It is a ground breaking company, it is a bookstore that is mega mega like few other companies are. It is a bookstore that is a huge corporation. Think about that for a second. Think about bookstores in the old days then think about this thing, Amazon Dot Com. A bookstore that is leading the way in mega cloud computing. It has one of the most effective ways ever of interfacing with its customers. It has become the go to place for many people for the purchase of almost anything one can imagine being delivered by mail. Amazon Dot Com is a thing the likes of which we have not seen before.

You all know about the #AmazonFail maneno1. I suspect that most of what you know is slightly incorrect. I have read three or four blog posts about it, and not long ago I listened to a current NPR report. They neither jibe nor jive. I suspect as more details come out this will be a two part story: A serious socio-political screwup followed by a “glitch” of very significant proportions. I could be wrong about that, but we shall see.

(Here is a very insightful commentary on the situation giving details and links.)

What is important here is this: Whatever rules you were thinking may apply to the conduct of a large corporation and how they must interface with the rest of society do not apply here. Amazon is not a private corporation that can do whatever it wants. It is actually a utility, a public good, part of our economic commons. It is like Google in this respect.

I know, I know, Amazon and Google are private corporations yada yada yada. You can think that if you want, but you’d be ignoring the important reality that all of our public goods and utilities, including the police, the fire companies, the energy suppliers, even the road building agencies of city, county, state and federal governments (in the US) have transited between private and public and sometimes back (or to some combination). What our society needs to get it’s pin-headed collective head around is the nature of this thing, this Amazon and Google (and whatever) thing. And to recognize that it is very real and not just a dot com that will go away when everyone realizes they don’t need it or the loans come due. Which will bring us, ultimately, to the question of OpenAccess and OpenSource. And who owns The Internet. And a few other issues.

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1 = big problem.

Comments

  1. #1 Jadehawk
    April 13, 2009

    interesting…

    while I can agree that search-engines should be run as a public utility (how did the Internet work without them…?!), I’m not so sure about Amazon*. Maybe if it was restructured as a pure sellers’ platform that might work. otherwise, this is more a monopoly issue than a public service issue.

    as far as “who owns the internet”… that’s hella tricky, what with the internet being international. even wiht utilities, it’s usually the government who runs things… but what government can be trusted to run a global internet?!
    the alternative would, of course, be to consider the internet the same kind of “ownerless” common resource like the oceans. but that already isn’t working so well for the oceans (tragedy of the commons), nevermind for something that isn’t just there all by itself.

    hmm… this actually would end up in a discussion as to how to properly manage all of the worlds “common resources”. we do a really crappy job with freshwater, and air, and international rail lines, too…

    *am I the only person on Teh Intertoobs who has never bought anything from Amazon?

  2. #2 Mike Haubrich, FCD
    April 13, 2009

    Just a clarification on something…

    “jive” is hip-shakin’
    “jibe” is concurrence

    If Amazon were just a bookselling place, this would have been a non-issue, but with them selling the “community” thing they do a have a responsibility to be upfront to their members (sellers, buyers, authors) as to what happened here.

    So, what Dr. Free-Ride said.

  3. #3 Markk
    April 13, 2009

    I don’t get your point. Amazon is an online bookstore. I have bought far more books online at other places. Amazon could go under tomorrow and it wouldn’t make a heck of a lot of difference except some inconvenienced people and very happy owners of other online bookstores. It is in no way a public utility level thing. Also read the cloud space non-guarantees Amazon gives. You can get equivalent or better terms from half a dozen other places with 10 minutes work.

    Google on the other hand is getting to that nasty, must be regulated point.

    By the way, nothing in this issue of an automated delisting service based on non-reviewed public input would have been helped if Amazon was a utility. The system was a screw up the same either way. It will likely be corrected the same way. Unfortunately trusting all of the public (since a small fraction much less than 1% could cause an issue) is no longer feasible like it was 25 years ago. It was Amazon’s design flaw and they will pay the price.

  4. #4 Greg Laden
    April 13, 2009

    Markk: Check again. Amazon is the largest on line retailer ever, and at present. It sells 300 percent more merchandise than the next biggest on line sales company. Have you bought anything from Target on line? CDNOW? Toy’s are Us? That was Amazon handling that purchase, and Amazon is the purchasing system for many many other companies as well, and expanding. By this time next year, if you buy something on the interent, you’ll be using Amazon services, or a company that pays amazon for using it’s model, because they hold the patents. Amazon is huge outside the US as well. If you live in the UK and you buy music or videos, chances are you bought it from Amazon. It is in the S&P 100.

  5. #5 Joshua Zelinsky
    April 13, 2009

    Greg, being the largest doesn’t make you a public utility. The proper response to this was a boycott. One excellent alternative is http://powells.com/ which does not use Amazon’s services. Since Amazon is backing off, that’s no longer necessary. There’s no need however to make extreme claims about Amazon being somehow a utility when it is merely a very large business. Being dominant in your field does not make you a public utility. This incident demonstrates that Amazon is subject to old fashioned angry customers. There’s no need to put it in any other paradigm.

  6. #6 Brian X
    April 13, 2009

    I’m a reviewer with their Vine program. I sent them an email saying that until this was fixed I was withholding both purchases and new content. (I actually do plan on ordering a few Vine books this thursday, though, if for no other reason than it’s free to me and costs them money to ship.)

  7. #7 Greg Laden
    April 13, 2009

    Joshua, I agree about the response. My post isn’t so much about this stupid and offensive thing they did, but rather, what their new role is. NO, being big per se may not make them a pubic good (not a public utility, but like a public utility or public service), but other things do. and being big does contribute. The banks are public utilities that we pretend are private corporations until we need to fund them publicly. There, too, we need to get real.

  8. #8 Moopheus
    April 13, 2009

    Heck, not only are there online alternatives to Amazon, but there are these places you can go–there may even be one in your town–where you can actual hold a book in your hand, look at it, and walk away with it. The nice people in this place will insist that you leave behind some sheets of paper in exchange. It’s a fair trade. But Amazon is not a public utility. They’re a big player in the book business, but the book business would survive without them. The customers can easily go elsewhere. And the banks aren’t public utilities either–I mean, it’s not like the bailout is being being conducted for OUR benefit. Could we get by without Citibank or BofA? Would we be unable to get banking services without them?

  9. #9 W'lliam
    April 14, 2009

    I think it is incorrect to focus on the utilities concept here. That does not seem to be the point, and it is a point I seem to agree with. There is not a precedent for an emerging entity that ends up serving as an intermediary for the transfer of some good other than banks or utilities, so it is hard to conceptualize this. Remember that Amazon.com has never had a book in stock waiting for you to buy it. You think it is a bookstore, Moopheus, but it has never been a store with books, even in a warehouse somewhere. You are confusing the monopoly question with the question of new kinds of service. Like the state road building corporation (or before that the corporation for building railroads and canals) being a new concept.

  10. #10 Moopheus
    April 14, 2009

    “Remember that Amazon.com has never had a book in stock waiting for you to buy it. ”

    Actually, they do. In fact, they operate several warehouses with state-of-the-art order fulfillment equipment. When I worked as an editor, believe me, we watched Amazon’s preorders closely–we knew how much they were stocking. And that was 7-10 years ago! You think those books magically appear in your mailbox?

    Also, I was not saying that Amazon is a like a bookstore, but that bookstores are an alternative to Amazon.

    Also, the big-box retailers–Walmart, Costco, etc.–sell enormous quantities of books. They are a large and fast-growing part of the business.

    Also, trying to regulate a bookseller as a public utility would be a huge first-amendment issue–effectively putting the government in a position of deciding how books are sold. And, really, who would want that?

  11. #11 Stephanie Z
    April 14, 2009

    On the other hand, Moopheus, it isn’t the case that if the government isn’t making those decisions, no one is.

  12. #12 Greg Laden
    April 14, 2009

    I think the point that is being missed here is about books. Amazon dot com is not a bookstore. Google them. Read up a bit. Yes, they sell books and your local bank will open a savings account for you too, but that is a small part of what they do. If everyone stopped buying books at amazon it would not shut them down, and if they did shut down you might be quite surprised as to what else shuts down.

    But even that isn’t the whole point. The point is that it is easy to forget, or simply not know about because you were not there to experience it, that what is a private corporation vs. a public agency of some kind (including public utilities, etc.) did not come down from the mount a zillion years ago. This relationship between citizen, voter, consumer, private corporation, public corporation, utility, and government agency is not fixed and predetermined. William makes a good point about the canals and RR’s. I’m pretty sure the first “public corporations” in the US were for canal building, and that might have been for the Middlessex or the Champlain canal (not sure of that). At that time, in the US, most publicly used roads were built by private agencies or the US military. To my knowledge, the US military does not build too many roads in the US any more. The USDOT post dates WWII. And do on.

  13. #13 Stephanie Z
    April 14, 2009

    Greg, I think that’s compounded by the fact that books are what Amazon screwed up with. I may be talking about books, but I’m seeing issues with much broader implications. It’s important to recognize that the problem with the books is composed of two parts.

    The first is Amazon’s belief that it’s just fine to restrict access to some material they list without making that transparent to the user. I don’t know whether they make it transparent to the companies for which they provide internet services, but that matters less from a public perspective the more sellers they have as clients. Once they control how some percentage of companies do business and interact with their customers, how Amazon does business becomes a matter of public interest.

    The second problem is the fragility in Amazon’s systems that was exposed by this problem. It’s easy to say that a person can just go to a brick-and-mortar store instead, but by facilitating that much online shopping, Amazon is changing what is stocked in local stores, not to mention how companies manage their inventory and ordering. I was talking last week about just-in-time supply chains. They involve much less overhead for a company, but they’re generally not very redundant and they’re terribly fragile. When Amazon going down can send shockwaves through the economy, how they manage their systems also becomes a matter of public interest.

  14. #14 Moopheus
    April 14, 2009

    And also, before there was Amazon, we made exactly the same complaints about Barnes & Noble. This is not new.

  15. #15 Stephanie Z
    April 14, 2009

    We complained that Barnes & Noble held the reins of the country’s supply chain? This is the same Barnes & Noble that is so dependent on book and music sales that they’ve been hit hard by the changes in the publishing industry, right? The one that uses Amazon as at least their online front end?

    Yeah, I’m not seeing the parallel.

  16. #16 AK
    April 14, 2009

    Despite being a libertarian, I have to agree that when a “private” corporation reaches the point that it controls the majority of the market, or even a large enough share to “wag the dog” in some cases, its policies and activities become of interest to society as a whole. That is, everybody has a stake in what Lehman Brothers is doing with its derivatives, because Lehman Brothers is big enough to send shock-waves through the whole economy if it fails. Same for Amazon, Google, and the like. (Also Long Term Capital Management; remember them?)

    But to trust the government to manage this interest? The same government that got us into the Iraq mess when anybody familiar with the Middle East who’d lived in a rough neighborhood could have known that Saddam was probably bluffing? The same government whose IRS spent almost a decade with a worthless computer system? The same government most of whose agencies have even more worthless computer systems than huge corporations? Both the government and the majority of large corporations have an execrable track record when it comes to large systems projects. The government (overall) has an execrable record representing the interests of society. (Yeah, I know Obama’s your boy, but have you noticed how often he does the same thing Bush would have, and its not even three months into his term?)

    IMO there are several problems brought up here. A corporation, unlike a government agency, can make policy changes with nobody reviewing those changes concerning the “public interest”. This is not and (IMO) should not be a government function, but rather the same NGO’s that review the policy changes of government agencies perhaps should have a role with major corporations.

    Any corporation (or individual) can publish a business policy, get customers, employees, vendors, and stockholders depending on that policy, then change it in a wink of an eye, setting them all in turmoil, with only the stockholders having recourse. This needs to be fixed. It is already being addressed for privacy policies, but the policies being discussed here aren’t yet in play. Perhaps this incident will help.

    Before any other libertarians here (if any) go after me, I’ll point out that compulsion isn’t necessary. If the government (or some central NGO) sets up an agency to be a counterparty to an agreement over policy, then companies (or individuals) who want to commit to a business policy can make a binding contract with this agency and then will not be able to change the policy without allowing the agency to review the changes with all stakeholders (as defined in either law or the specific contract). Businesses that don’t want to commit to such policies would be free not to, but customers, employees, vendors, and even stockholders would know that they didn’t really mean it, and could act accordingly.

  17. #17 Moopheus
    April 14, 2009

    “We complained that Barnes & Noble held the reins of the country’s supply chain?”

    Actually, for books, they almost did. In particular, there was always the threat that if B&N didn’t like your book, it wouldn’t sell, or might not even get published. This was a particular problem for the types of books under discussion now, but hardly limited to that. The rise of the chain superstore was a huge issue in the publishing world. A small number of buyers were inordinately influential.

    And Amazon does not control the country’s supply chain. They’re still a minor player in non-media products.

  18. #18 Moopheus
    April 14, 2009

    “This is not and (IMO) should not be a government function, but rather the same NGO’s that review the policy changes of government agencies perhaps should have a role with major corporations.”

    In this case, bad publicity has caused Amazon to make a shift far faster than any organization, government or otherwise, could possibly do.

  19. #19 Stephanie Z
    April 14, 2009

    If you really want to know what a company does, you read the part of their 10-K (annual filing with the SEC) that deals with risk factors–where their business can break down. I don’t have time to put something together that illustrates what I’m talking about just at the moment, but Amazon’s is well worth a read, particularly pages 9-12. If there’s interest, I can probably get a post out with the relevant details for tomorrow.

  20. #20 Greg Laden
    April 14, 2009

    Moo:They’re still a minor player in non-media products.

    Is Target a minor player? No. Amazon is the on line service that sells Target merchandise. And for other companies as well. They are not a minor player in non-book merchandise. This is not about books.

    I for one am looking forward to Stephanie’s post on pages 9-12.

  21. #21 DuWayne
    April 14, 2009

    I for one am looking forward to Stephanie’s post on pages 9-12.

    Me too! Me too! But then, I am also looking forward to writing about this as well. Unfortunately, I am not sure when I will – probably when I have a break in a couple weeks – between this and the summer term. You seem to come up with some of the best discussions that seemingly should be more clear cut, yet aren’t. (I am also looking forward to actually writing a post that was in parts inspired by your discussion of your former student “john” (who shall remain that in my post, because I’ll be linking yours) and the recent discussion of Pro-Test.)

    As far as the topic at hand, I am not sure I entirely agree with the utility analogy. Yet the more I think on it, the more I suspect that it’s really not far from the mark. More importantly, I think that the same applies to several other entities – Google and Wal-Mart coming to mind. Unfortunately, after around twelve hours of driving yesterday – not getting home until nearly one, then talking to the absolute greatest women in the world until almost two (when I just called to let her know I made it home safe) and then making it to class this morning and all day – my brain has gone rather melty.

    I do think that a reasonable direction to go – even though it turns out this was probably a technical glitch – would be (as I mentioned at Stephanie’s) to allow organizations and even individuals to create their own Amazon portals that could restrict content as they please. Then Amazon as Amazon could be left wide open, for those of us who aren’t afraid of Teh Sex or Teh Gay or other dangerous things and ideas…I mean hell, it’s easy enough for anyone to put an Amazon link on their site and get a piece whenever people use that link and buy shit. Why not take it a little further and allow folks to do more with that portal?

    This is not to say that I support content restrictions, but better for folks to do it with their own portal, than do it to all of us. And it’s unlikely that people who want to restrict the content their family’s or the people in their group are going to stop wanting such restrictions anytime soon. That being a given assumption, I would much rather see them take their restrictions into their own little corner, where it won’t restrict me or mine.

    Meanwhile, I’ll be here in my corner, not trying to hide dangerous books like, “How to be a hateful fucking bigot and make others that way too” from my children – nor religious claptrap either. I want my kids armed and ready to confront these ideas and the impact they will have on their lives. Nor do I want to hide Teh Sex or drugs from them either. I am again, very keen on ensuring they are prepared for what life will inevitably throw at them. But while I will admit to having no respect whatever, for people who want to insulate their children to the point of suffocating them – I respect their right to do so.

  22. #22 Moopheus
    April 14, 2009

    Yes, Amazon sells for Target online, but it is not “the” online service for Target. That would be Target.com, which is Target’s own online service with its own distribution. And it is a small part of Target’s $64 billion business. The vast majority of Target’s business is still in its physical stores. Amazon’s total, worldwide sales, was $20 billion for all categories. Walmart’s was $400 billion. So tell me again who is controlling our supply chain?

  23. #23 Greg Laden
    April 14, 2009

    What is this “Wall-Mart” you speak of?

    The real control is whoever owns the patent for the online “Shopping Cart” software.

  24. #24 Stephanie Z
    April 15, 2009

    My apologies. A dissection of Amazon’s 10-K will have to wait until at least this evening. Family matters are a little more important right now.

  25. #25 AK
    April 15, 2009

    In this case, bad publicity has caused Amazon to make a shift far faster than any organization, government or otherwise, could possibly do.

    Perhaps I should add “NGSO”, that is Non-Governmental Self-Organization such as Twitter.

    If you really want to know what a company does, you read the part of their 10-K (annual filing with the SEC) that deals with risk factors–where their business can break down.

    My experience is that many of the worst systems problems are simply never anticipated until they happen. Or at least, if they are anticipated, it’s by worker bees in the systems department, and covered up by systems (middle) management so the people at the top don’t even know there’s a risk until something like this happens.

    See also my response to your post at Almost Diamonds.