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Practice English Speaking&Listening with: Amazon Empire: The Rise and Reign of Jeff Bezos (full film) | FRONTLINE

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>> Im Jeff Bezos.

>> What is your claim to fame?

>> Im the founder of

Amazon.com.

>> NARRATOR: From the

award-winning producers ofThe Facebook Dilemma”.

>> Richest guy in the world.

>> NARRATOR: FRONTLINE

investigates Amazon.

>> Is Amazon taking over the

world a good thing?

>> NARRATOR: Questioning those

who run the company...

>> What would you say to someone

who feels as though humans are increasingly being treated like

robots?

>> Thats not the experience

that I had in setting it up.

>> NARRATOR: And those no longer

there.

>> Most people would assume

theres a pretty high safety standard on Amazon.

>> And that assumption would be incorrect.

>> The tools are not what I call battle tested.

>> Some people asking if Amazon is a monopoly.

>> The question for the democracy is, are we okay with

one company essentially winning capitalism?

>> How do you and Jeff think about the call to

break you guys up?

>> Simply because the

companys been successful doesnt mean its

somehow too big.

>> NARRATOR: Now on

FRONTLINE...

>> Domination was very much the

idea.

>> NARRATOR: “Amazon Empire”.

>> Jeff Bezos has already conquered the retail frontier.

Now he's got a plan to colonize the planets.

>> Bezos is laying out his plans for colonizing space.

>> Bezos is known for going big, and now he's literally shooting

for the moon.

>> NARRATOR: In May of 2019,

Jeff Bezos, the richest person on the planet, unveiled his

latest invention.

>> This is Blue Moon.

It's time to go back to the moon, this time to stay.

>> Jeff has said over and over again that the most important

work he's doing is work in space.

What he's built in Amazon is really important and really

interesting, and it's, it's revolutionized commerce.

But it's only revolutionized commerce.

>> NARRATOR: Bezos's plan is to chart a new course for the

future of humanity.

>> Manufactured worlds rotated

to create artificial gravity with centrifugal force.

These are very large structures, miles on end.

And they hold a million people or more each.

>> NARRATOR: It's an idea he's had since he was a teenager.

>> This is me in high school.

And I want to highlight this

quote: "The earth is finite, and if the world economy and

population is to keep expanding, space is the only way to go."

I still believe that.

>> The way Jeff Bezos sees is it

is that consumerism is an example of how today's society

lives better than our parents did and our grandparents.

And he wants, you know, future generations to continue to have

an increasingly better lifestyle.

>> These are beautiful.

People are going to want to live

here.

>> NARRATOR: Bezos unveiled his

extra-terrestrial plans at a time of growing concern about

the empire he's built here on earth.

>> Amazon is the great disrupter, from books to retail

to grocery stores.

>> NARRATOR: For more than 25

years, Jeff Bezos has been disrupting and transforming

almost every aspect of our modern lives.

>> Once you start connecting the dots, you see that Amazon is

building all of the invisible infrastructure for our futures.

>> Amazon announced a healthcare partnership...

>> Amazon is helping the C.I.A. build a secure cloud...

>> How much of the internet do you run?

>> That's a good question, um, it's a lot, though.

>> NARRATOR: But in recent years, Amazon-- and Bezos-- have

come under scrutiny for their aggressive tactics and expanding

power.

(Bezos laughing)

>> Everything that is admirable about Amazon is also something

that we should fear about it.

>> NARRATOR: For the past year,

we've been investigating how Jeff Bezos built his empire--

and at what cost.

>> And so think about this.

Big things start small.

♪ ♪

>> NARRATOR: Jeff Bezos's empire has its roots not in Silicon

Valley, but on Wall Street.

That's where the young Princeton

graduate went to work in the early 1990s, at a secretive

hedge fund called D.E.

Shaw.

>> David Shaw was the one who revolutionized Wall Street by

introducing data.

And I think Jeff really embraced

that, that idea that, "Hey, if you have data, ultimately, you

win."

>> One of the things that David

Shaw asked Jeff Bezos to do was to go and investigate new

businesses, and in particular this new thing in the early

'90s called the World Wide Web.

(dial-up modem connecting)

>> We all know that a communications revolution is

underway in this country.

>> What is the internet?

>> It's sort of the mother of all networks.

>> It's information highways.

>> It's kind of like your remote

control to the world.

>> NARRATOR: Bezos was quick to

see the untapped potential of the new digital landscape and

was determined to get in on it.

>> I came across this startling

statistic that web usage was growing at 2,300% a year.

So, I decided I would try and find a business plan that made

sense in the context of that growth, and I picked books as

the first best product to sell online.

♪ ♪ Because books are incredibly

unusual in one respect, and that is that there are more

items in the book category than there are items in any other

category by far.

So, when you have that many

items, you can literally build a store online that couldn't exist

any other way.

>> NARRATOR: The store he was

imagining didn't exist, so he decided to build it himself.

♪ ♪ >> The reaction to Jeff's idea

to start selling books on the internet was pretty incredulous,

you know, from a lot of the people close to him.

His mom tried to convince him to just do it at night or over the

weekends.

She didn't want to see him give

up his job.

>> Jeff called, and he told me

that he and MacKenzie were quitting their jobs, and they

were moving to Seattle and starting a company.

I said, "Great, well, what are you going to do?"

He said, "We're going to sell books."

I said, "Nice."

He said, "On the internet."

I said, "Oh.

Jeff, why will anybody buy

anything from you?"

And he said, "Well, we're going

to have more books than anybody else."

>> NARRATOR: One of the first names Bezos considered for his

new website was Relentless.com.

>> Why "Relentless?"

>> Relentless meant, "We move on no matter what."

He ultimately, obviously, decided that "Relentless" wasn't

quite the right fit.

Amazon, earth's largest river,

was.

Amazon means gigantic.

>> In terms of relentlessness, stopping at

nothing, that's, is that an apt description of Jeff?

>> No.

It's not that Jeff stops at

nothing, it's that when Jeff sets his mind on a goal that he

thinks he can achieve, he won't stop until he's proven wrong

or until he achieves it.

♪ ♪

>> Jeff and MacKenzie had rented a house in Bellevue.

And then we moved to a small, second-floor office in the

south part of Seattle.

>> NARRATOR: Shel Kaphan was

Amazon employee number one, one of nine former Amazon insiders

who agreed to talk on camera.

>> What the company is now was

nowhere in my wildest imagination.

Nowhere, so, the fact that it could have the-the kind of

position in the world that it has now, I had no clue.

>> NARRATOR: In July 1995, Amazon.com went live.

>> It was an incredible novelty, it was tiny and obscure, and

it's very hard to imagine, but the entire universe that Amazon

now dominates did not exist.

>> Amazon.com, this virtual

shop claims to be the world's largest bookstore.

>> NARRATOR: It didn't take long for Bezos's vision to prove

prescient.

>> What makes us different is

vast selection, convenience-- we deliver right to the desktop.

If our catalog were printed on paper, it would be the size of

seven New York City phonebooks.

♪ ♪

>> NARRATOR: The company quickly outgrew the garage and soon had

more than 50 employees.

In 1996, James Marcus applied to

be number 55.

>> There was a very palpable

excitement in the air at this place, and of course at this

point Jeff Bezos was the first person to interview every

prospective employee.

So I was ushered into his

office.

He wanted to see how fast you

were on your feet.

He also always wanted to know

your S.A.T. scores.

>> He wanted to know

your S.A.T. scores?

>> Every time, yes.

>> How old were you at the time?

>> I was 36 or 37.

>> This is the original sign

that I made for Amazon.com.

Blue spray paint on white poster

board.

>> Jeff wasn't a figure out of

folklore at that point, he was not the-the wealthiest man in

the world.

>> Here's my computer,

Amazon.com up on the screen.

"Hello, Jeff Bezos."

>> He was a small, nondescript, sandy-haired man sitting at a

desk with quite a large and eruptive laugh.

(laughing in multiple scenes) >> But he wasn't threatening, he

was a normal guy to a sort of amazing extent.

>> HAL 9000 hat, very important.

Hal and I share a birthday,

we're both born on January 12.

>> It belied, you know, an

enormous, Napoleonic ambition.

>> One of the people I really

like, Thomas Edison, here's a model of his original light

bulb.

He's famous for saying, "One

percent inspiration, 99 percent perspiration."

(laughs) It turns out ideas are the easy

part, execution is everything.

>> Domination was on Jeff's mind

from the beginning.

One of his sort of

second-in-command people said to me, "You have to understand

that Jeff wants to sell many more things than books.

And Jeff's idea is that in the near-distant future, you could

buy a kayak from Amazon.

And if, and after you brought

the kayak, you could figure out good places to kayak and buy

travel services from Amazon."

So, those ambitions were very

clear, and this was very early on.

But he was clearly thinking in those terms from the get-go.

>> How did that ring to you at the time?

>> A little bit exciting and a little bit nutty.

>> Amazon.com, very good website.

You should really try it.

(Bezos laughs)

>> If you signed on to work at a-a kind of futuristic

bookstore, and the guy who owned it was suddenly talking

about selling, you know, every object in the universe, you just

weren't sure how seriously to take it.

(Bezos laughing) (Bezos screaming playfully)

>> NARRATOR: Though his public image was often unserious...

>> That was awesome!

>> NARRATOR: Inside the company,

Bezos was a hard-charging manager relentlessly focused on

the principle that would make Amazon one of the most trusted

brands in the world: the customer always comes first.

>> This culture of customer obsession...

Obsessive focus on customer...

Obsesses over our customers...

Totally obsessing over the customer experience.

>> We used to call it customer ecstasy.

It means building, delivering, focusing on your customer.

And we did it, you know, in the very, very early days at every

stage.

>> NARRATOR: Jennifer Cast was

there in the early days and is one of six top Amazon executives

the company put forward to speak to us.

>> Customer obsession was our North Star.

And so, you know, it was a place where we knew we were a part of

something that was new, the internet.

There was an excitement that we were doing something that hadn't

been done before.

It was exhilarating.

We were all aligned around building for customers.

>> Hey, you guys.

>> Hey.

(Bezos laughs) >> I've heard there was

an empty chair that would often be put at meetings.

>> Yeah.

>> Who was in the empty

chair?

>> Yeah, so that empty chair was

there to remind us all to understand the customer, have

empathy for the customer, understand the details of the

customer experience.

The customer isn't there, we

have to bring forward the voice of the customer.

(phone ringing) >> Thank you for calling

Amazon.com.

>> NARRATOR: And Bezos quickly

learned that in this new online world, he could understand

exactly how customers were behaving.

>> All orders do need to be placed online.

>> It was made clear from the beginning that data collection

was also one of Amazon's businesses.

All customer behavior that flowed through the site was

recorded and tracked.

And that itself was a valuable

commodity.

>> Have you visited our website?

>> We could track how a customer navigated through the site.

So we could see what you looked at, we could also see what you

paused at, we could see what you put in your basket but didn't

order, we could see what you put in your basket and did order.

So that's when we started realizing, "Man, this is rich.

This is rich, rich, rich."

And so we've used it for

everything.

>> What do you do with that

information?

>> That's the data that allows

us to predict, or try to predict, what books that you

would like that you haven't discovered yet.

>> NARRATOR: Bezos treated the site as a laboratory, where he

studied customer behavior along with his chief scientist Andreas

Weigend.

>> I was shocked to see how

predictable people are.

If you take the time of the day

into account, if you take maybe when they were last on the site,

how long they were on the site last time, how long they're on

the site today, you know what they're falling for.

>> Whoever owns, collects, the data, if you have access to it

and rights to data, then you are king.

It's all about the data.

Everything.

>> One of the most fascinating kind of tools we have at our

disposal is the ability to do active experiments.

It's, you know, it's kind of this huge laboratory.

>> We did not think about it as exploiting, we thought about

helping people make better decisions.

>> I was starting to feel that that was less respectful toward

the consumer, who was, after all, supposed to be our god, the

person whose ecstasy was our very reason for being.

And it was closer to getting a cow into a milking stall and

extracting as many pails as possible during each visit.

And that felt a little more unsavory.

But that was the business of Amazon.

>> Amazon has added 880,000 new customers...

>> NARRATOR: While Bezos was using these insights to bring

more and more customers into Amazon...

>> The number of customers who use the website has increased

fourfold...

>> NARRATOR: There was one thing

he hadn't done yet.

>> The company's never made a

profit.

>> That's right.

>> Now, why... how does that... why... how does that...?

>> It seems like a new math, doesn't it?

>> It does.

>> NARRATOR: Bezos would spend

years losing money trying to beat his competition, and he

convinced investors to go along with it.

>> One of Jeff Bezos' greatest accomplishments has been his

ability to get Wall Street to accept the fact the first

20-some years, Amazon wasn't going to be very profitable.

And that's okay because they're building infrastructure that

will create huge opportunities for them to gain scale and gain

customers and gain business.

>> NARRATOR: He spelled it out

in a letter to shareholders after the company first went

public: "It's all about the long term," he wrote, rather

than short-term profits or Wall Street reactions.

>> He essentially says, "We are going to forego profits

in order to take market share.

That our strategy is to lose

money, which enables us then to put other companies out of

business who can't afford to lose money."

>> NARRATOR: That strategy wouldn't sit well with critics

like Stacy Mitchell, who advocates for small businesses.

>> In essence, at the very beginning, he's signaling to

shareholders, "I have a strategy to monopolize the market, and

that's going to reward you, but it's going to be far down the

road, and will you come along with me?"

And they said yes.

>> NARRATOR: Investors also

recognized Bezos' essential advantage over physical stores,

which had to charge their customers sales tax, unlike

online businesses.

>> So, not collecting sales tax

gave Amazon a big leg up over bricks and mortar retailers.

And that was central to their early strategy of gaining

market share as quickly as they can.

>> What booksellers were saying to me is that, "This is driving

my customers to Amazon.

They'll come into the store,

they'll browse, they find what they want, but then they'll go

buy it on Amazon, because they can save that sales tax."

>> So it was a very irksome, early, big issue for the book

vendors, first of all, they were kind of the canaries in the

mine, so to speak, and then lots of other retailers.

♪ ♪ >> Amazon has added thousands of

warehouse workers and three million square feet of space.

>> NARRATOR: Amazon's sales-tax advantage would be central to

its success as it expanded beyond books, into other

products.

>> And we have a fantastic

selection of things you can look at.

Electronics and then of course toys.

Yeah, thank you, here is, we've got have the friendly Pokémon.

This is more than ten times the selection that you will find in

a typical, physical world software store.

>> NARRATOR: But Bezos was still a long way from his goal of

Amazon being the place where you could buy everything online.

(drills whirring) And he saw a way to achieve it.

>> Amazon could soon become the Walmart of the internet.

>> NARRATOR: There were thousands of businesses eager to

sell online.

Bezos offered them a way to do

it.

>> Amazon is transforming itself

from an online bookstore to an online mall.

>> NARRATOR: He transformed Amazon into a retail platform

where anyone could sell their goods to his customers and

invited thousands of other businesses to be a part of it.

>> It's the easiest place for anybody, small or large, who

wants to set up shop online to sell online, because they can

access our 12 million-plus customers.

Anybody, all comers.

>> We're talking about hundreds

of thousands of companies with literally tens of millions of

products.

>> NARRATOR: Name-brand stores

started selling on Bezos's platform, and so did tens of

thousands of small entrepreneurs.

>> Everyone knew Amazon.com.

The only people that knew

SuperDuperHoops.com were the ones that were searching to buy

a basketball hoop and saw our name on an advertisement.

To us it was really a no-brainer.

We knew that we would, you know, increase our sales.

First year we did 100,000, next year we did a million, we did

two million, four million, we were doubling every year in the

early days.

>> NARRATOR: It was great for

the companies-- and even greater for Jeff Bezos.

>> Amazon has become the most recognizable name in e-commerce.

>> NARRATOR: Not only would he take a cut of everything other

businesses sold, he'd also keep his own store on the platform,

competing against everyone else in the marketplace he owned and

controlled.

>> He owns the Main Street.

He has the Main Street real estate.

Not just one building on the corner, the entire Main Street.

♪ ♪ >> NARRATOR: How Amazon would

wield its power over the online marketplace would eventually

become a question for government regulators, but early on, there

were indications.

The first to see them were book

publishers.

>> Amazon took over a large

market share of the publishing industry very, very fast.

They were very quickly in a position to demand concessions.

You know, I think that was a moment where publishers started

to realize, "Oh, wait a minute, like, we... they're our partner,

but they now have the beginnings of a boot on our

windpipe."

>> NARRATOR: Inside the company,

they had launched a strategy that some called "the Gazelle

Project," because they'd heard Bezos wanted them to pursue

publishers the way a cheetah pursues a sickly gazelle.

>> Well, you don't go after the strongest.

It's like the cheetah.

The cheetah looks for the weak,

looks for the sick, looks for the small, that's what you go

for.

So don't start with, you know,

number one publisher.

Start with number seven

publisher and then number six publisher, and by the time you

get to number three, two, and one, the noise has gone, gotten

back to them.

They're going to know this is

coming, and chances are you may be able to settle that without a

full-on war.

>> We were just this little

mom and pop publishing company, publishing poetry books and

translated fiction.

>> NARRATOR: In the early 2000s,

the number of books Dennis Johnson was selling on Amazon

had been rising steadily.

Then one day, he got a phone

call.

>> Our distributor called us up

to talk about our Amazon contract.

And he said, "I went out to dinner last night with Amazon,

it was like going out to dinner with the Godfather.

They want a kickback."

That's the word he used,

kickback.

And he said they wanted four

percent more of our sales.

>> Was that unusual?

>> It was... in our experience, it was totally unprecedented,

yes.

>> NARRATOR: Randy Miller ran

the European book team and says he saw nothing wrong with

Amazon's tough tactics to challenge publishers on prices

and profit margins.

>> In order to bring them into

line, we would actually take them out of automated

merchandising, take their prices up to list price; we would put

references on the product page, their product page, saying, "You

want it cheaper, you want this book for, on this topic for a

way cheaper price?

Click here."

And we'd send them to whoever we thought their worst competitor

was.

That was how Amazon forced their

vendors to-to comply.

(stammering): But that's an

old Walmart trick, I mean, it wasn't like Amazon created that.

And it made, it made a difference.

And, you know, Jeff kind of got excited about it.

>> NARRATOR: When Dennis Johnson still refused to give in to

Amazon's terms, he says the buy button on all Melville House

books suddenly disappeared, making it impossible for

customers to purchase them on Amazon.

>> I mean, this is the company that referred to little

publishers like me as wounded gazelles, I believe?

That's how they think, that's how he thought from the

beginning.

And we eventually had to pay

what at the time I called a bribe.

And our attitude toward Amazon was, you know, "Render unto

Caesar that which is Caesar's."

And then carry on as best as you

can.

>> Jeff Bezos may say

that Amazon comes along and has given publishers like yourself

access to a huge distribution channel for your books.

Has Amazon been good for your business?

>> Well, absolutely they have.

Any bookseller that sells our

books is good for our business.

So, I'm not complaining that

Amazon is selling our books.

I'm just complaining of the way

that their tactics are hurting the industry I love.

>> NARRATOR: In addition to granting interviews, Amazon

responded to written questions.

Regarding Dennis Johnson's

characterizations, it told us, "Amazon disagrees with this

account."

>> Were you

uncomfortable with that sort of ruthlessness ever?

>> Well, no, 'cause I was in retail-- I mean, people think

that's ruthless.

You know, I looked, and some

people at Amazon, "Wow, that's kind of mean," and I'm like,

"Oh, a retailer and a supplier having a disagreement?

Stop the presses!"

It happens all the time.

I mean, you know, look, you've got a finite margin, and

somebody's going to have to give.

And-and a lot of times Amazon wasn't the one giving.

>> Kindle is a purpose-built reading device.

>> NARRATOR: The tension between Amazon and book publishers would

ramp up even further with the unveiling of the Kindle, which

helped the industry transition to the digital age, but gave

Amazon more power to set prices lower.

>> And new releases are only $9.99.

>> NARRATOR: Around that time, Barry Lynn, an advocate for

broad antitrust enforcement, was growing increasingly concerned

by what he was hearing from publishers.

>> If the door was open, the publisher would say, "Hey, you

know, Amazon, they're just a terrific customer, they're our

biggest customer.

They buy the most books, they

sell the most books.

We love them."

Then you close the door, and they say, "Amazon is destroying

our business model, they're destroying our business, they

have way too much power, we must do something about them."

>> NARRATOR: Lynn wanted publishers to speak up

publicly and thought federal antitrust regulators might

investigate whether Amazon was a monopoly, illegally abusing its

market dominance in anticompetitive ways.

>> And they'd say, "No way, I'm not going to talk about Amazon

in public.

I'm not talking about them on

Capitol Hill.

They will take retribution

against me."

>> To which you

responded?

>> "Well, that's why we have to

do something about it."

>> NARRATOR: Jennifer Cast ran

Amazon's books division in its formative years.

>> We've had a difficult time in some ways getting

publishers to talk to us on camera about Amazon.

In part, it seems the reason is that they're afraid.

How do you react to that, that publishers find it

uncomfortable to talk about Amazon publicly?

>> I don't know, I mean, I-I haven't seen that.

>> Yeah.

>> I haven't been in your shoes.

I'm sure they have...

I mean, if you're saying that they-they

don't talk negatively about us, I mean, I know they have a lot

of good things to say about us.

Um, you know, I-I don't know why

they wouldn't speak their minds.

We certainly value speaking our

minds.

>> There is this

well-known anecdote about cheetahs and gazelles, this

Gazelle Program.

Do you know about that?

>> I don't.

>> We've talked to

former Amazonians about it, where Jeff had said, "We should

basically try to negotiate with book publishers and try to get

better terms and treat the smaller publishers as a cheetah

would go after a wounded gazelle."

>> I didn't hear the cheetah and gazelle example, but what we

were looking for was people that were willing to move away from

the old model of bricks and mortar to a new model, which

was, you know, a-a virtual store that had many different types of

opportunities to present their books to customers.

>> I want to talk a little bit about how we think about

innovation at Amazon.com.

>> NARRATOR: Amazon would begin

to accumulate even more power in 2005, when Bezos quietly rolled

out a revolutionary new program: Amazon Prime.

>> Now they have something called the Prime shipping

program.

>> Amazon Prime-- we only

launched this a week ago-- you pay $79 a year, and you get

two-day shipping for free.

>> NARRATOR: It was a risky bet,

and it paid off.

>> The lynchpin, or the glue, if

you will, and probably the seminal moment in Amazon's

business history, was the introduction of what has become

the most successful membership program in history, and that's

Prime.

>> Many of you in this audience

will already be Amazon Prime members, bless you.

This is very much appreciated.

>> It changes the way you shop.

>> NARRATOR: Eventually more than 150 million people would

sign up for the free shipping-- a tremendous expense for Amazon.

But to Bezos, it was worth it.

>> The Prime program at Amazon

is one of the most important drivers of Amazon's growth.

When you go on and look to buy a product, and it's available in

two days, delivered to your door anywhere in the country, that

Amazon Prime program becomes a mechanism that keeps bringing

you back as a customer to keep buying and keep searching for

new products on Amazon.

>> NARRATOR: Two-day delivery

anywhere in the country was a big promise for a company that,

at the time, had less than ten warehouses.

So Bezos went on a building spree.

♪ ♪ Across the country Amazon

warehouses began to spring up, filled with millions of

products being sold on Bezos's platform.

He'd call them fulfillment centers, and they'd create

hundreds of thousands of jobs in places hard hit by the Great

Recession.

>> Ten percent of Pennsylvania

residents unemployed...

>> Job market is in complete

disarray.

>> NARRATOR: Like Allentown,

Pennsylvania.

>> At that time, it was

tremendous news that an employer was coming and actually opening

a facility and hiring people, versus, you know, gutting half

the staff.

>> NARRATOR: Spencer Soper was a

business reporter for the "Allentown Morning Call" when

Amazon opened in the area in 2010.

He began hearing stories about working in the warehouse.

>> People are basically in this big, sprawling warehouse that's

stocked with goods in very random fashion.

And they have scanners that tell them which things to get.

And people are walking maybe ten, 15 miles a day.

So people just kind of crisscrossing this big warehouse

all day long.

>> NARRATOR: As workers told him

about the punishing pace to meet the daily quota of packages, and

the intense heat, Soper and his colleagues started to

investigate further.

>> People really felt like

Amazon was playing fast and loose with their, with their

health.

>> NARRATOR: Soper discovered

there had been numerous complaints to authorities at the

Occupational Safety and Health Administration, OSHA.

>> They actually had a complaint from an emergency-room doctor

who called their hotline one day saying, "Listen, you might want

to check out this Amazon place.

I've had, like, people parading

through my emergency room to be treated for heat stress."

There was a security guard who worked in the facility who sent

a complaint to OSHA saying that he saw pregnant women suffering

heat stress in-in the facility.

And so there's just, like, these

red flags right and left.

>> NARRATOR: After an

investigation, OSHA said Amazon needed to keep the temperatures

in the warehouses lower.

In a statement at the time, the

company said it installed new industrial air conditioning and

pledged that worker safety was its number-one priority.

>> Amazon is shrewd businesspeople, shrewd

businesspeople know when they have leverage.

And when you're the only shop hiring people in town, you can

push them a lot harder than you can when-when they've got

alternatives.

>> NARRATOR: Over the following

years, Amazon would hire hundreds of thousands of

workers and become one of the largest jobs

creators in the country.

At the fulfillment centers,

Bezos experimented with new techniques and technologies to

boost productivity.

>> Willingness to experiment is

the key to be able to do new things.

So we do, you know, hundreds of experiments every day in our

fulfillment centers to get a little bit better.

Kind of like incremental invention.

♪ ♪ >> NARRATOR: When a company

called Kiva perfected a warehouse robot, Amazon bought

the whole company.

>> Amazon has acquired Kiva

Systems.

They make shipping robots.

>> NARRATOR: It helped transform the work environment in Amazon's

warehouses.

>> When I first showed up at

Amazon in 1999, I led our Global Operations team.

>> NARRATOR: Jeff Wilke created the Amazon fulfillment center

system and is one of two C.E.O.s under Jeff Bezos.

>> As we've added 200,000 robots, in that same time frame

since 2012 we've added 300,000 people in our fulfillment

centers.

So what happens is the robots

change the work, so they allow us... people don't have to walk

as far, which is a complaint that we've heard in the past.

They make the job safer, they make them higher quality,

because we present a smaller set of options to-to employees.

And that's all good for customers, and it's good for

employees too.

>> NARRATOR: But at the same

time, complaints have persisted.

>> People who've worked in

warehouses for decades say, "This is different.

This is not the same."

We're here today because we

want to make sure that these workers know about their rights

in the workplace, especially around heat.

>> NARRATOR: Sheheryar Kaoosji is an advocate for warehouse

workers in the San Bernardino, California, area-- an Amazon

hub, with ten fulfillment centers and over 15,000

employees.

>> Because of the way that

Amazon operates, because of the way that they set their rates

for productivity, it's a lot harder work physically but also

psychologically.

>> NARRATOR: We sat down with a

group in San Bernardino who'd recently worked at Amazon.

>> When they first got here, I thought it was exciting.

Like, for me, I was thinking maybe I could find a-a place

where, you know, I'm going to set roots of a good job, you

know, move up in-in the place.

But after being there for a

while, I was like, "There's no way."

>> It's like, "Okay, this is where I can probably make a

career."

But once you worked there for a

certain amount of time, it's just like, it's just not

realistic, how they expect you to work.

>> NARRATOR: Like dozens of workers we've spoken to around

the country, they say they've struggled to keep up with the

rate Amazon expected them to pick and pack items.

>> How realistic are the rates that they're giving you?

I mean, what's...

>> Not realistic at all.

>> Not-not realistic?

>> No.

There's absolutely no way to make rate, you know, you got to

find little ways to-to cheat it, because once you hit rate,

by the end of the week, they raised it, they bump it up

again.

Because they start seeing, "Hey,

people can hit those rates, can hit those numbers, hey,

let's push them a little harder."

Every week it seemed like it was going up.

♪ ♪ >> You have security cameras

right behind you at all times, that are looking at you

24-seven.

And if you don't meet standards

or the rates, you're out the door, you're just disposable.

>> Every worker has a scanner at all times that basically track

exactly where you're at.

>> And they have a little blue

line at the bottom of the screen, and it has, like, how

many seconds that you have to have it done by the time it hits

zero, and it puts you into panic mode.

>> And pretty much you can't talk to people, you can't be in

the same aisle as them, you just constantly have to sit

there scanning like a robot all day long.

If they catch you not scanning, you get a write-up.

>> And what they're doing is they're producing this mass of

data that they are using to be able to analyze the entire

workforce.

>> We're not treated as human

beings, we're not even treated as robots.

We're treated as part of the data stream.

>> It's the incentive at any warehouse, on any assembly

line, to get the most out of any worker.

>> Yes.

>> To make rates, to-to

be as efficient as possible, to be as productive as possible.

So, I don't see exactly what's different about Amazon as

opposed to any other warehouse.

>> Amazon is the cutting edge.

Other warehouses are starting to adopt these technologies, other

companies are definitely interested in doing what Amazon

is doing.

Data collection could become

basically the standard for all workers, and that there's...

you're never good enough, you're never able to keep up.

♪ ♪ >> NARRATOR: Amazon told us work

rates are not based on individual employee's

performance, and that the scanning devices workers use are

not for tracking people but inventory-- a common practice in

the warehouse industry.

>> We've talked to

workers around the country, both current and former workers.

They've described the pace of work as being really grueling.

In the early thinking about rates and how far you could

push human beings in terms of their productivity, what was the

thinking about that?

>> Well, obviously if the rates

are too high, you're not going to have people showing up for

work.

So, we have 600,000 people at

the company, most of them are in the fulfillment centers, and

they-they come to work every day, they stay for years.

These are considered great jobs in the hundreds of communities

where we have fulfillment centers all over the world,

and in the U.S. we have, almost every state has an operation in

it, and people come to work because these are great jobs.

They're safe, we pay double the minimum wage, the national

minimum wage, we have terrific benefits.

The benefits for the folks that work on the floor are the same

benefits that my family has access to-- our family leave is

like 20 weeks.

So, the rates are set so that we

can accomplish what we need to, which is get orders to customers

in a-a reasonable time and in a high-quality way, and that

creates a workplace that people want to come back to, and they

do.

>> NARRATOR: Amazon wouldn't

tell us how long fulfillment-center workers stay

on the job or how often they're injured.

But workers we spoke to say the rates are higher than other

warehouses-- and that the company rebuffs attempts to

unionize.

>> We do not believe unions are

in the best interest of our customers, our shareholders, or

most importantly, our associates.

>> NARRATOR: This is a clip from a video the company says it

used in the past to teach managers about employees'

rights and labor laws.

>> The most obvious signs would

include use of words associated with unions or union-led

movements like "living wage" or "steward."

>> Early on, Amazon took a position to basically be

anti-union.

Why was that decision made?

>> I don't think we made the decision to be anti-union.

We just feel that all of the things that-that unions

would-would want to-to get us to do, we've already done.

>> What-what about setting rate, though?

Do you not see that there's a little bit more leverage in the

hands of management in this scenario than there would be in

a unionized environment?

>> I don't know, it's hard to

speculate on that, but-but I do think that we have the

obligation to set rates that are, again, going to encourage

people to seek these jobs and deliver for customers, you know,

what we've promised.

>> What would you say to

someone, though, who's, who's worked in-in your fulfillment

centers that feels as though there's been... that-that humans

are increasingly being treated like robots?

'Cause it's something that we've actually heard, and I don't

sense it's hyperbole.

>> Well, that's not the

experience that-that I had in setting it up or that I've

seen.

It's, it's certainly true

that-that these jobs are not for everybody, and there-there may

be people that don't want to do this kind of work.

>> NARRATOR: Amazon executives also stress the company has

become an industry leader in training its workforce for

career advancement.

>> We just announced a pledge

recently to spend $700 million to upskill, which is basically

creating career opportunities for people, 100,000 of our

employees.

We pay 95% of tuition to go

to-to college to get a skill that isn't about Amazon, that's

about creating options for the employees, and I would expect

those people to take advantage of that, work for us for a

couple of years and then go do something that they would much

rather do, and that's okay.

>> There will be people

that will hear what y'all are saying, and they'll say, "Well,

you signed up for physical labor, a job is a job, there

were benefits, and they are now investing $700 million to

do retraining for other types of jobs.

What's the real grievance?

What is there to complain

about?"

>> I actually used to think that

way for a while whenever I, when I first started, whoever I heard

complaints from, I was like, "Well, it was in the job

description, and you signed up for it."

The part they don't talk about is the safety rules that you

have to ignore to make rate.

It's not just you go in, okay,

and you-you do your job, and that's it.

>> So, you're in, you're in a weird bind.

>> It's incredibly hard to meet rate while following all the

safety procedures.

>> A complaint that

we've heard from workers in terms of the sort of automation

of their work as humans, some of them telling us that, yes, there

are high safety standards in these fulfillment centers, but

that in order to make rate, they're having to cheat the

standard a little bit.

>> Well, I would say that's not

okay.

So I, from the moment that I

arrived 20 years ago, I made it very clear to our operations

teams that we will not compromise the safety of our

employees to do anything else.

So, we have, we have a culture

that if-if we are asking people to do something that is, that

they have to do too fast to be safe, they can raise their hand

and say, "This isn't right," and-and we'll fix it.

(phone vibrates) >> NARRATOR: For years, Amazon

has put a happy face on its business and its workforce.

("Give a Little Bit" by Supertramp playing)

>> ♪ Give a little bit Give a little bit of your

love...

♪ >> Even in Amazon's commercials,

the people are almost like shadows and silhouettes.

It's all about boxes, and there's just like happy boxes

singing and bumbling their way to your door, like, oh, no, no.

>> ♪ There's so much that we need.

>> Hello.

>> Hey.

>> They don't want you to even think about how they do this.

They just want you to be wowed and, "Oh, how'd this, how'd this

get here?"

>> ♪ I'll give a little bit of

my love to you.

♪ >> They wanted people to just

think, "Whoa, magic!"

♪ ♪

>> NARRATOR: And magic was a big part of Bezos' marketing

strategy, with an emphasis on the company's miraculous level

of innovation and growth.

>> We started Amazon Prime in

2005, but then something very extraordinary happened.

This.

In 2011, the slope of that graph

changed-- a lot.

>> NARRATOR: As Amazon grew, he

wanted his top executives to think about the kind of company

it was becoming.

He wrote a memo titled,

"Amazon.love."

A copy of it was obtained by

Brad Stone.

>> The memo is another example

of Jeff being very prescient about the future.

It's Jeff grappling with the idea that not all big companies

are loved.

That there is something that we

get uncomfortable with when we talk about very big companies.

"Rudeness is not cool.

Defeating tiny guys is not cool.

Risk taking is cool.

Winning is cool.

Polite is cool.

Defeating bigger, unsympathetic

guys is cool.

Inventing is cool.

Explorers are cool.

Conquerors are not cool."

>> Some businesses, you can tell when you go in and have

meetings with them, they have a conqueror mentality.

And there's a big difference between being a conqueror and

being an explorer.

And I think in, you know, this

very inventive space that we're in, it pays to explore.

♪ ♪ >> NARRATOR: But to some

watching Amazon's growth, the company was falling short of

that ideal, and taking steps to make sure nothing got in its

way.

♪ ♪

In 2013, Amazon was moving to create its own delivery system

and made a key decision: rather than hire its own drivers, it

built a network of independent businesses to deliver packages.

>> They weren't just going to dabble here and dabble there.

They were going to go and create a system that would rival

FedEx or UPS.

>> NARRATOR: ProPublica reporter

Patricia Callahan, in conjunction with Buzzfeed, has

investigated the system Amazon set up.

>> They figured out a way to get around regulation.

The cargo vans they choose are big enough to stuff with

hundreds of Amazon packages, but they're small enough that

they're not regulated by the federal government.

>> An 84-year-old woman struck and killed by an Amazon

delivery truck.

>> A woman hit and killed in a

parking lot.

>> NARRATOR: ProPublica and

Buzzfeed found that drivers are under intense pressure to

deliver packages.

>> After striking him, the

van maneuvered around Salinas and his dog.

>> NARRATOR: And they documented more than 60 crashes, including

13 deaths, since 2015.

>> An infant critically injured

in a car crash has died.

>> When it came time to figure

out who's responsible, Amazon would always say, "It's a

contractor, it's not our responsibility."

>> Now you've been able to find 13 deaths.

And that's over the course of several years.

Is that statistically significant given all of the

packages that they deliver in any day or any given year?

>> I don't pretend to claim that there's only 13 deaths and

that I found every single one.

I just found enough to show that

this is happening around the country.

With UPS, there's a record.

There's a federal record you can

look at how many serious injury and fatal accidents they have.

With Amazon, that doesn't exist.

No one knows the safety records

of all of Amazons contractors.

>> NARRATOR: Amazon disputed the

ProPublica report.

It would not release any data on

crashes involving its driver network 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, so just as we were focused on safety in the

fulfillment centers and product safety, we are... 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 the drive, we

have mapping software that we use to help them find the right

routes.

Every one of our drivers is

required, including the third parties, are required to have

comprehensive insurance, including liability insurance,

so that if there is an accident that the person who's injured is

covered.

>> Amazon wants to get Prime

members their packages even faster...

>> NARRATOR: In the last year, Amazon announced a change to the

way it handles Prime deliveries.

Instead of delivering packages

in two days, they promised to do it in one.

>> Free next-day delivery all across the U.S....

>> It's impossible for me to imagine a world 20 years from

now where a customer comes up to me and says, "Jeff, I love

Amazon.

I just wish your prices were a

little higher."

Or, "I love Amazon.

I just wish you delivered a little more slowly."

>> NARRATOR: At the same time the delivery network was being

set up, Amazon was also rapidly expanding its product offerings,

inviting more sellers onto the site.

(computer plays tune) Including those from China.

>> It basically makes it to where it's super-easy for these

companies, who are maybe not as careful with adhering to

the law, where they're able to just start a business up on

Amazon, import some stuff, sell it, cause some problems, and

then disappear.

>> NARRATOR: Rachel Greer worked

in product safety at Amazon, and worried that the site was being

flooded with untested and potentially unsafe products.

>> Are there proper warnings?

Has it been safety-tested for

durability?

If a child chews on it, will

the paint come off?

Is that paint leaded?

>> Most people would assume that there's a pretty

high safety standard on Amazon.

>> And that assumption would be

incorrect.

>> 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

at Target, a consumer can sue Walmart or Target.

>> Right, 'cause no one's forcing you, when you come

into Walmart, to enter the doors of Walmart.

They aren't making you sign away your rights.

>> But when do you sign that when you go on 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's on the hook

when a customer buys a dangerous product on Amazon?

Who takes ultimate responsibility for that?

>> Well, in the rare case where that, where something like that

happens, if it's a third-party seller, the sale is by a

third-party seller, and it is the seller's responsibility to,

to sell a legitimate product to a customer, and then, when

Amazon is the retailer, and we sell a product to the, to a

customer, then it's our obligation to make sure that we

understand the manufacturer and the supply chain for that

product and its, and its safety.

>> But when the other

sellers are selling in your store, you're not responsible

for it ultimately, if they're selling your customer a

defective or dangerous product?

>> I think the way things work

in the U.S. is that the seller of record is the person who is

setting the price and who is purchasing the product, and for

things not sold by Amazon-- and it says on the detail page,

it'll tell you who the seller is-- it's the seller's

responsibility for those things, and for us, it's very clear.

It says Amazon.com whenever we sell it.

>> Do you audit your sellers in terms of whether

they're actually providing safe products to your customers?

>> We do...

You know, some of our sales...

So about, almost 60% of our sales are by third parties,

and those sales, some of them come directly from the third

party, so we're not involved at all.

>> But you take a cut.

I mean, it's on your

infrastructure, it goes through Amazon.com, so, I mean...

>> Well, it's on our infrastructure in terms of the

website and payments, but we're not...

>> And fees that, you know, you're taking a cut 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 they would pay that fee, but...

It's harder to, before an experience, inspect that, that

product.

>> A South Carolina woman who

bought a hair dryer on Amazon said this happened.

>> Fire is coming out of the hair dryer.

>> NARRATOR: Amazon's approach has had consequences.

>> A hoverboard caused a fire that destroyed their home.

>> NARRATOR: Dangerous products were flagged by authorities in

Washington State.

>> ...found dozens of school

supplies that had high levels of toxic metals.

>> NARRATOR: And a recent report found thousands of banned,

unsafe, or mislabeled products.

>> I'm having a hard time

understanding something, which is that, that...

You know, Amazon's entire brand is about the customer, right?

>> Yes.

>> That it's...

>> Oh, I reminded them of this over and over again.

>> You reminded them of what?

>> I said that no customer wants to buy an unsafe product.

No customer wants selection that harms their child.

No customer wants to buy something that burns down their

house because it looks cool and it's the latest, coolest thing.

>> Sitting here today, are you able to basically say

that the products that you sell on Amazon.com are safe?

>> What I can say is, we work really hard to make sure that

they're safe.

We have...

We've spent $400 million in the last year on systems that seek

out things that are not safe, and, you know, there are

millions of sellers and hundreds of millions of products, and

our job is to, as fast as we can, weed out the ones that

don't belong on our site.

We're going to have to be

vigilant as a retailer and as a technology company, and we are

definitely dedicated to, to protecting the safety of our

customers.

>> NARRATOR: We heard that

concern for the customer over and over in our interviews with

Amazon executives.

>> Customer trust in a company

like Amazon, it's sort of foundational.

>> Customer obsession is the first leadership principle, and

it, it's not a corporate slogan.

>> We try to stay really focused

on customers.

>> Very focused on, on

delivering results for our customers.

>> Providing 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 sort of that there's two

fundamental philosophies of antitrust, of anti-monopoly law.

You know, there's the traditional philosophy, in which

you, you want to break up all potential concentrations of

power that you can.

But for the last 30 years,

there's been this change in how we do antitrust.

And this is the idea that the only purpose of antitrust should

be to drive prices lower, to serve the interest of the

consumer.

>> NARRATOR: Lynn had been

urging regulators to take a more traditional approach and

examine whether the company was gaining market power in

exploitative ways: stifling fair competition, but keeping prices

low for consumers.

>> We live in a society

of consumers, though, and seemingly there is 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 to... for all people if

we can drive down prices, if we have lower-priced drugs, if we

have books that anybody could buy.

That's a good thing.

It's a good thing for society,

and it's a good thing for us as consumers.

But we're not only consumers, we're also citizens.

We're also producers.

We're also people who think and

who make things and who grow things, and we want to have

access to open markets.

>> NARRATOR: Once again, the

tension was most pronounced with book publishers.

Amazon was selling around 40% of all new books in America

and two-thirds of all electronic books, thanks to the success of

the Kindle.

Then, one of the world's largest

publishers, Hachette, decided to push back.

Franklin Foer was one of its authors.

>> Hachette and Amazon set out to renegotiate their e-book

contract.

And Hachette said, "No, we don't

accept the terms of your contract."

And Amazon basically said, "To hell with you, Hachette.

We're going to stop delivering your books.

If somebody searches for a Hachette title, we're going to

redirect them to another publisher."

>> Amazon's battle with Hachette and the authors that Hachette

publishes is heating up.

>> NARRATOR: As Bezos's virtual

blockade dragged 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 50%

to 90% of their sales from Amazon.

It was absolutely devastating to first-time authors.

It actually destroyed their careers.

>> Did you see your sales plummet?

>> I did, yes.

I saw my sales plummet

tremendously.

>> NARRATOR: In frustration,

Preston penned an open letter on behalf of all 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 right.

>> Amazon has been accused of doing everything from raising

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 it out of all the ways in which Amazon was

bullying the publishing industry.

>> The Department of Justice listened to us.

And their answer was essentially this: "Amazon is one of the most

popular companies in the country.

(camera clicks) They have brought tremendous

services to consumers, and they've brought lower prices."

And that we hadn't given them any kind of reason to open an

antitrust investigation.

>> NARRATOR: Eventually,

Hachette and Amazon would settle their dispute, with

Amazon allowing Hachette to set its own prices for e-books, but

offering it incentives to keep them low.

>> It's great to be here at Amazon.

(crowd cheering) >> NARRATOR: Amazon would thrive

during the Obama years, and eventually account for nearly

40% of all online commerce in the country.

>> Last year, during the busiest day of the Christmas rush,

customers around the world ordered more than 300 items from

Amazon every second.

>> NARRATOR: But the complaints

about its tactics would continue, with retailers of all

kinds concerned that Amazon had become the online-shopping

gatekeeper.

>> You've got to be on Amazon.

You have to be there, because that's where everyone is.

That...

100 million Prime subscribers.

They are the de facto e-commerce channel in the United States,

period, end of list.

>> Amazon executives

have told us that there are many other options out there.

There is Walmart, there is Alibaba.

As a seller, you've got options.

>> I've heard that response from

Amazon executives before, and we did that, we were listed, we

listed all of our products on every other online marketplace.

But it's a testament to just how good Amazon is.

All of the others that were non-Amazon combined did about

ten percent of what we were doing on Amazon.

>> NARRATOR: Businesses big and small have been accumulating

complaints about Amazon's hold on them.

>> On Amazon, the customer belongs to Amazon-- it doesn't

belong to the third-party seller.

You're basically renting the Amazon customer.

>> NARRATOR: James Thomson used to recruit brands to come onto

Amazon and now advises them on how to do business with the

company.

>> I represent brands today that

face a number of challenges with Amazon.

>> NARRATOR: Among those challenges, businesses say that

Amazon has access to their valuable data, which gives it an

unfair advantage.

They also complain about

increasingly higher fees to stay on the platform, and pressure to

use Amazon's warehouses and shipping services.

We spoke to numerous name-brand companies, but none would share

its grievances on camera.

>> My account was suspended.

>> NARRATOR: Some small businesspeople have been

talking about their experiences-- good and bad--

online.

>> When you're selling on

Amazon, you're playing in someone else's playground.

>> Who gets placed where, whether or not your product

shows up in the search results...

>> They suspended my account without warning.

>> These are all things that are governed by Amazon's rules.

And if there's a dispute within that arena, if you feel you are

mistreated, you know, the judge and jury is Amazon.

>> They don't care, they'll just kill your account like that or

suspend it...

>> There are all sorts of crazy

stories about why people get their accounts shut down on

Amazon.

And it could take a week, it

could take months, it could be never before you're back online

again.

Amazon has the upper hand and

the ability to basically take your business away from you at

any given moment.

>> Selling on Amazon, take one.

>> NARRATOR: Amazon said third-party sellers account for

more than half of everything sold on the site.

>> I sell mini-longboard skateboards.

>> I sell mineral water.

This is what I do.

>> NARRATOR: And it's committed to its sellers'

success-- proactively contacting them when their accounts are at

risk of suspension and offering an appeals process to resolve

disputes.

>> You already have great

products.

Scale up...

>> NARRATOR: But in the eyes of some businesses, Amazon has

essentially become like the railroads at the turn of the

last century that controlled the flow of commerce across the

country.

>> Start selling today.

>> Do you see yourself as being kind of like the rails

for e-commerce, that sellers bring their goods to market

on your rails, through your marketplace?

>> I don't think of it that way, and here's why: the, the vast

majority of stuff that's...

Well, all of the stuff that's

sold is manufactured, right?

So it's manufactured, meaning

there are brands and factories that produce stuff and then sell

it.

We're one percent of the retail

sales in the world, about.

>> Well, you are the

biggest marketplace online, right?

>> No, so, again, I, I don't...

The idea that there's an online,

distinct for brands to sell their stuff and distinct from

physical, just doesn't make sense to me, and we're far from

the largest retailer.

So, I, I describe this as

retail, and we're competing against Walmart and Target and

Costco and Carrefour and Alibaba and Tmall and all kinds of folks

who are, are now selling both physical stores and online.

>> NARRATOR: In addition to pointing to other large

retailers, inside the company employees have been

schooled in how to talk about its size and power.

>> When I worked at Amazon, we had training specifically on the

use of terms like "monopoly."

We were not allowed to use a

term like "market share."

Amazon has what's known as

"market segment share."

What is market segment?

What is market segment share?

I don't know, but I know that

the lawyers at Amazon feel those terms are, are much safer than

using terms like market share.

>> So market share was

something they were really concerned about.

>> Clearly somebody with the necessary legal training or PR

training recognized that Amazon was growing very quickly, and

when we were asked to use the term "market segment" and

"market segment share," in essence it's a polite way of

saying, "I'm not going to talk to you about how big we are."

>> NARRATOR: Since leaving Amazon 20 years ago, Shel

Kaphan has been watching the company with increasing

concern, and he's speaking about it for the first time.

>> I think that the characterization of Amazon as

being a ruthless competitor is true, and under the flag of

customer obsession, they can do a lot of things which might not

be good for people who aren't their customers.

>> I know you're not a legal scholar, but are you

basically concerned that Amazon is a monopoly?

>> I'm, I'm concerned that it has that type of power.

I think it, you know, whether you technically can call it a

monopoly or not, I don't know.

♪ ♪

>> NARRATOR: That question has continued to loom over Amazon.

>> I think that Amazon is looking out, and the existential

threat that they may face is going to be from government.

It's whether or not policymakers are going to step

in and intervene and say, "You have too much power."

>> NARRATOR: For years, Bezos has been ramping up Amazon's

profile in Washington.

>> Amazon has been lobbying the

F.A.A. to lift...

>> Trying to cozy up to

politicians, so that they will give him the biggest tax breaks

around...

>> NARRATOR: Spending millions a

year on lobbying.

>> Amazon lobbied more

government entities than any other tech company.

>> NARRATOR: And hiring as its spokesman the former White House

press secretary Jay Carney.

>> You've got an army of

lobbyists, many of whom have revolved in and out of

government, including yourself.

What are you hoping to get for

all that lobbying spend and all that influence?

>> One of the things we discovered is, because of the

visibility of our company, but also the range of businesses

that we're in, we need subject-matter experts on food

safety, on transportation, on drones, on privacy.

And also, we can be a resource, an information provider to

policymakers and regulators.

It's not lobbying in the

traditional sense, in terms of trying to persuade somebody to

do something, it's just answering questions and, and

providing data and information.

>> NARRATOR: Bezos himself would

also become a presence in the capital, and eventually buy the

largest private residence in town.

>> Jeff Bezos never really showed much interest in

politics, but as he's cemented himself in the city, he's

started to acquire this physical presence.

He bought a mansion, then developed it into a place that

is explicitly designed to be social.

>> It has a big ballroom, I mean, it is designed to create a

real presence for him in the nation's capital, where he can

hobnob with the people who make decisions.

>> NARRATOR: He'd even bought the hometown newspaper...

>> Jeff Bezos sent a thunderbolt through the media world this

week...

>> NARRATOR: Spending a quarter

of a billion dollars to rescue the struggling "Washington

Post."

>> I do believe that democracy

dies in darkness.

I think that the capital city

of the United States of America needs a paper like "The

Washington Post."

>> I got to say, you know, full

credit to him, he hasn't intervened in any of the

coverage of the paper.

And he's invested in the paper.

Every dollar of profit that the paper makes is plowed back into

making it a better paper.

>> Bezos allowed the "Post" to

hire, to restock its newsroom, he reversed what had been an

atmosphere of sort of decline.

I'd say "The Washington Post"

has really flourished under, under Bezos's ownership.

>> Let's cut this digital ribbon.

>> NARRATOR: At the time, critics saw a more cynical

motive.

>> Perhaps he's buying "The

Washington Post" to buy some sort of protection.

>> Precisely.

>> This deal could give him more

influence over politics.

>> Nobody hangs out in

Washington, DC, just to go to the free museums.

You buy a home in Washington, you buy a newspaper in

Washington, because it is the most influential city in the

world, and you want to lay your hands on that power.

♪ ♪ >> NARRATOR: Bezos saw a

business opportunity there, as well.

The Obama administration planned to modernize the federal

government by embracing cloud computing.

Bezos had been quietly building a revolutionary cloud computing

business.

He called it Amazon Web

Services.

>> It's basically computing

power in the cloud, but really it's Amazon's server farms

around the world that give people access to the kind of

technology services they need.

>> NARRATOR: To keep Amazon

running, Bezos had developed an unprecedented digital

infrastructure.

He realized he could rent parts

of it out, not just to businesses, but also to the

government.

>> Our infrastructure is built

to satisfy the security standards of the most

risk-sensitive organizations.

>> He's already got a huge edge

over the other big competitors in it.

So he wants to take that lead and capture the U.S. government.

>> NARRATOR: In 2013, he got a major boost when it was

revealed that Amazon Web Services had designed a

computing cloud for the C.I.A.

>> Amazon Web Services was

awarded a ten-year contract for $600 million.

>> Amazon is helping the C.I.A. build a secure cloud computer

network...

>> The C.I.A. contract was

probably one of the best things that happened to Amazon's cloud

business.

It lifted all doubts about the

security of the cloud and on whether you could trust Amazon

with your most precious data.

>> The message to the world is,

"If the C.I.A. trusts Amazon with its data, then maybe other

companies and government institutions can, as well."

>> NARRATOR: And they did.

>> Experience it with Expedia.

>> NARRATOR: A.W.S. became by far the world's leading

cloud-computing platform.

>> On CBS.

>> NARRATOR: Today, more than a million businesses, as well as

PBS, pay Amazon to store and manage their data.

>> NARRATOR: Bezos had again anticipated the next frontier in

technology, and had made himself indispensable to it.

>> What Jeff Bezos is after is really creating a company that

is the infrastructure, that owns the infrastructure for how

commerce is done.

And that's an incredibly

powerful place to be.

♪ ♪

>> Please welcome chief executive officer of Amazon Web

Services Andy Jassy.

>> NARRATOR: Andy Jassy created

and runs A.W.S.

He credits the service with

making it easier to do business and sparking innovation

throughout the economy.

>> Look at what A.W.S. has

enabled with regard to change in our society.

Look at, Netflix changed the way that we consume digital content,

and Airbnb changed the way that we get accommodations, and Hola

and Grab and Lyft and Uber changed the way that we get

transportation.

A.W.S. has enabled, has been a

part of enabling all these huge innovations and changes in

consumer experiences that have, have made life better for

people.

>> And we're the cloud with the

most capabilities, the most innovation, the most customers.

>> NARRATOR: The division generated $35 billion in sales

last year.

>> Amazon Web Services.

>> Yes!

>> Build On.

>> NARRATOR: The success of A.W.S. gave Bezos billions to

expand Amazon from a company that sells everything to a

company that does everything.

A top priority...

>> To boldly go where no man has gone before.

>> NARRATOR: ...was to create the sci-fi future he'd fallen in

love with as a child.

>> Gentlemen, this computer has

an auditory sensor.

It can, in effect, hear sounds.

>> NARRATOR: A world of artificial intelligence, in

which computers can think and make decisions for humans and

about humans.

>> Jeff Bezos is a big fan

of "Star Trek."

He, he admits that that was on

his brain when he came up with the idea that Amazon should be

pursuing a little disk that you can bark commands into.

>> Stop.

>> This is his "Beam me up,

Scotty" fantasy realized.

>> We started working on this

device.

And our, our vision was, in the

long term, it would become the Star Trek computer.

>> When it first arrived from Amazon, I didn't know what it

was.

>> NARRATOR: In 2014, Bezos's

talking computer, the Amazon Echo, hit the market.

>> Is it for me?

>> It's for everyone.

>> NARRATOR: The voice known as Alexa would embed Amazon deeper

into the lives of millions of people.

>> Alexa, what do you do?

>> I can play music, answer

questions, get the news and weather.

>> They call it a personal assistant, and just that term

implies this intimate connection that we then begin to develop

with Amazon.

>> Alexa, sing the ABC song.

>> ♪ A, B, C, D, E, F...

♪ >> I believe that when we think

about the future and the future with artificial intelligence,

given where we currently are today, Alexa in some ways

represents the moment that it becomes seamlessly interwoven

with our lives.

>> Alexa, how many teaspoons are

in a tablespoon?

>> One tablespoon equals three

teaspoons.

>> Oh, okay.

>> And the problem is that we forget that it's there.

>> Alexa, lights on.

>> Okay.

>> NARRATOR: But Alexa is also listening-- and she's learning.

>> I'm answering questions and learning more.

>> NARRATOR: And that helps Amazon in the race to dominate

artificial intelligence.

>> Alexa...

>> Every time you ask Alexa something, you're making the

Alexa algorithm better.

It's one of the reasons why

Amazon, having had a head start, is able to kind of preserve that

head start, because they've got the most data of anyone.

>> Alexa is one more way for Amazon to gather extremely

valuable data.

And this data collection is

extremely important to this business model.

It's extremely hard to do, and, you know, convincing people to

just deploy something like this in their home is a brilliant

trick.

>> NARRATOR: Dave Limp is

Amazon's head of devices.

>> How is it that you

convinced tens of millions of people to put what is

essentially a, a listening device in their homes?

>> Well, I, I would first disagree with the premise.

It doesn't, it's not a listening device.

The, the device in its core is...

It has a detector on it.

We call it internally a

"wake-word engine."

And that detector is

listening-- not really listening-- it's detecting one

thing and one thing only, which is the word you've said that you

want to get the attention of that Echo.

>> NARRATOR: Once the device is awake and the blue light is on,

it's recording.

And last year, it was revealed

that Amazon employs thousands of people around the world to

listen and transcribe some of those recordings to help train

the system.

>> Do you think that you

did a good enough job of disclosing that to consumers?

That, that there are humans involved in listening to these

recordings?

>> We, we try to articulate what

we're doing with our products as clearly as we can.

But if I could go back in time, and I could be more clear, and

the team could be more clear, on how we were using human beings

to annotate a small percentage of the data, I would, for sure.

What I would say, though, is that once we realized that

customers didn't clearly understand this, and within a

couple of days, we added an opt-out feature, so that

customers could turn off annotation if they, if they so

chose.

And then within a month or two

later, we allowed people to auto-delete data, which they

also asked for within that, within that time frame.

You know, we're not going to always be perfect, but when we

make mistakes, I think the key is that we correct them very

quickly on behalf of customers.

>> NARRATOR: But even one of the

founders of Amazon Web Services approaches his Alexa devices

with caution.

>> When do you turn off

your Alexa?

>> I turn off my Alexa when I

know for a fact that the conversation that I am going to

have, or, or whenever I just want to have a private moment.

I don't want certain conversations to be heard by

humans, conversations that I know for a fact are not things

that should not be shared, then I actually turn off those

particular listening devices.

>> We have had an incredible

year.

The team has invented a lot on

behalf of customers, and I cannot wait to show you what we

have.

>> NARRATOR: So far, Limp and

his team have made Alexa compatible with more than

100,000 products.

>> Echo Frames allow you to get

done more around you and be more present in the everyday.

>> Now they're going to know more about you than anyone

knows.

They're trying to move as

intimately as possible and as quietly as possible into

everyday life.

>> Echo Loop is a smart ring,

packed with ways to stay on top of your day.

>> Amazon wants to have the entire environment essentially

miked.

>> Alexa, start my running

playlist.

>> They want your walk in the

park, they want your run down the city street.

>> Nationwide's teamed up with Amazon to bring you the all-new

Echo Auto.

>> They want what you do in your

car, they want what you do in your home.

>> Amazon Smart Oven.

>> Alexa, bake for 30 minutes at

350 degrees.

(oven beeps)

>> All these intimacies, all this insight is being

integrated, analyzed and integrated.

>> Alexa, alarm off.

>> That is an extraordinary kind

of power that has never before existed.

>> NARRATOR: After Alexa, Amazon would go on to spend nearly a

billion dollars to buy Ring...

>> Hey, bud, the police are on

the way.

>> NARRATOR: A doorbell camera

and app that Amazon describes as "the new neighborhood watch."

>> Hey, get away!

>> Get out of there!

>> NARRATOR: To promote it, Amazon has enlisted the help of

hundreds of local police departments.

>> It's a phenomenal tool to assist detectives.

>> NARRATOR: They give them access to a portal to request

footage and have given free cameras to hand out-- and

talking points.

>> This system is so simple to

use...

>> You have Amazon in

partnership with police departments, who have basically

turned policemen into, like, Avon salespeople for Amazon

Ring.

They have given police

departments talking points and marketing materials to encourage

the installation of Ring by community residents.

None of this was public knowledge.

>> And this is Ring's first indoor cam.

It is... cute, is what I would say.

>> NARRATOR: Amazon has continued to expand the scope

of Ring.

Last fall, Dave Limp unveiled a

version designed to monitor the inside of people's homes.

Within weeks, hackers discovered a way to terrorize Ring

customers.

>> Did you see that

video?

>> I did see that video.

>> What did you think of it?

>> I think that that is a industry problem.

It's not just about the, a Ring camera-- it could be about

anybody's cameras.

It's about any device in that...

And we've already investigated that one to make sure what, what

the root cause was.

What we want to be able to do

in those cases is, we want to minimize them.

We'd like to detect them.

And we also want to build tools

that give them the ability so that doesn't... that, that makes

it harder for those kinds of attacks to happen.

There's a lot of bad people in this world.

>> Here's a device that you had described as cute and

seems harmless, and I'm just wondering whether you're being

straight with people about the attendant risks to your

customers that you are obsessed with, supposedly.

>> Well, it's not supposedly, we are obsessed with customers.

I, I would say that we are trying to build security

features at every level of the stack: operating systems,

authentication, fraud detection.

We offer things that customers

can turn on that make it even, make it even harder for those

attacks to happen.

>> Yo, what's up, how's your

day?

>> Who is that?

>> What's going on, buddy?

What are you watching?

>> NARRATOR: There were a series of similar attacks across the

country.

>> What's up, homie?

I still see you.

>> You hungry?

>> What's going on, my main man Shaq?

>> NARRATOR: And it's not just hackers.

Ring has fired some of its own employees for spying on

customers.

>> In George Orwell's

"1984," he describes a dystopia in which, "You had to live, you

did live from habit that became instinct in the assumption that

every sound you made was overheard."

And I wonder if you ever think about how easily this could

become dystopian to some degree?

>> Well, I don't want to live in

that world.

So, I do not want to invent the

technology that, or have my teams invent the technology that

would create that world.

And so... but I am an optimist.

I, I think if you take the, the absolute view of that, we

wouldn't invent anything.

>> We're increasingly

living in a world in which your products and your designs are

there.

Do, can you see how it could be

concerning in some ways that we all can't opt out of that world

at this point?

>> Oh, sure, I can see why it

could be concerning to some customers.

Our job in building that technology is to build it in

such a way that it, that it takes into account for the

scenarios that you just talked about, as best as we possibly

can.

You know, the, the reality of it

is, that world happened way before Ring or Alexa.

♪ ♪ >> NARRATOR: That's something

that Bezos himself wrestled with 20 years ago.

>> I believe that privacy is going to be one of the prominent

issues of the 21st century.

The thing is, there are towns

now in the United States that have installed security cameras

on every corner, and their crime rates decreased by 80%,

but do you really want cameras on every corner?

There are very strange things that are going to happen over

the next 100 years with respect to technology that are going to

challenge us as a society to figure out how we want to deal

with privacy.

>> NARRATOR: Decades later,

Bezos would be at the vanguard of expanding the use of that

kind of technology.

>> Introducing Amazon

Rekognition Video.

>> Rekognition allows you to

pass an image to us.

You can say, "Do these two faces

match?"

Which is incredibly useful for

applications in the security space.

You can imagine...

>> NARRATOR: After Amazon rolled

out a facial recognition tool, it marketed it to law

enforcement.

>> Recognize and track persons

of interest from a collection of tens of millions of faces.

>> NARRATOR: Police we've spoken to say it's a valuable tool to

identify suspects quickly.

>> ...appears to be a match, but

I'm gonna make sure I look at them all.

>> NARRATOR: And while Amazon has offered guidelines for how

it should be used, there are few laws governing the use of this

technology.

>> It returns anybody with

warrants that look like her.

>> NARRATOR: Civil liberties

advocates have raised concerns, as have computer scientists, who

worry Amazon has released the software before it's ready, and

that police are essentially field-testing it on the public

on behalf of the company.

>> The tools are not what I call

battle-tested.

And we still do not understand

how well they work in the environments in which they'll be

applied.

That's where I see a danger.

>> NARRATOR: Anima Anandkumar was the principal scientist for

artificial intelligence at Amazon.

In her first interview about her concerns she told us she was

particularly alarmed by an M.I.T. study that found the

software prone to mistakes with darker-skinned faces.

Amazon has questioned the study's methodology.

>> As a researcher in A.I., I feel it's my personal

responsibility to educate the public of where A.I. truly is

today, right?

Because they hear so much of

A.I. being hyped up, you know, it's supposed to be magical,

it's supposed to solve all the world's problems.

I see the potential in doing that, but at the same time we

need a reality check.

We need to ask, where is A.I.

today?

What can it truly do well?

>> And when it comes to facial recognition, you don't

think it's ready for primetime.

>> I don't think face

recognition is ready for primetime in challenging

applications like law enforcement.

>> NARRATOR: Anandkumar and other scientists have asked

Amazon to stop selling Rekognition to law enforcement

because they say the system's accuracy is still in question,

and there are no clear regulations about how it's used.

We asked Andy Jassy about it.

>> I have a different view, and

we've spent...

We've had the facial

recognition technology out for use for over two-and-a-half

years now.

And in those two-and-a-half

years, we've never had any reported misuse of law

enforcement using the facial recognition technology and, you

know, I think a lot of societal good is already being done with

facial recognition technology.

Already, you've seen hundreds of

missing kids reunited with their parents, and hundreds of human

trafficking victims saved, and all kinds of security and

identity and education uses, so there's a lot of good that's

been done with it.

But I also understand that it

could be misused.

And I think at the end of the

day with any technology, whether you're talking about facial

recognition technology or anything else, the people that

use the technology have to be responsible for it, and if they

use it irresponsibly, they have to be held accountable.

>> There's been all sorts of problems with policing

in this country.

So why allow police departments

to experiment?

>> We believe that governments

and the organizations that are charged with keeping our

communities safe have to have access to the most

sophisticated, modern technology that exists.

We don't have a large number of police departments that are

using our facial recognition technology, and as I said,

we've never received any complaints of misuse.

Let's see if somehow they abuse the technology.

They haven't done that, and to assume that they're gonna do it

and therefore you shouldn't allow them to have access to the

most sophisticated technology out there, doesn't feel like the

right balance to me.

>> It's been difficult

to even know how many police departments are using the facial

recognition technology, and there's no public auditing to

know whether there are complaints about abuse.

How would the public ever know?

>> You know, again, I don't

think we know the total number of police departments that are

using facial recognition technology.

I mean, there's, you can use any number-- we have 165 services in

our technology infrastructure platform, and you can use them

in whatever conjunction, any combination that you want.

We know of some, and the vast majority of those that are using

it are using it according to the guidance that we've prescribed.

And when they're not, we have conversations, and if we find

that they're using it in some irresponsible way, we won't

allow them to use the service and the platform.

♪ ♪ >> NARRATOR: Andy Jassy and Jeff

Bezos have said they want governments to hurry up and

regulate how law enforcement can use facial recognition.

But in the meantime, Amazon has forged ahead, and has even

discussed its services with Immigration and Customs

Enforcement.

>> At Amazon Web Services...

>> NARRATOR: And the U.S. military.

>> ...partner community to deliver for our warfighters and

defense leaders for when it matters most.

>> NARRATOR: Bezos himself has made it clear that he sees

Amazon playing a critical role in national security, as well as

in commerce.

>> We are going to continue to

support the D.O.D., and I think we should.

And if big tech companies are gonna turn their back on the

U.S. Department of Defense, this country is gonna be in trouble.

>> NARRATOR: As Amazon has revolutionized one industry

after another, Jeff Bezos's reputation has grown to mythic

proportions.

>> You've called what Jeff Bezos

has built a miracle.

>> Absolute miracle.

I wish I could give him a blood test or something so I could

pick it out, but...

>> You want to clone him?

>> No, I want a transfusion, actually.

>> Amazon is now worth $1 trillion...

>> NARRATOR: His every move moves the markets.

>> Amazon Advertising is just on fire.

>> NARRATOR: Starting a digital advertising business to rival

Facebook and Google.

>> Some breaking news on Whole

Foods...

>> Holy cow.

>> Jim, I heard you gasp just now.

>> Holy cow, this is such a game-changer.

>> NARRATOR: Buying the grocery chain Whole Foods.

>> In a record-breaking deal, Amazon is buying Whole Foods for

$13.7 billion.

>> The day the acquisition was

announced, the nation's largest grocery company lost billions of

dollars because Amazon acquired a company one-12th the size.

>> Everybody thinks Bezos is the smartest person in the world and

he's gonna come and crush me.

>> When Amazon announced the

acquisition of Pill Pack...

>> News of the deal sent

shockwaves through an industry...

>> The retail pharmacy sector shed billions of dollars.

>> Look at this story-- three titans of industry...

>> When Amazon was mentioned in a press release with Berkshire

Hathaway and JP Morgan saying they were looking at healthcare

costs-- no detail in what that meant...

>> Healthcare companies are panicked about Amazon's

forthcoming entry into the healthcare market.

>> On the opening bell the next morning, the healthcare

industry's largest players shed billions of dollars.

>> And insurance stocks are down after Amazon announced a

healthcare partnership with Berkshire Hathaway and JP Morgan

Chase.

>> Bezos basically wants to own

the whole economy, right?

>> You think he will.

>> I kind of think he will.

I kinda think that in, like, ten

years Jeff Bezos owns every single thing there is.

>> So Amazon has these Darth Vader-like abilities to just

look at a sector and begin choking it of oxygen without

even touching it.

Amazon can begin beating

competitors without even competing.

>> You actually think that Amazon is having a negative

effect on competition in the innovation economy right now?

>> I think it's a mixed bag, I think that you could argue, and

there's evidence that they have inspired innovation in certain

sectors.

But I think there's a lot of

small companies that aren't being formed, because if you go

in to try and raise money for an e-commerce company, it's,

"Well, how are we going to compete against Amazon?"

And I say, "Well, the answer can be summarized in one word:

impossible."

>> All right, let's move some

earth.

>> Every single area that he

enters into, he manages to succeed in a fairly major way.

(crowd cheering) >> We've had another great Prime

Day.

>> We've never seen anything

like a company that is so integrated into the fabric of

existence, so, you know, at a certain point, it becomes

unavoidable.

>> Amazon just yesterday said...

>> Bezos would even extend his reach into the heart of popular

culture.

>> Can you imagine Macy's

starting a media company?

We couldn't even imagine that.

But Amazon does it, and people take it seriously.

(explosion echoes) (people screaming)

>> NARRATOR: Amazon is investing billions in new shows and

movies.

>> Oh.

Hi.

>> Hey.

>> NARRATOR: And on beefing up its streaming service, which

streams around four times as many movies as Netflix, Major

>> NARRATOR: And on beefing up its streaming service, which

streams four times as many movies as Netflix, Major

League Baseball, and PBS shows like this one.

(audience applauding) >> And the Golden Globe goes

to...

"Transparent."

Amazon Instant Video.

>> I want to thank Amazon, Jeff

Bezos.

>> To Amazon, my new best...

friend.

(audience laughing)

>> Bezos likes to joke about how, every time he wins a Golden

Globe... >> ...it helps us sell more

shoes.

And it does that in a very

direct way, because when people... if you look at Prime

members, they, they buy more on Amazon than non-Prime members,

and one of the reasons they do that is, once they've paid their

annual fee, they're looking