The Washington Post - 29.08.2019

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



DOW 26,036. UP 258.20, 1.0% 

NASDAQ 7,856. UP 29.93, 0.4% 

S&P 500 2,887. UP 18.78, 0.7% 

GOLD $1,549. DOWN $2.70, 0.2% 

CRUDE OIL $55. UP $0.85, 1.5% 

10-YEAR TREASURY UP $0.40 PER $1,000; 1.47% YIELD

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 executive Jeff B ezos owns The Wash- ington Post.) Amazon said the product promotion 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 products 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 marketplace h as become the d efault location 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 advertising, 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 other brands and sellers at the mo- ment a customer decides to buy. And in The Post’s test of the feature, only Amazon brands are offered 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 products 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 investigation into Amazon’s competitive tactics, specifically saying they will look into whether the company 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 competitive 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 shoppers 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 searching 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 package 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 private-label products on the platform,” Kwon said, adding that the company is unlikely to alter its approach unless regulators require 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 reported 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 shoppers’ 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.” [email protected]

 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 advertising ahead of the 2020 presidential election, requiring those who purchase ads touting candi- dates or promoting hot-button issues to provide more information 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 government, 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 company 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 during 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 political ads have drawn mixed recep- tion since the company introduced 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 versions 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 other 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, continue 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. [email protected]

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

The Washington Post - 29.08.2019

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

LABOR

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BY JAY GREENE

BY TONY ROMM

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