On Wednesday, I bought an umbrella at a Web site. I was utterly confident it would arrive on Friday, even though hadn’t paid any express shipping fees. Thank you, Amazon Prime.
Making transcontinental logistics boringly predictable is just one of the dents Amazon has left in the digital universe over the past two decades. The Web’s biggest retailer (if also one of its least-profitable firms) celebrates its 20th birthday on Wednesday. Over that period Amazon has changed many of the rules governing the online world — including some of the rules enacted in Washington, DC.
Some of those changes — like the ability to make near-thoughtless purchases of random stuff from anywhere with an Internet connection — are truly awesome. Others, not so much. Here are five key issues where Amazon used its massive power to sway the market, or chose to sit on the sidelines.
1. Digital rights management: Playing both sides
The shift of music, movies, TV, and books from physical to digital has been one the biggest stories in technology over the last two decades. And, at an important moment, Amazon helped push that transition in a customer-friendly direction.
Although it didn’t beat Apple to selling major-label music without digital rights management restrictions, it launched a DRM-free music store in September of 2007, a year and a half before Apple got out of selling DRMed music. That was both good for business (it got Amazon ahead of a trend) and good for buyers.
Alas, we haven’t seen the same positive outcome from other forms of digital media. Amazon’s Instant Video streaming catalog, which includes some great exclusives like the Washington send-up “Alpha House,” is a great bonus for Prime subscribers and a key cord-cutting tool. But Amazon’s video downloads come as locked with DRM as everybody else’s.
So do most of the titles on Amazon’s Kindle Store, which doesn’t even indicate when an author or publisher has opted out of DRM. (Most publishers don’t take that option, even though insisting on DRM that ties e-book downloads to Amazon’s apps only increases the etailer’s market power — something book publishers constantly whine about.)
On the upside, DRM’s dominance in e-books makes physical books look that much more flexible and permanent. This may factor into the surprising resurgence of independent bookstores.
2. Internet sales tax: The big switcheroo
For years, Amazon had a one-word answer to proposals that it start collecting state sales taxes shoppers owe on their purchases: No. Make that three words: No, No, and No. In 2011, it even closed a warehouse in Texas—yes, that hive of socialist income redistribution—when presented with a bill for sales taxes due.
But later that year, Amazon started changing its mind, signing deals with a growing number of states to collect sales taxes. In return, it was allowed to open warehouses in those states, speeding up its distribution. The company now even backs federal legislation to mandate sales-tax collection by online retailers.
The group that once worked with Amazon against these state-level sales-tax efforts is annoyed at the change and thinks Amazon is now out to burden smaller competitors.
“Remember 20 years ago when everyone was worked up about big-box stores killing family-run businesses?” wrote Katie McAuliffe, executive director of digital liberty at Americans for Tax Reform. “Now that Amazon itself is a big-boxer, it’s in league with crushing small businesses.”
3. Privacy: Mostly silent
On many other issues, Amazon has been much less vocal than you might expect, considering its size and influence.
Consider the pathetically weak laws about government access to communications stored online. Amazon joined a group lobbying for their reform, the Digital Due Process, before Apple and Dropbox. But it’s been mostly silent since and only got around to the basic step of posting a “transparency report” inventorying government data requests this year.
“It hasn’t been nearly as active as others on surveillance issues,” summed up Mike Masnick, founder of the Techdirt tech-policy blog.
4. Patents: A troll model
On patents, Amazon has arguably been part of the problem more than the solution. It secured a patent on its “1-click” shopping interface, then promptly sued Barnes & Noble for infringing on what the pioneering Internet publisher Tim O’Reilly called “a parody” of an invention (and which the European Union has yet to find worthy of a patent).
And while Amazon’s far smaller rival NewEgg.com has spent millions of its own dollars battling patent trolls in court, Amazon has shown nowhere near the same resistance to that form of legalized extortion. In one case, it paid $40 million to license a bogus patent that NewEgg later had thrown out in court.
5. Net neutrality: Mostly neutered
Public Knowledge counsel Harold Feld doesn’t agree with Szoka on too many things but did on that one, writing that “Amazon has been much more interested in keeping a low profile than in showing leadership.”
All of this stands in striking contrast to the conduct of the man who has benefited most from Amazon, founder Jeff Bezos. He has plowed his billions in personal wealth into a variety of projects without an immediate or obvious reward, from buying my old employer the Washington Post to financing underwater archeology and launching a private space program, Blue Origin.
Any one of those ventures may fare no better than Amazon’s Fire Phone. But combined, they cast a some favorable light on the company whose success made them possible. I guess they do make me feel better about all the money I’ve sunk into Amazon over the past two decades.