before an experience, inspect that, that product. A South Carolina woman who bought a hair dryer on Amazon said this happened. she's got fire coming out of the hair dryer. NARRATOR: Amazon's approach has had consequences. A hoverboard caused a fire that destroyed her house. NARRATOR: Washington state authorities flagged dangerous products. ...they found dozens of school supplies that had high levels of toxic metals. NARRATOR: And a recent report found thousands of products that were banned, unsafe, or misbranded. I have a hard time understanding something, what is that, that... You know, the whole Amazon brand is about the customer, right?
Yeah. Which is... Oh, I reminded them of this over and over again. Did you remind them of what? I said that no customer wants to buy an unsafe product. No customer wants a selection that harms his child. No customer wants to buy something that burns down their house because it looks cool and it's the latest and greatest. Sitting here today, can you basically say that the products you sell on Amazon.com are safe? What I can say is that we work very hard to make sure that they are safe. We've... We've spent $400 million in the last year on systems that look for things that aren't secure and, you know, there are millions of sellers and hundreds of millions of products, and our job is, as fast as we can, we remove the that do not belong to our site.
We're going to have to be vigilant as a retailer and as a technology company, and we're definitely dedicated to protecting the safety of our customers. NARRATOR: We hear that concern for the customer over and over again in our interviews with Amazon executives. Customer trust in a company like Amazon is fundamental. Customer obsession is the number one leadership principle, and it's not a corporate slogan. We try to stay really customer focused. Very focused on delivering results for our clients. Provide a great customer experience that customers want. Delivering that, that customer delight. NARRATOR: This commitment to the customer, and to keeping prices low, had another benefit: It helped them avoid running afoul of regulators who enforce the nation's antitrust laws.
It's important to understand that there are two fundamental philosophies of antitrust, of antitrust law. You know, there's the traditional philosophy, where you want to break as many potential concentrations of power as you can. But over the last 30 years, there's been this change in the way that we do antitrust. And this is the idea that the sole purpose of antitrust laws should be to lower prices, to serve the interests of the consumer. NARRATOR: Lynn had been urging regulators to take a more traditional approach and examine whether the company was exploitatively gaining market power: stifling fair competition, but keeping prices low for consumers.
We live in a consumer society, though, and apparently there's some net benefit to all of us when prices are low. So what's wrong with that view of things? It's obviously good for people -- for all people if we can lower prices, if we have lower-priced drugs, if we have books that anyone can buy. That's good. It's a good thing for society and it's good for us as consumers. But we are not only consumers, we are also citizens. We are also producers. We are also people who think and do things and grow things, and we want access to open markets.
NARRATOR: Once again, the tension was most pronounced with book publishers. Amazon sold about 40% of all new books in the United States and two-thirds of all e-books, thanks to the success of the Kindle. So one of the biggest publishers in the world, Hachette, decided to back off. Franklin Foer was one of its authors. Hachette and Amazon set out to renegotiate their e-book deal. And Hachette said, "No, we don't agree to the terms of your contract." And Amazon basically said, "To hell with you, Hachette. We're going to stop delivering your books. If someone searches for a Hachette title, we'll redirect them to another publisher." Amazon's battle with Hachette and the authors Hachette publishes is heating up.
NARRATOR: As Bezos' virtual lockdown went on for months. A bitter seven-month standoff... NARRATOR: Thousands of authors, including bestsellers like Douglas Preston, were caught in the middle. Some authors were losing between 50% and 90% of their sales on Amazon. It was absolutely devastating for first-time authors. In fact, it destroyed their careers. Did you see your sales plummet? I did, yeah. I watched my sales plummet tremendously. NARRATOR: Frustrated, Preston wrote an open letter on behalf of all the authors. It was published in "The New York Times" with more than 900 signatures. We authors have loved Amazon. We have enthusiastically supported it, and this is how they treat us?
This is not OK. Amazon has been accused of doing everything from jacking up prices to deliberately delaying shipments. Is this what happens when Jeff Bezos decides to flex his muscles? NARRATOR: While Hachette and Amazon were at an impasse, Douglas Preston, Franklin Foer and other authors went to Washington and asked the Obama administration to open an investigation. I went to the Justice Department and I went to the Federal Trade Commission with the Authors Guild, and we tried to explain to them why this power was so dangerous. We pointed this out to all the ways that Amazon was bullying the publishing industry.
The Department of Justice heard us. And his response was essentially this: "Amazon is one of the most popular companies in the country. (Camera clicks) They havemore sophisticated technology out there, doesn't strike me as the right balance. It's been hard to even know how many police departments are using facial recognition technology, and there's no public audit to find out if there are allegations of abuse. How would the public find out? You know, again, I don't think we know the total number of police departments that are using facial recognition technology. I mean, hay, you can use any number--politically motivated or I'd post intimate photos of him.
Breaking news tonight, a wonder from the richest man in the world. NARRATOR: Rather than give in, Bezos fought back. Jeff Bezos criticizing the editor of the "National Enquirer", David Pecker. Bezos posted a personal account accusing the "National Enquirer" of blackmail, extortion. he turned the situation around and handled it so brilliantly: he was very transparent, he was very brave, he admitted to some very embarrassing things about himself, he didn't try to deny it, and he positioned the other person as the bully. and kicked the bully in the nuts, and somehow turned this into a net positive. I mean, this really was the PR strategy and execution for ages.
I've never seen anything like this. ♪ ♪ NARRATOR: Publicly, Bezos has forged ahead undaunted: a world-famous celebrity. And even after a $38 billion divorce settlement, he's still the richest person on the planet. (cheers and applause) But the calls to rein in his company are getting louder. Amazon reported $10 billion in profit and paid no taxes. I'll highlight companies like Halliburton or Amazon that don't pay taxes in our need to change that. Here's Bezos achieving this American dream and success. And now he is the target of all this criticism. And basically, he becomes a symbol of all his problems. Amazon is closing 30% of America's stores and malls and paying...
You're basically a piñata dangling in front of any politician with a populist message. Anyone who wants to talk about wealth inequality is pointing the finger at you. That's why three people own more wealth than the bottom half. If they want to talk about the problems of capitalism in general, they're pointing fingers at you. We need to enforce our antitrust laws, break up these giant companies. NARRATOR: And it comes from everywhere. President Trump just sent a shiver down Jeff Bezos' spine... The president again took on Amazon on Twitter. NARRATOR: President Trump has made Bezos's ownership of "The Washington Post" a regular target. "Washington Post," Bezos uses that as his lobbyist, okay?
He assumed that "The Washington Post" operated the same way a newspaper would operate. And so he thought Bezos was dictating coverage to the "Post," which we must be careful to say is not the case. NARRATOR: Trump also criticized Amazon, accusing the company of tax evasion. Last year, the company was competing for a $10 billion cloud computing contract with the Department of Defense. This contract would have solidified Bezos' dominance in cloud computing. This is something very important. NARRATOR: But the company claims that President Trump stepped in to botch the deal. And we're looking at it very seriously. It is a very big contract.
One of the largest ever delivered. A big win for Microsoft, beating Amazon... Amazon may protest the result, especially given President Trump's unusual and unprecedented comments... We live in extraordinary times where one of the biggest of the world's corporations, Amazon, now says, "The President of the United States has corrupted our ability to win this contract." Is there any evidence of that? The evidence is what the president has said publicly. NARRATOR: And Amazon's problems have continued to multiply. The Federal Trade Commission is now reconsidering its stance on antitrust enforcement and is looking at Amazon, as are regulators in the EU.
This guardian power and how the platforms wield it is of great concern. NARRATOR: In Washington, Democratic Rep. David Cicilline has launched an antitrust investigation into allegations of abusive conduct by Amazon and other tech giants. Given his experience, does he agree with Amazon's statements that suggest it seeks to act in the best interest of independent sellers? I don't agree with that. We get, I don't know, what I would call intimidation with a smile. We were able to get several C.E.O. come to a public hearing. That took tremendous courage because there is real potential for economic retaliation for sharing that.
We don't have the resources to fight Amazon. We could use some help. In the course of your investigation thus far, and you've had several public hearings, have you seen any evidence of anti-competitive behavior by Amazon? Um, we've seen evidence of anti-competitive behavior by all the big platforms as a result of their market dominance. But it is not up to companies to solve this problem. It falls on us. Without objections, the hearing adjourns. NARRATOR: Cicilline's committee is considering everything from placing limits on the businesses a company like Amazon can engage in, to restricting data collection and use. ♪ ♪ The man who helped Jeff Bezos build Amazon 25 years ago says it may be necessary to go even further.
On one hand, I'm proud of what it's become, but it also scares me. And, um, I feel like it's important that someone in my situation, you know, at least speak their mind about what's going on. This is kind of like a baby you gave birth to, right? And so, I mean, you helped give birth to Amazon. Um, yeah, a lot. In fact, I used to, um, you know, get up a few times during the night to see if it worked and... and, you know, take care of it if it didn't work, so... And when you look at what Amazon has become today, see what? (laughs) Well, um... you know, you don't want to see your kids, um, become, um, antisocial adults, do you?
So I think not all of the company's effects on the world are for the best and, um... And, you know, I wish it wasn't, and I... you know, and I. .. but I had something to do with bringing it into existence, so it's partly up to me. And, I mean, isn't it... Isn't this just capitalism? Isn't this just a company doing what a company does? Yeah. Yeah, it is, um, and I think they're doing what business schools teach people to do, and they're doing it aggressively, skill
fully, and with great intelligence. And they will continue to do so unless constrained by other forces in society.
There are proposals to break up Amazon. Is that something you would promote, the idea of separating them? Um, I think now they're at the scale where that might make sense. How do you, Jeff and others at the senior leadership level think about the call to separate them? We don't think about it very, very deeply. You know, I've been at Amazon for 22 1/2 years and I always remember one of the first things I heard Jeff Bezos say when we could fit the entire company into one conference room for everyone. - meeting of hands He said: "I would not go to bed at night fearing your competitors or fear of any external problem.
I would go to bed at night fearing if you are doing the right thing by your customers." And that's really a creed that we live by here and that's what we spend most of our time thinking about. Well, I understand that we're big, and that we deserve scrutiny, and I think everything that's... that's big in the economy and in society should deserve scrutiny. The problem is, when you think about us, we're in a lot of verticals, yeah. There's... there's video, and there's commerce, and there's, you know, there's web services, there's all these things. But in each of them we have intense competition, and I understand why, when you're in many of them, it can seem like we're everywhere, but the global...
If we were everywhere, that means we're talking about the economy. global, not just global retail -- it's so vast that we're just, you know, we're a speck. To the public, it may sound strange coming from Amazon, which is a company with a market cap of basically a trillion dollars, their C.E.O. He's the richest man in the world, but Jeff Wilke told me you're kind of a blip in the scheme of things. See how that might seem strange or incongruous? You know, Amazon as a whole has become, you know, been successful, but just because the company has been successful in a few different business segments doesn't mean it's too big. ♪ ♪ NARRATOR: As Jeff Bezos' company comes under increasing scrutiny, for everything from how it wields power to even its impact on the environment, he continues to look beyond it all.
We have an opportunity to preserve this unique gem of a planet that is completely irreplaceable. There is no plan B. We have to save this planet, and we must not give up a future for our grandchildren's grandchildren of dynamism and growth. We can have both. Who is going to do this job? (rocket noise) NARRATOR: he's spending a billion dollars a year of his personal fortune on a space exploration company he created. And it's the job of this generation to build that path into space, so future generations can unleash their creativity. NARRATOR: For Bezos, he's always been about one thing: his vision of his future.
I want you to think about this. This vision sounds very big, and it is. None of this is easy, everything is hard, but I want to inspire you, so think about this. Big things start small. (audience applauding) Thank you. (Audience cheers and applauds) ♪ ♪ Go to pbs.org/
frontlinefor lengthy excerpts from our interviews with Amazon's top executives and experts, including the number one employee. On one hand, I'm proud of what it's become, but it also scares me. And more on Amazon's use of facial recognition software. I think society is already doing a lot of good with facial recognition technology.
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frontline. Subtitled by Media Access Group at WGBH access.wgbh.org For more information on this and other "Frontline" programs, visit our website at pbs.org/frontline. ♪ ♪ To order FRONTLINE, "Amazon Empire: The Rise and Reign of Jeff Bezos," on DVD, visit Shop PBS or call 1-800-PLAY-PBS. This show is also available on Amazon Prime Video. ♪ ♪
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