The Washington Post - 29.08.2019

(Joyce) #1

THURSDAY, AUGUST 29 , 2019. THE WASHINGTON POST EZ M2 A


Economy & Business


LABOR


FBI searches home


of UAW chief Jones


The FBI on Wednesday
searched the home of United
Auto Workers President Gary
Jones, a union retreat and
multiple other locations as part
of a corruption probe into illegal
payments to union officials.
The news comes as the UAW
is holding contract talks with
Detroit automakers General
Motors, Ford and Fiat Chrysler.
The FBI has been conducting
a wide-ranging investigation
into illegal payoffs to UAW
officials by FCA. To date, seven
people linked to the union and
the automaker have been
sentenced in the government’s
probe.
The office of the U.S. attorney
in Detroit said the raids included
one on Jones’s home in the
western suburb of Canton, Mich.
The FBI said it was also
conducting searches at the
UAW’s Black Lake retreat in
northern Michigan and multiple
other locations.
The UAW declined to
comment on the raid on Jones’s
home. But in a statement, the
union said it has always “fully
cooperated” with investigators.
— Bloomberg News


RETAIL


Hudson’s Bay to sell
Lord & Taylor

Hudson’s Bay said Wednesday
it would sell its Lord & Ta ylor
department store operations to
San Francisco-based fashion
rental subscription service Le
To te for about $100 million.
The deal comes months after
Hudson’s Bay executive
chairman Richard Baker offered
to take private the Canadian
retailer, which also owns luxury
department store Saks Fifth
Avenue.
Hudson’s Bay said in May that
it was pursuing strategic
alternatives such as a sale or
merger for its department store
Lord & Ta ylor, which has
struggled to attract shoppers.
Hudson’s Bay will get
$74.95 million in cash when the
deal closes and another
$24.98 million in cash after two
years. It will also receive an
equity stake in Le Tote and two
seats on the firm’s board.
— Reuters

TECHNOLOGY

Apple says it won’t
retain Siri recordings

Apple apologized Wednesday

for privacy mishaps surrounding
its Siri voice assistant and said it
would no longer retain audio
recordings of Siri interactions.
The announcement follows
criticism of the iPhone maker
and other tech giants for having
people listen to recordings of
user interactions with voice
assistants in a bid to improve the
product. Apple had hundreds of
contractors listening to Siri in a
process called “grading.” It
suspended the program a few
weeks ago over the controversy.
It plans to reinstate the practice
after making a few changes in
software updates this fall.
“A s a result of our review, we
realize we haven’t been fully
living up to our high ideals, and
for that we apologize,” Apple
said in a statement.
The company said users will
be able to opt in to allow Apple
to listen to a select bunch of
anonymous audio samples to
improve Siri and be able to opt
out later if they wish.
— Bloomberg News

ALSO IN BUSINESS
United Airlines is changing its
frequent-flier plan so that miles
accrued don’t expire in a
member’s lifetime. Wednesday’s
change to MileagePlus aligns
United’s program with those of

Delta Air Lines and JetBlue
Airways. The more generous
policies reflect efforts to make
airlines’ co-branded credit cards
— and the miles attached to
spending on them — more
attractive to travelers.

Fitbit launched its latest
smartwatch, Versa 2, on
Wednesday, adding Amazon’s
voice assistant Alexa and online
payments in a bid to compete
more strongly with Apple’s
smartwatch. Preorders for
Versa 2, which is $200, will also
allow music storage and be
available in stores starting
Sept. 15. Fitbit last month cut its
2019 revenue forecast, blaming
disappointing sales of Versa Lite
smartwatches, a cheaper version
that lacked features such as the
ability to store music. (Amazon
founder and chief executive Jeff
Bezos owns The Washington
Post.)
— From news services

COMING TODAY
8:30 a.m.: The Commerce
Department releases second-
quarter gross domestic product.

10 a.m.: The National
Association of Realtors releases
pending home sales index for
July.

DIGEST



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10-YEAR TREASURY
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CURRENCIES
$1= 106.13 YEN, EURO=$1.

BY JAY GREENE


Amazon has introduced a fea-
ture that pitches its own private-
label brands right before custom-
ers add rival products to their
shopping carts, illustrating the e-
commerce giant’s power on the
country’s dominant online retail
site.
In dozens of product searches
by The Washington Post, offers f or
a “Similar item to consider” fea-
turing Amazon brands appeared
just above the spot where shop-
pers click to add an item to their
ca rt. Those boxes touted a lower
price for Amazon’s versions of
items such as Glad trash bags, Dr.
Scholl’s gel insoles, Energizer bat-
teries a nd N icorette gum.
The tactic shows the influence
that Amazon can wield over what’s
sold on its site, which research
firm eMarketer e xpects to account
for 37.7 percent of all e-commerce
sales in t he United States t his year.
“It’s an ad at exactly the mo-
ment the customer is ready to
buy,” said James Thomson, a for-
mer senior manager in business
development at Amazon and now
partner at brand consultancy Buy
Box Experts. “I d on’t s ee how that’s


not u nfair.”
(Amazon founder and chief ex-
ecutive Jeff B ezos owns The Wash-
ington Post.)
Amazon said the product pro-
motion isn’t very different from
the ways other stores hawk their
private-label goods.
“Like any retailer, we promote
our own brands in our stores,
which provide high-quality prod-
ucts and g reat value to customers,”
Amazon spokeswoman Nell Rona
said. “ We a lso extensively promote
products from our selling part-
ners.”
Amazon’s sprawling market-
place h as become the d efault loca-
tion for consumers to re-up on
goods as basic a s paper towels and
socks.
According to analyst estimates,
about half of all American house-
holds are now Prime members,
turning to mobile apps, desktops
or even the Alexa voice-enabled
application for much of their
shopping.
Despite Amazon’s huge selec-
tion, most shoppers m ake up their
minds about w hat products t o buy
with just a glance o r two. About 90
percent of shoppers who make a
purchase on Amazon select the
option on the page to “Add to cart”
or “Buy now,” r ather than scrolling
below that to choose a n offer from
other sellers, Thomson said. Ama-
zon has turned much of the site’s
premier space over to brands and
rival third-party sellers for adver-
tising, which generated about $

billion in revenue last quarter.
At the same time, the company
has developed more than 100 in-
house labels — including its p opu-
lar AmazonBasics — hawking
items including bras, vitamins
and floor mats for cars. Those
private-label brands already occu-
py prime real estate on the site.
This new addition places them in
more direct competition with oth-
er brands and sellers at the mo-
ment a customer decides to buy.
And in The Post’s test of the fea-
ture, only Amazon brands are of-
fered in the choice location.
Rona declined to say whether
Amazon is testing the feature or
whether it’s permanent. She also
declined to say how many prod-
ucts Amazon targeted with the
“Similar item” promotion or
whether any non-Amazon brands
were included.
The inherent competition be-
tween Amazon and those who sell
on its platform has already drawn
regulatory scrutiny. European
regulators announced an investi-
gation into Amazon’s competitive
tactics, specifically saying they
will look into whether the compa-
ny i s misusing its d ual role as both
a marketplace for independent
sellers and a retailer of its own
products.
Regulators and lawmakers in
the United States a re also l ooking.
The Federal Trade Commission in
June took on responsibility for
investigating Amazon, a move
th at could presage a ramped-up

inquiry into the company’s com-
petitive tactics. And the House
Judiciary Committee grilled Ama-
zon attorney Nate Sutton last
month, pressing him with ques-
tions about conflicts with third-
party s ellers.
Providing customers with the
lowest price for products could
help Amazon defend itself against
unfair-competition claims, since
U.S. antitrust law often focuses on
consumer harm.
Amazon’s latest tactic offers
AmazonBasics batteries to shop-
pers searching for Energizer mod-
els, its Trek Support gel insoles to
customers searching for Dr.
Scholl’s products, and its Basic
Care nicotine gum to those search-
ing for Nicorette’s offering.
The Post a lso found examples o f
Amazon offering its private-label
products as alternatives to other
items.
The feature doesn’t appear for
every customer. B ut when selected
shoppers search for “Glad tall
kitchen drawstring trash bags,”
th ey’ll see links for Glad products.
One of t he t op n on-sponsored list-
ings Monday, for a 100-bag pack-
age of Glad trash bags for $16.77,
includes the suggestion to choose
an 80-bag package of Amazon’s
Solimo tall kitchen drawstring
trash b ags f or $11.11 instead.
Amazon’s own brands are
among the most profitable items
the company sells, said Elaine
Kwon, founder of e-commerce
management and software firm

Kwontified and a former fashion
vendor m anager at A mazon.
“It makes sense to me that they
are trying to achieve complete
market dominance of their pri-
vate-label products on the plat-
form,” Kwon said, adding that the
company is unlikely to alter its
approach unless regulators re-
quire it.
A spokeswoman for Clorox-
owned Glad, Aileen Zerrudo, said,
“We trust that consumers who
love Glad trash bags will continue
to choose o ur brand.”
Energizer and Dr. Scholl’s rep-
resentatives declined to comment.
A Nicorette representative didn’t
respond t o a request for comment.
Amazon has previously experi-
mented with aggressively pitch-
ing its own products. Earlier this
year, the Wall Street Journal re-
ported that Amazon ran a similar
trial in its mobile app. That test,
which Amazon ended, pushed
pop-up windows that took over
much of a product page on shop-
pers’ phones, forcing customers to
either click through to the lower-
cost Amazon products or dismiss
them before continuing to buy.
CNBC has reported that Amazon
removed some of its promotional
private-label brand placement
earlier this year.
In a ddition to giving its p rivate-
label products a boost, the tactic
appears to give Amazon’s retail
sales operation an advantage over
merchants that sell their own
goods on the site. The company

has said third-party sales hit
$160 billion, or 58 percent, of its
total revenue from selling physi-
cal, rather than digital, retail
goods. But Amazon is the only
company t hat sells its o wn private-
label brands. So the advantage is
even greater for Amazon when it
persuades customers to buy its
own branded items over similar
products sold by t hird p arties.
Common Cents Distributors, a
New Jersey merchant, recently
had the top buy-box listing for a
64-ounce bottle of Wesson canola
oil, for $14.48. But Amazon sug-
gested a four-pack of its own Pan-
try Pro canola oil eight-ounce
spray cans, for $11.99, immedi-
ately above the “buy now” button
on the page.
“It takes away from our sales,
100 percent,” s aid Sebastian Cwik,
Common Cents D istributors’ chief
executive. “It’s definitely n ot cool.”
Cwik noted that C ommon Cents
has f ew a lternatives. T he company
generated $30 million in sales last
year, 98 percent of that from Ama-
zon. Shifting t o rivals s uch as eBay
or Walmart would eviscerate his
business, C wik said.
“Where do you draw the line of
[Amazon] being a marketplace
and a company pushing its own
business?” Cwik said. “There’s
nothing we can do but just hope
governments g et i nvolved.”
jay.greene@washpost.com

 More at washingtonpost.com/
technology

Amazon pushes its own brand before shoppers fill carts


Feature promotes retail
site’s own private-label
products over rival goods

BY TONY ROMM


Facebook announced Wednes-
day that it would tighten some of
its rules around political adver-
tising ahead of the 2020 presi-
dential election, requiring those
who purchase ads touting candi-
dates or promoting hot-button
issues to provide more informa-
tion about who actually paid for
them.
The changes seek to address a
number of well-documented inci-
dents in which users placed mis-
leading or inaccurate disclaimers
on ads, effectively undermining a
system for election transparency
that the tech giant built after
Russian agents spread disinfor-
mation on the site during the
2016 race.
Facebook already requires that
political advertisers verify their
identities. Starting in September,
the company will require buyers
of what are known as issue ads or
advocates of a political candidate
to include information about who
is funding the ads.
To satisfy Facebook’s require-
ments, a business can submit its
tax-identification number, or
campaigns can share their own
registration data from the Feder-
al Election Commission, and
Facebook will label them as a
“confirmed organization” in its
archive.
But Facebook won’t require
advocacy organizations to submit
more detailed information about
their donors, meaning that Face-
book users who want to learn
more about an unfamiliar-sound-
ing group must rely on the gov-
ernment, which has not updated
its campaign-finance laws in dec-
ades.
Katie Harbath, a public policy
director at Facebook, said it
would be difficult for the compa-
ny to verify this information be-
cause it does not “have any power
under penalty of law to do that.”
She said Facebook as a result is
“pushing” for more government
“regulation in this space.”
“We’re trying to do as much as
Facebook can do,” she said in an
interview.
Facebook also said it was
changing its policy toward ads
about hot-button issues such as
immigration, gun control and cli-
mate change. The company’s re-
quirements around these ads had
been unclear, Harbath said, re-
sulting in nonpolitical issues
such as recycling to be swept up
in Facebook’s database.
Facebook said it would more
aggressively monitor for and re-
move ads that seek to suppress

voting. Although Facebook took
action against such content dur-
ing last year’s midterm elections,
Harbath said the company until
now had not had an explicit
policy against ads encouraging
people not to vote.
Facebook’s efforts to provide
more transparency around politi-
cal ads have drawn mixed recep-
tion since the company intro-
duced its ad archive about two
years ago.
On one hand, the tech giant’s
efforts have addressed some of
the issues raised by Congress,
after discovering that Russian
agents purchased political ads to
stoke social and political unrest
during the 2016 election.
Lawmakers at the time threat-
ened regulation, arguing that
sites such as Facebook should be
required to adhere to the same
political transparency rules that
have long applied to campaign-
season ads on broadcast televi-
sion. Although policymakers nev-
er managed to pass such a law,
their threats prompted other
companies, including Google and
Twitter, to unveil their own ver-
sions of the ad archive.

The stakes are even higher for
the tech industry entering the
2020 presidential election: Regu-
lators are looking to see whether
they have hardened their digital
defenses against Russia and oth-
er online malefactors ahead of a
race that could generate nearly
$6 billion in online political ad
spending, according to one esti-
mate from eMarketer. Facebook’s
tools, which have been put to the
test in elections worldwide, con-
tinue to attract criticism for being
incomplete or riddled with bugs.
Mozilla researchers studying
the 2019 elections for the Euro-
pean Parliament, for example,
encountered numerous technical
troubles when trying to analyze
Facebook’s archive. Earlier this
year, a report by the media outlet
Vice illustrated how journalists
were able to create and upload
political ads that appeared to be
“paid for by” Vice President Pence
and the Islamic State, even
though they had not been. Face-
book later removed those ads.
“We know we still have a lot of
work to do, and we’re working
with researchers to understand
the uses we have,” H arbath said in
response to the criticism.
tony.romm@washpost.com

Facebook bolsters rules


on political advertising


Changes require buyers
to disclose information
on payment sources

Fa cebook’s tools...


continue to attract


criticism for being


incomplete or riddled


with bugs.


CHANDAN KHANNA/AGENCE FRANCE-PRESSE/GETTY IMAGES

A woman sells cherries at a local market in Port­au­Prince, the capital of Haiti. Experts
say the country’s economy will continue to be anemic this year as inflation rises and
alleged government corruption causes unrest.

In a Port-au-Prince market

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