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Amazon's two big deals have one big thing in common – data

·Senior Reporter
·6 min read

This article was first featured in Yahoo Finance Tech, a weekly newsletter highlighting our original content on the industry. Get it sent directly to your inbox every Wednesday by 4 p.m. ET. Subscribe

Wednesday, Aug. 17, 2022

Amazon (AMZN) is buying two different but high-profile companies – Roomba-maker iRobot and concierge healthcare provider One Medical.

At first glance, these two companies have little in common. Roombas – which I find terrifying – are mobile robots that vacuum your home, while One Medical provides a tech-powered primary care network.

As it is, Amazon can already get a “robust picture” of you from devices like Alexa and Ring, according to Ian Greenblatt, who leads J.D. Power's Technology, Media, and Telecommunications Intelligence practice.

“Whatever can be imagined, offered, or acquired by Amazon can be connected, like a Roomba,” Greenblatt told Yahoo Finance.

In addition, Greenblatt added that your name, address, searches, and recordings can be collected by Amazon when you speak to its Alexa Voice Assistant.

“It knows your orders, content you watch on Prime, your contacts if you upload them and communications with it via email," said Greenblatt.

That’s just the beginning: Cookie trackers that enhance shopping experiences on the company’s e-commerce site, payment and delivery information, and facial recognition are all also feeding into the data that Amazon has on us.

Understanding how iRobot and One Medical contribute to Amazon’s data empire

iRobot and OneMedical bring two new kinds of data to the picture.

The Roomba can offer the sort of data that can be collected through mobility. For example, a Roomba theoretically could know the layout of your home.

“A company like iRobot (Roomba) gathers very private, very specific data,” Steve Lappenbusch, Head of Privacy at People Data Labs told Yahoo Finance. “But, the ability to discern or do potentially objectionable things will largely depend on what other datasets that data can be combined with.”

LARKSPUR, CALIFORNIA - AUGUST 05: Roomba robot vacuums made by iRobot are displayed on a shelf at a Bed Bath and Beyond store on August 05, 2022 in Larkspur, California. Amazon announced plans to purchase iRobot, maker of the popular robotic vacuum Roomba, for an estimated $1.7 billion. (Photo by Justin Sullivan/Getty Images)
Amazon announced plans to purchase iRobot, maker of the popular robotic vacuum Roomba, for an estimated $1.7 billion. (Photo by Justin Sullivan/Getty Images)

The example Lappenbusch uses is home layout data, which on its own seems like its applications could be wild but fundamentally limited. What if you combine that data with search and consumer purchase histories, plus public records like building permits?

Soon, you could end up with a situation where Amazon knows “what people are doing in each room and with what products, online and offline,” cautions Lappenbusch.

Lappenbush added that the application "will likely focus on marketing products, but it also reveals a lot about people’s private lives."

Meanwhile, One Medical adds health data into the mix, which adds a new layer to Amazon thoroughly understanding you.

“Amazon’s expansion into the healthcare space has been happening for years, but the minute Amazon is effectively your primary care provider, the potential data collection issues are no longer a trivial matter,” Stephen Beck, a partner at consultancy cg42, told Yahoo Finance.

“The interpersonal dynamic between a patient and their healthcare provider is incredibly sensitive," he added, "and the data Amazon can now gather about your health and behaviors has much more serious potential implications."

It’s worth noting that One Medical and Amazon are subject to the Health Insurance Portability and Accountability Act (HIPAA). This means if the deal closes, Amazon would handle One Medical patients’ data separately, according to a source familiar with the matter.

I’m going to introduce you to a section of Amazon’s business you perhaps haven’t heard of: Amazon Sidewalk. According to Greenblatt, Amazon Sidewalk is a “mesh network of Amazon Echo and Ring devices using each other – and other Sidewalk-enabled devices – as bridges to stay connected to the cloud services enabling their features."

SAN RAFAEL, CALIFORNIA - JULY 21: A sign is posted in front of a One Medical office on July 21, 2022 in San Rafael, California. Amazon announced plans to acquire health provider One Medical for an estimated $3.9 billion. (Photo by Justin Sullivan/Getty Images)
Amazon announced plans to acquire health provider One Medical for an estimated $3.9 billion. (Photo by Justin Sullivan/Getty Images)

Sidewalk is highly secure and uses small data, involving deeply specific metrics like baseball scores or biometric data.

“Other people's Sidewalk devices won't actually be able to access, join or even see your home's local network, and you won't have any access to information about those devices or their users,” said Greenblatt.

Nothing to hide

We have increasingly seen calls for data privacy, and even the Federal Trade Commission seems like it’s set to make some major changes soon.

Some experts, including Lappenbusch, believe it’s not data that needs to be regulated exactly — it’s how data is used by businesses and within business models.

“To date, a lot of regulation has focused on data types,” he said. “We have rules governing personal data, medical data, biometric data, and online behavior data. The drawback to this approach is that policy will always evolve more slowly than business models. New data types are created all the time and regulations will struggle to keep pace.”

And, of course, what if you want out? According Lappenbusch, the answer might not be trying to withhold your data from one company, or group of companies.

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“Amazon is just one player who will have access to this data,” he said. “Consumers should be focused less on what data is out there, and more on what ways they’re comfortable seeing that data used.”

However, even if you want out of the Amazon ecosystem, don’t necessarily expect everyone around you to be on-board. For its part, Amazon says it takes its responsibility to be good shepherds of our data seriously.

“Protecting customer data has always been incredibly important to Amazon, and we think we’ve been very good stewards of people’s data across all of our businesses,” an Amazon spokesperson told Yahoo Finance. “Customer trust is something we have worked hard to earn —and work hard to keep— every day.”

Even if you aren’t completely bought into the Amazon ecosystem with all its bells and whistles, you’re still engaged with it in all likelihood. I can’t help but think Amazon’s portfolio has gotten so large that there’s really something for everyone.

“Companies need to be good shepherds of consumer data,” said Greenblatt. “Those that don’t take this responsibility seriously risk losing public trust and a competitive advantage… Think of the Warren Buffett line: ‘It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.’”

Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks.

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