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Amazon (company)

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Amazon.com, Inc.
Amazon
Formerly
Cadabra, Inc. (1994–95)
Public
Traded as
ISINUS0231351067
Industry
FoundedJuly 5, 1994; 26 years ago (1994-07-05)
Bellevue, Washington, U.S.
FounderJeff Bezos
Headquarters,
U.S.
Area served
Worldwide
Key people
Products
Services
RevenueIncrease US$280.522 billion (2019)
Increase US$14.541 billion (2019)
Increase US$11.588 billion (2019)
Total assetsIncrease US$225.248 billion (2019)
Total equityIncrease US$62.06 billion (2019)
Number of employees
Increase 1,000,000 (July 2020)[1]
Subsidiaries
Websitewww.amazon.com
Footnotes / references
[2][3][4][5][6]

Amazon.com, Inc.[7] (/ˈæməzɒn/ AM-ə-zon) is an American multinational technology company based in Seattle, Washington, which focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. It is considered one of the Big Four companies in the U.S. information technology industry, along with Google, Apple, and Facebook.[8][9][10][11] The company has been referred to as "one of the most influential economic and cultural forces in the world", as well as the world's most valuable brand.[12][13]

Amazon was founded by Jeff Bezos in Bellevue, Washington, on July 5, 1994. The company started as an online marketplace for books but expanded to sell electronics, software, video games, apparel, furniture, food, toys, and jewelry. In 2015, Amazon surpassed Walmart as the most valuable retailer in the United States by market capitalization.[14] In 2017, Amazon acquired Whole Foods Market for US$13.4 billion, which substantially increased its footprint as a physical retailer.[15] In 2018, Bezos announced that its two-day delivery service, Amazon Prime, had surpassed 100 million subscribers worldwide.[16][17]

Amazon is known for its disruption of well-established industries through technological innovation and mass scale.[18][19][20] It is the world's largest online marketplace, AI assistant provider, live-streaming platform and cloud computing platform[21] as measured by revenue and market capitalization.[22] Amazon is the largest Internet company by revenue in the world.[23] It is the second largest private employer in the United States[24] and one of the world's most valuable companies.

Amazon distributes downloads and streaming of video, music, and audiobooks through its Prime Video, Amazon Music, Twitch, and Audible subsidiaries. Amazon also has a publishing arm, Amazon Publishing, a film and television studio, Amazon Studios, and a cloud computing subsidiary, Amazon Web Services. It produces consumer electronics including Kindle e-readers, Fire tablets, Fire TV, and Echo devices. Its acquisitions over the years include Ring, Twitch, Whole Foods Market, and IMDb. The company has been criticized for various practices including technological surveillance overreach,[25] a hyper-competitive and demanding work culture,[26] tax avoidance,[27] and for being anti-competitive.[28][29]

History

The company's largest campus outside the United States was inaugurated in Hyderabad, India in September 2019.

Jeff Bezos founded Amazon in July 1994. He chose Seattle because of technical talent as Microsoft is located there.[30] In May 1997, the organization went public. The company began selling music and videos in 1998, at which time it began operations internationally by acquiring online sellers of books in United Kingdom and Germany. The following year, the organization also sold video games, consumer electronics, home-improvement items, software, games, and toys in addition to other items.

In 2002, the corporation started Amazon Web Services (AWS), which provided data on Web site popularity, Internet traffic patterns and other statistics for marketers and developers. In 2006, the organization grew its AWS portfolio when Elastic Compute Cloud (EC2), which rents computer processing power as well as Simple Storage Service (S3), that rents data storage via the Internet, were made available. That same year, the company started Fulfillment by Amazon which managed the inventory of individuals and small companies selling their belongings through the company internet site. In 2012, Amazon bought Kiva Systems to automate its inventory-management business, purchasing Whole Foods Market supermarket chain five years later in 2017.[31]

Board of directors

Amazon founder Jeff Bezos in 2016

As of September 2020, the board of directors is:[32]

Merchant partnerships

In 2000, U.S. toy retailer Toys "R" Us entered into a 10-year agreement with Amazon, valued at $50 million per year plus a cut of sales, under which Toys "R" Us would be the exclusive supplier of toys and baby products on the service, and the chain's website would redirect to Amazon's Toys & Games category. In 2004, Toys "R" Us sued Amazon, claiming that because of a perceived lack of variety in Toys "R" Us stock, Amazon had knowingly allowed third-party sellers to offer items on the service in categories that Toys "R" Us had been granted exclusivity. In 2006, a court ruled in favor of Toys "R" Us, giving it the right to unwind its agreement with Amazon and establish its own independent e-commerce website. The company was later awarded $51 million in damages.[33][34][35]

In 2001, Amazon entered into a similar agreement with Borders Group, under which Amazon would comanage Borders.com as a co-branded service.[36] Borders pulled out of the arrangement in 2007, with plans to also launch its own online store.[37]

On October 18, 2011, Amazon.com announced a partnership with DC Comics for the exclusive digital rights to many popular comics, including Superman, Batman, Green Lantern, The Sandman, and Watchmen. The partnership has caused well-known bookstores like Barnes & Noble to remove these titles from their shelves.[38]

In November 2013, Amazon announced a partnership with the United States Postal Service to begin delivering orders on Sundays. The service, included in Amazon's standard shipping rates, initiated in metropolitan areas of Los Angeles and New York because of the high-volume and inability to deliver in a timely way, with plans to expand into Dallas, Houston, New Orleans and Phoenix by 2014.[39]

In June 2017, Nike confirmed a "pilot" partnership with Amazon to sell goods directly on the platform.[40][41][42]

As of October 11, 2017, AmazonFresh sold a range of Booths branded products for home delivery in selected areas.[43]

In September 2017, Amazon ventured with one of its sellers JV Appario Retail owned by Patni Group which has recorded a total income of US$ 104.44 million ( 759 crore) in financial year 2017–18.[44]

In November 2018, Amazon reached an agreement with Apple Inc. to sell selected products through the service, via the company and selected Apple Authorized Resellers. As a result of this partnership, only Apple Authorized Resellers may sell Apple products on Amazon effective January 4, 2019.[45][46]

Products and services

Amazon.com's product lines available at its website include several media (books, DVDs, music CDs, videotapes and software), apparel, baby products, consumer electronics, beauty products, gourmet food, groceries, health and personal-care items, industrial & scientific supplies, kitchen items, jewelry, watches, lawn and garden items, musical instruments, sporting goods, tools, automotive items and toys & games.[citation needed] In August 2019, Amazon applied to have a liquor store in San Francisco, CA as a means to ship beer and alcohol within the city.[47] Amazon has separate retail websites for some countries and also offers international shipping of some of its products to certain other countries.[48]

Amazon.com has a number of products and services available, including:

Subsidiaries

Amazon owns over 40 subsidiaries, including Audible, Diapers.com, Goodreads, IMDb, Kiva Systems (now Amazon Robotics), Shopbop, Teachstreet, Twitch and Zappos.[49]

A9.com

A9.com, a company focused on researching and building innovative technology, has been a subsidiary since 2003.[50]

Amazon Maritime

Amazon Maritime, Inc. holds a Federal Maritime Commission license to operate as a non-vessel-owning common carrier (NVOCC), which enables the company to manage its own shipments from China into the United States.[51]

Annapurna Labs

In January 2015, Amazon Web Services acquired Annapurna Labs, an Israel-based microelectronics company reputedly for US$350–370M.[52][53]

Audible.com

Audible.com is a seller and producer of spoken audio entertainment, information and educational programming on the Internet. Audible sells digital audiobooks, radio and TV programs and audio versions of magazines and newspapers. Through its production arm, Audible Studios, Audible has also become the world's largest producer of downloadable audiobooks. On January 31, 2008, Amazon announced it would buy Audible for about $300 million. The deal closed in March 2008 and Audible became a subsidiary of Amazon.[54]

Beijing Century Joyo Courier Services

Beijing Century Joyo Courier Services is a subsidiary of Amazon and it applied for a freight forwarding license with the US Maritime Commission. Amazon is also building out its logistics in trucking and air freight to potentially compete with UPS and FedEx.[55][56]

Brilliance Audio

Brilliance Audio is an audiobook publisher founded in 1984 by Michael Snodgrass in Grand Haven, Michigan.[57] The company produced its first 8 audio titles in 1985.[57] The company was purchased by Amazon in 2007 for an undisclosed amount.[58][59] At the time of the acquisition, Brilliance was producing 12–15 new titles a month.[59] It operates as an independent company within Amazon.

In 1984, Brilliance Audio invented a technique for recording twice as much on the same cassette.[60] The technique involved recording on each of the two channels of each stereo track.[60] It has been credited with revolutionizing the burgeoning audiobook market in the mid-1980s since it made unabridged books affordable.[60]

ComiXology

ComiXology is a cloud-based digital comics platform with over 200 million comic downloads as of September 2013. It offers a selection of more than 40,000 comic books and graphic novels across Android, iOS, Fire OS and Windows 8 devices and over a web browser. Amazon bought the company in April 2014.[61]

CreateSpace

CreateSpace, which offers self-publishing services for independent content creators, publishers, film studios, and music labels, became a subsidiary in 2009.[62][63]

Eero

Eero is a company that manufactures mesh-capable routers. The company was founded in 2015 and is based in San Francisco. Amazon announced it would buy Eero in 2019.

Goodreads

Goodreads is a "social cataloging" website founded in December 2006 and launched in January 2007 by Otis Chandler, a software engineer, and entrepreneur, and Elizabeth Chandler. The website allows individuals to freely search Goodreads' extensive user-populated database of books, annotations, and reviews. Users can sign up and register books to generate library catalogs and reading lists. They can also create their own groups of book suggestions and discussions. In December 2007, the site had over 650,000 members and over 10 million books had been added. Amazon bought the company in March 2013.[64]

Health Navigator

In October 2019, Amazon finalized the acquisition of Health Navigator, a startup developing APIs for online health services. The startup will form part of Amazon Care, which is the company's employee healthcare service. This follows the 2018 purchase of PillPack for under $1 billion, which has also been included into Amazon Care.[65]

Junglee

Junglee is a former online shopping service provided by Amazon that enabled customers to search for products from online and offline retailers in India. Junglee started off as a virtual database that was used to extract information from the Internet and deliver it to enterprise applications. As it progressed, Junglee started to use its database technology to create a single window marketplace on the Internet by making every item from every supplier available for purchase. Web shoppers could locate, compare and transact millions of products from across the Internet shopping mall through one window.[66]

Amazon acquired Junglee in 1998, and the website Junglee.com was launched in India in February 2012[67] as a comparison-shopping website. It curated and enabled searching for a diverse variety of products such as clothing, electronics, toys, jewelry and video games, among others, across thousands of online and offline sellers. Millions of products are browsable, the client selects a price, and then they are directed to a seller. In November 2017, Amazon closed down Junglee.com and the former domain currently redirects to Amazon India.[68]

Kuiper Systems

Kuiper Systems LLC, is a subsidiary of Amazon, set up to deploy a broadband satellite internet constellation with an announced 3,236 Low Earth orbit satellites to provide satellite based internet connectivity.[69][70][71]

Lab126

Lab126, developers of integrated consumer electronics such as the Kindle, became a subsidiary in 2004.[72]

Ring

Ring is a home automation company founded by Jamie Siminoff in 2013. It is primarily known for its WiFi powered smart doorbells, but manufactures other devices such as security cameras. Amazon bought Ring for US$1 billion in 2018.[73]

Shelfari

Shelfari was a social cataloging website for books. Shelfari users built virtual bookshelves of the titles which they owned or had read and they could rate, review, tag and discuss their books. Users could also create groups that other members could join, create discussions and talk about books, or other topics. Recommendations could be sent to friends on the site for what books to read. Amazon bought the company in August 2008.[64] Shelfari continued to function as an independent book social network within the Amazon until January 2016, when Amazon announced that it would be merging Shelfari with Goodreads and closing down Shelfari.[74][75]

Souq

Souq.com is the largest E-Commerce platform in the Middle East based in Dubai, United Arab Emirates. On March 28, 2017, Amazon confirmed it would be acquiring Souq.com for $580 million.[76] Souq.com is now a subsidiary of Amazon, and acts as Amazon's arm into the Middle East region.

Twitch

Twitch is a live streaming platform for video, primarily oriented towards video gaming content. The service was first established as a spin-off of a general-interest streaming service known as Justin.tv. Its prominence was eclipsed by that of Twitch, and Justin.tv was eventually shut down by its parent company in August 2014 in order to focus exclusively on Twitch.[77] Later that month, Twitch was acquired by Amazon for $970 million.[78] Through Twitch, Amazon also owns Curse, Inc., an operator of video gaming communities and a provider of VoIP services for gaming.[79] Since the acquisition, Twitch began to sell games directly through the platform,[80] and began offering special features for Amazon Prime subscribers.[81]

The site's rapid growth had been boosted primarily by the prominence of major esports competitions on the service, leading GameSpot senior esports editor Rod Breslau to have described the service as "the ESPN of esports".[82] As of 2015, the service had over 1.5 million broadcasters and 100 million monthly viewers.[83]

On August 10, 2020, Amazon announced the rebranding Twitch Prime, the live-streaming site, in another attempt to crack the video game market after failing a big-budget game effort. With Twitch Prime, users will be given a free subscription to Twitch, with free games from small studios and discounts for larger titles like Grand Theft Auto and League of Legends.[84]

Whole Foods Market

Whole Foods Market store in Ann Arbor, Michigan

Whole Foods Market is an American supermarket chain exclusively featuring foods without artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats.[85]

On August 23, 2017, it was reported that the Federal Trade Commission approved the merger between Amazon.com and Whole Foods Market.[86] The following day it was announced that the deal would be closed on August 28, 2017.[87]

Supply chain

Amazon first launched its distribution network in 1997 with two fulfillment centers in Seattle and New Castle, Delaware. Amazon has several types of distribution facilities consisting of crossdock centers, fulfillment centers, sortation centers, delivery stations, Prime now hubs, and Prime air hubs. There are 75 fulfillment centers and 25 sortation centers with over 125,000 employees.[88][89] Employees are responsible for five basic tasks: unpacking and inspecting incoming goods; placing goods in storage and recording their location; picking goods from their computer recorded locations to make up an individual shipment; sorting and packing orders; and shipping. A computer that records the location of goods and maps out routes for pickers plays a key role: employees carry hand-held computers which communicate with the central computer and monitor their rate of progress. Some warehouses are partially automated with systems built by Amazon Robotics.

Website

Amazon.com
Amazon.com-Logo.svg
Screenshot
Amazon.com screenshot.jpeg
amazon.com homepage
Type of site
E-commerce
Available in
  • Arabic
  • English
  • French
  • German
  • Spanish
  • Italian
  • Chinese
  • Japanese
  • Portuguese
  • Dutch
  • Turkish
OwnerAmazon.com
URLamazon.com (original U.S. site)
Alexa rankSteady 14 (June 2020)[90]
CommercialYes
RegistrationOptional
Launched1995
Current statusOnline
Written inC++ and Java
[91][92]

The domain amazon.com attracted at least 615 million visitors annually by 2008;[93] by the beginning of 2016, over 130 million customers were visiting the U.S. website each month.[94] The company has invested heavily in a massive amount of server capacity for its website, especially to handle the excessive traffic during the Christmas holiday season.[95] According to Alexa Internet rankings, amazon.com is the third most popular website in the United States and the 14th most popular website worldwide.[90]

Results generated by Amazon's search engine are partly determined by promotional fees.[96] The company's localized storefronts, which differ in selection and prices, are differentiated by top-level domain and country code:

Region Country Domain name Since
Americas Brazil amazon.com.br December 2012
Canada amazon.ca June 2002
Mexico amazon.com.mx August 2013
United States amazon.com July 1995
Asia China amazon.cn September 2004
India amazon.in June 2013
Japan amazon.co.jp November 2000
Singapore amazon.sg July 2017
Turkey amazon.com.tr September 2018
United Arab Emirates amazon.ae May 2019
Europe France amazon.fr August 2000
Germany amazon.de October 1998
Italy amazon.it November 2010
Netherlands amazon.nl November 2014
Spain amazon.es September 2011
United Kingdom amazon.co.uk October 1998
Oceania Australia amazon.com.au November 2017

Reviews

Amazon allows users to submit reviews to the web page of each product. Reviewers must rate the product on a rating scale from one to five stars. Amazon provides a badging option for reviewers which indicate the real name of the reviewer (based on confirmation of a credit card account) or which indicate that the reviewer is one of the top reviewers by popularity. Customers may comment or vote on the reviews, indicating whether they found a review helpful to them. If a review is given enough "helpful" hits, it appears on the front page of the product. In 2010, Amazon was reported as being the largest single source of Internet consumer reviews.[97]

When publishers asked Bezos why Amazon would publish negative reviews, he defended the practice by claiming that Amazon.com was "taking a different approach ... we want to make every book available—the good, the bad and the ugly ... to let truth loose".[98]

There have been cases of positive reviews being written and posted by public relations companies on behalf of their clients[99] and instances of writers using pseudonyms to leave negative reviews of their rivals' works.

Content search

"Search Inside the Book" is a feature which allows customers to search for keywords in the full text of many books in the catalog.[100][101] The feature started with 120,000 titles (or 33 million pages of text) on October 23, 2003.[102] There are about 300,000 books in the program. Amazon has cooperated with around 130 publishers to allow users to perform these searches.[citation needed]

To avoid copyright violations, Amazon does not return the computer-readable text of the book. Instead, it returns a picture of the matching page, instructs the web browser to disable printing and puts limits on the number of pages in a book a single user can access. Additionally, customers can purchase online access to some of the same books via the "Amazon Upgrade" program.[citation needed]

Third-party sellers

Amazon derives many of its sales (around 40% in 2008) from third-party sellers who sell products on Amazon.[103] Associates receive a commission for referring customers to Amazon by placing links to Amazon on their websites if the referral results in a sale. Worldwide, Amazon has "over 900,000 members" in its affiliate programs.[104] In the middle of 2014, the Amazon Affiliate Program is used by 1.2% of all websites and it is the second most popular advertising network after Google Ads.[105] It is frequently used by websites and non-profits to provide a way for supporters to earn them a commission.[106] Amazon reported over 1.3 million sellers sold products through Amazon's websites in 2007. Unlike eBay, Amazon sellers do not have to maintain separate payment accounts; all payments are handled by Amazon.[citation needed]

Associates can access the Amazon catalog directly on their websites by using the Amazon Web Services (AWS) XML service. A new affiliate product, aStore, allows Associates to embed a subset of Amazon products within another website, or linked to another website. In June 2010, Amazon Seller Product Suggestions was launched (rumored to be internally called "Project Genesis") to provide more transparency to sellers by recommending specific products to third-party sellers to sell on Amazon. Products suggested are based on customers' browsing history.[107] In 2019, Amazon launched a bigger local online store in Singapore to expand its product selection in the face of intensifying competition with competitors in the region.[108]

In July 2019 the 3rd U.S. City Court of Appeals in Philadelphia ruled that Amazon can be held accountable for faulty third-party sales.[109] The decision ran counter to a past lower court ruling that had favored Amazon. Heather Oberdorf had sued the company in 2016 over a dog leash that snapped, causing permanent loss of vision in one eye. If upheld, the decision would expose Amazon and similar platform businesses to strict liability lawsuits for defective products, which represents a major change in the law.[110] The panel sent the case back to the lower court, to decide whether the leash was actually defective.[111]

Amazon sales rank

The Amazon sales rank (ASR) provides an indication of the popularity of a product sold on any Amazon locale. It is a relative indicator of popularity that is updated hourly. Effectively, it is a "best sellers list" for the millions of products stocked by Amazon.[112] While the ASR has no direct effect on the sales of a product, it is used by Amazon to determine which products to include in its bestsellers lists.[112] Products that appear in these lists enjoy additional exposure on the Amazon website and this may lead to an increase in sales. In particular, products that experience large jumps (up or down) in their sales ranks may be included within Amazon's lists of "movers and shakers"; such a listing provides additional exposure that might lead to an increase in sales.[113] For competitive reasons, Amazon does not release actual sales figures to the public. However, Amazon has now begun to release point of sale data via the Nielsen BookScan service to verified authors.[114] While the ASR has been the source of much speculation by publishers, manufacturers, and marketers, Amazon itself does not release the details of its sales rank calculation algorithm. Some companies have analyzed Amazon sales data to generate sales estimates based on the ASR,[115] though Amazon states:

Please keep in mind that our sales rank figures are simply meant to be a guide of general interest for the customer and not definitive sales information for publishers—we assume you have this information regularly from your distribution sources

— Amazon.com Help[116]

Multi-level sales strategy

Amazon employs a multi-level e-commerce strategy. Amazon started by focusing on business-to-consumer relationships between itself and its customers and business-to-business relationships between itself and its suppliers and then moved to facilitate customer-to-customer with the Amazon marketplace which acts as an intermediary to facilitate transactions. The company lets anyone sell nearly anything using its platform. In addition to an affiliate program that lets anyone post Amazon links and earn a commission on click-through sales, there is now a program which lets those affiliates build entire websites based on Amazon's platform.[117]

Some other large e-commerce sellers use Amazon to sell their products in addition to selling them through their own websites. The sales are processed through Amazon.com and end up at individual sellers for processing and order fulfillment and Amazon leases space for these retailers. Small sellers of used and new goods go to Amazon Marketplace to offer goods at a fixed price.[118]

In November 2015, Amazon opened a physical Amazon Books store in University Village in Seattle. The store is 5,500 square feet and prices for all products match those on its website.[119] Amazon will open its tenth physical book store in 2017;[120] media speculation suggests Amazon plans to eventually roll out 300 to 400 bookstores around the country.[119]

In June 2018, it was reported that Amazon planned to open brick and mortar bookstores in Germany.[121]

Finances

Amazon.com is primarily a retail site with a sales revenue model; Amazon takes a small percentage of the sale price of each item that is sold through its website while also allowing companies to advertise their products by paying to be listed as featured products.[122] As of 2018, Amazon.com is ranked 8th on the Fortune 500 rankings of the largest United States corporations by total revenue.[123]

For the fiscal year 2018, Amazon reported earnings of US$10.07 billion, with an annual revenue of US$232.887 billion, an increase of 30.9% over the previous fiscal cycle. Since 2007 sales increased from 14.835 billion to 232.887 billion, thanks to continued business expansion.[124]

Amazon's market capitalization went over US$1 trillion again in early February 2020 after the announcement of the fourth quarter 2019 results.[125] Amazon's total employees now number 798,000.[125]

Year Revenue
in mil. USD$
Net income
in mil. USD$
Total Assets
in mil. USD$
Employees
2007[126] 14,835 476 6,485 17,000
2008[127] 19,166 645 8,314 20,700
2009[128] 24,509 902 13,813 24,300
2010[129] 34,204 1,152 18,797 33,700
2011[130] 48,077 631 25,278 56,200
2012[131] 61,093 −39 32,555 88,400
2013[132] 74,452 274 40,159 117,300
2014[133] 88,988 −241 54,505 154,100
2015[134] 107,006 596 64,747 230,800
2016[135] 135,987 2,371 83,402 341,400
2017[136] 177,866 3,033 131,310 566,000
2018[137] 232,887 10,073 162,648 647,500
2019[138] 280,522 11,588 225,248 798,000

Controversies

Since its founding, the company has attracted criticism and controversy for its actions, including: supplying law enforcement with facial recognition surveillance tools;[139] forming cloud computing partnerships with the CIA;[140] leading customers away from bookshops;[141] adversely impacting the environment;[142] placing a low priority on warehouse conditions for workers; actively opposing unionization efforts;[143] remotely deleting content purchased by Amazon Kindle users; taking public subsidies; seeking to patent its 1-Click technology; engaging in anti-competitive actions and price discrimination;[28][29] and reclassifying LGBT books as adult content.[144][145] Criticism has also concerned various decisions over whether to censor or publish content such as the WikiLeaks website, works containing libel and material facilitating dogfight, cockfight, or pedophile activities. In December 2011, Amazon faced a backlash from small businesses for running a one-day deal to promote its new Price Check app. Shoppers who used the app to check prices in a brick-and-mortar store were offered a 5% discount to purchase the same item from Amazon.[146] Companies like Groupon, eBay and Taap.it countered Amazon's promotion by offering $10 off from their products.[147][148] The company has also faced accusations of putting undue pressure on suppliers to maintain and extend its profitability. One effort to squeeze the most vulnerable book publishers was known within the company as the Gazelle Project, after Bezos suggested, according to Brad Stone, "that Amazon should approach these small publishers the way a cheetah would pursue a sickly gazelle."[96] In July 2014, the Federal Trade Commission launched a lawsuit against the company alleging it was promoting in-app purchases to children, which were being transacted without parental consent.[149] In 2019, Amazon banned selling skin-lightening and racist products that might affect the consumer health.[150]

Environmental impact

In 2018, Amazon emitted 44.4 million metric tons of CO
2
.[151]

Jeff Bezos at Amazon Spheres Grand Opening in Seattle
Jeff Bezos at Amazon Spheres Grand Opening in Seattle

In September 2019, Amazon workers organized a walk-out as part of the Global Climate Strike.[152][153] An internal group called Amazon Employees for Climate Justice said over 1,800 employees in 25 cities and 14 countries committed to participating in the action to protest Amazon's environmental impact and inaction to climate change.[152] This group of workers petitioned Jeff Bezos and Amazon with three specific demands: to stop donating to politicians and lobbyists that deny climate change, to stop working with fossil fuel companies to accelerate oil and gas extraction, and to achieve zero carbon emissions by 2030.[154][155][153]

Amazon has introduced the Shipment Zero program, however Shipment Zero has only committed to reducing 50% of its shipments to net zero by 2030. Also, even that 50% does not necessarily mean a decrease in emissions compared to current levels given Amazon's rate of growth in orders.[156]

That said, Amazon's CEO has also signed the Climate Pledge, in which Amazon would meet the Paris climate agreement goals 10 year ahead of schedule, and would be carbon-neutral by 2040. Besides this pledge, it also ordered 100 000 electric delivery trucks from Rivian.[157]

Amazon funds both climate denial groups including the Competitive Enterprise Institute and politicians denying climate change including Jim Inhofe.[158][159]

In November 2018, a community action group opposed the construction permit delivered to Goodman Group for the construction of a 160,000 square metres (1,700,000 sq ft) logisitics platform Amazon will operate at Lyon–Saint-Exupéry Airport. In February 2019, Étienne Tête filed a request on behalf of a second regional community action group asking the administrative court to decide whether the platform served a sufficiently important public interest to justify its environmental impact. Construction has been suspended while these matters are decided.[142]

Amazon considered making an option for Prime customers to have packages delivered at the most efficient and environmentally-friendly time (allowing the company to combine shipments with the same destination) but decided against it out of fear customers might reduce purchases.[160] Since 2019, the company has instead offered customer an "Amazon Day" option, where all orders are delivered on the same day, emphasizing customer convenience, and it occasionally offers Prime customers credits in return for selecting slower and less expensive shipping options.[160]

Selling counterfeit, unsafe and discarded items

On October 16, 2016, Apple provided evidence in a lawsuit against a third-party company that Amazon was selling counterfeit Apple products and advertising them as genuine. Through purchasing, Apple found that it was able to identify counterfeit products with a success rate of 90%. Amazon was sourcing and selling items without properly determining if they were genuine. The other company settled with Apple for an undisclosed amount on April 27, 2017.[161]

The selling of counterfeit products by Amazon has attracted widespread notice, with both purchases marked as being fulfilled by third parties and those shipped directly from Amazon warehouses being found to be counterfeit. This has included some products sold directly by Amazon itself and marked as "ships from and sold by Amazon.com".[162][163] Counterfeit charging cables sold on Amazon as purported Apple products have been found to be a fire hazard.[164][165] Such counterfeits have included a wide array of products, from big ticket items to every day items such as tweezers, gloves,[166] and umbrellas.[167] More recently, this has spread to Amazon's newer grocery services.[168] Counterfeiting was reported to be especially a problem for artists and small businesses whose products were being rapidly copied for sale on the site.[169]

One Amazon business practice that encourages counterfeiting is that, by default, seller accounts on Amazon are set to use "commingled inventory". With this practice, the goods that a seller sends to Amazon are mixed with those of the producer of the product and with those of all other sellers that supply what is supposed to be the same product.[170][171] Then when a customer orders a product from a seller, Amazon ships out from its commingled pool of inventory according to its convenience for shipping rather than from what the seller sent to them for warehousing. According to a December 2017 article in Forbes, "This means that counterfeits can be commingled with authentic products, and not even Amazon (apparently) can easily determine where they came from. This gives an added level of protection to counterfeiters, as the smokescreen between them and the nefarious products they spike Amazon's supply chain with is often incredibly thick."[171][172]

In June 2019, Buzzfeed reported that some products identified on the site as "Amazon's choice" were low quality, had a history of customer complaints, and exhibited evidence of product review manipulation.[173]

In August 2019, The Wall Street Journal reported that they had found more than 4,000 items for sale on Amazon's site that had been declared unsafe by federal agencies, had misleading labels, or had been banned by federal regulators.[174]

In the wake of the WSJ investigation, three U.S. senators – Richard Blumenthal, Ed Markey, and Bob Menendez – sent an open letter to Jeff Bezos demanding him to take action about the selling of unsafe items on the site. The letter said that "Unquestionably, Amazon is falling short of its commitment to keeping safe those consumers who use its massive platform."[175] The letter included a number of questions about the company's practices and gave Bezos a deadline to respond by September 29, 2019, saying "We call on you to immediately remove from the platform all the problematic products examined in the recent WSJ report; explain how you are going about this process; conduct a sweeping internal investigation of your enforcement and consumer safety policies; and institute changes that will continue to keep unsafe products off your platform."[175] Earlier in the same month, senators Blumenthal and Menendez had sent Bezos a letter about the Buzzfeed report.[175]

In December 2019, The Wall Street Journal reported that some people were literally retrieving trash out of dumpsters and selling it as new products on Amazon. The reporters ran an experiment and determined that it was easy for a seller to set up an account and sell cleaned up junk as new products. In addition to trash, sellers were obtaining inventory from clearance bins, thrift stores, and pawn shops.[176][177]

As a result of these issues, companies such as Birkenstock have pulled their products from the website.[178]

In August 2020, an appeals court in California ruled that Amazon can be held liable for unsafe products sold on its website. A California woman had bought a replacement laptop battery that caught fire and caused her to receive third-degree burns.[179]

Sales and use taxes

Amazon's state sales tax collection policy has changed over the years since it did not collect any sales taxes in its early years. In the U.S., state and local sales taxes are levied by state and local governments, not at the federal level. In most countries where Amazon operates, a sales tax or value added tax is uniform throughout the country, and Amazon is obliged to collect it from all customers. Proponents of forcing Amazon.com to collect sales tax—at least in states where it maintains a physical presence—argue the corporation wields an anticompetitive advantage over storefront businesses forced to collect sales tax.[180]

Many U.S. states in the 21st century have passed online shopping sales tax laws designed to compel Amazon.com and other e-commerce retailers to collect state and local sales taxes from its customers. Amazon.com originally collected sales tax only from five states as of 2011, but as of April 2017, Amazon collects sales taxes from customers in all 45 states that have a state sales tax and in Washington, D.C.[181]

Income taxes

Amazon paid no federal income taxes in the U.S. in 2017 and 2018, and actually received tax refunds worth millions of dollars, despite recording several billion dollars in profits each year.[27] CNN reported that Amazon's tax bill was zero because they took advantage of provisions in years when they were losing money that allowed them to offset future taxes on profits, as well as various other tax credits.[182] Amazon was criticized by political figures for not paying federal income taxes.[183]

Comments by Donald Trump and Bernie Sanders

In early 2018, President Donald Trump repeatedly criticized Amazon's use of the United States Postal Service and its prices for the delivery of packages, stating, "I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy," Trump tweeted. "Amazon should pay these costs (plus) and not have them bourne [sic] by the American Taxpayer."[184] Amazon's shares fell by 6 percent as a result of Trump's comments. Shepard Smith of Fox News disputed Trump's claims and pointed to evidence that the USPS was offering below-market prices to all customers with no advantage to Amazon. However, analyst Tom Forte pointed to the fact that Amazon's payments to the USPS are not made public and that their contract has a reputation for being "a sweetheart deal".[185][186]

Throughout the summer of 2018, Vermont Senator Bernie Sanders criticized Amazon's wages and working conditions in a series of YouTube videos and media appearances. He also pointed to the fact that Amazon had paid no federal income tax in the previous year.[187] Sanders solicited stories from Amazon warehouse workers who felt exploited by the company.[188] One such story, by James Bloodworth, described the environment as akin to "a low-security prison" and stated that the company's culture used an Orwellian newspeak.[189] These reports cited a finding by New Food Economy that one third of fulfilment center workers in Arizona were on the Supplemental Nutrition Assistance Program (SNAP).[190] Responses by Amazon included incentives for employees to tweet positive stories and a statement which called the salary figures used by Sanders "inaccurate and misleading". The statement also charged that it was inappropriate for him to refer to SNAP as "food stamps".[188] On September 5, 2018, Sanders along with Ro Khanna introduced the Stop Bad Employers by Zeroing Out Subsidies (Stop BEZOS) Act aimed at Amazon and other alleged beneficiaries of corporate welfare such as Walmart, McDonald's and Uber.[191] Among the bill's supporters were Tucker Carlson of Fox News and Matt Taibbi who criticized himself and other journalists for not covering Amazon's contribution to wealth inequality earlier.[192][193]

On October 2, 2018, Amazon announced that its minimum wage for all American employees would be raised to $15 per hour. Sanders congratulated the company for making this decision.[194]

Opposition to trade unions

A sticker expressing an anti-Amazon message is pictured on the back of a street sign in Seattle.

Amazon has opposed efforts by trade unions to organize in both the United States and the United Kingdom. In 2001, 850 employees in Seattle were laid off by Amazon.com after a unionization drive. The Washington Alliance of Technological Workers (WashTech) accused the company of violating union laws, and claimed Amazon managers subjected them to intimidation and heavy propaganda. Amazon denied any link between the unionization effort and layoffs.[195] Also in 2001, Amazon.co.uk hired a US management consultancy organization, The Burke Group, to assist in defeating a campaign by the Graphical, Paper and Media Union (GPMU, now part of Unite the Union) to achieve recognition in the Milton Keynes distribution depot. It was alleged that the company victimized or sacked four union members during the 2001 recognition drive and held a series of captive meetings with employees.[196]

An Amazon training video that was leaked in 2018 stated "We are not anti-union, but we are not neutral either. We do not believe unions are in the best interest of our customers or shareholders or most importantly, our associates."[197] Two years later, it was found that Whole Foods was using a heat map to track which stores had the highest levels of pro-union sentiment. Factors including racial diversity, proximity to other unions, poverty levels in the surrounding community and calls to the National Labor Relations Board were named as contributors to "unionization risk".[198]

In early 2020, an Amazon internal documents were leaked, it said that Amazon has been using an interactive heat map to monitor its 510 locations across the U.S. and assign each store a unionization risk score based on such criteria as employee loyalty, turnover rate and racial diversity. Data collected in the heat map suggest that stores with low racial and ethnic diversity, especially those located in poor communities, are more likely to unionize.[199][200]

Working conditions

Former employees, current employees, the media, and politicians have criticized Amazon for poor working conditions at the company.[201][202][203] In 2011, it was publicized that workers had to carry out tasks in 100 °F (38 °C) heat at the Breinigsville, Pennsylvania warehouse. As a result of these inhumane conditions, employees became extremely uncomfortable and suffered from dehydration and collapse. Loading-bay doors were not opened to allow in fresh air because of concerns over theft.[204] Amazon's initial response was to pay for an ambulance to sit outside on call to cart away overheated employees.[204] The company eventually installed air conditioning at the warehouse.[205]

Some workers, "pickers", who travel the building with a trolley and a handheld scanner "picking" customer orders can walk up to 15 miles during their workday and if they fall behind on their targets, they can be reprimanded. The handheld scanners give real-time information to the employee on how quickly or slowly they are working; the scanners also serve to allow Team Leads and Area Managers to track the specific locations of employees and how much "idle time" they gain when not working.[206][207]

In a German television report broadcast in February 2013, journalists Diana Löbl and Peter Onneken conducted a covert investigation at the distribution center of Amazon in the town of Bad Hersfeld in the German state of Hessen. The report highlights the behavior of some of the security guards, themselves being employed by a third party company, who apparently either had a neo-Nazi background or deliberately dressed in neo-Nazi apparel and who were intimidating foreign and temporary female workers at its distribution centers. The third party security company involved was delisted by Amazon as a business contact shortly after that report.[208][209][210][211]

In March 2015, it was reported in The Verge that Amazon will be removing non-compete clauses of 18 months in length from its US employment contracts for hourly-paid workers, after criticism that it was acting unreasonably in preventing such employees from finding other work. Even short-term temporary workers have to sign contracts that prohibit them from working at any company where they would "directly or indirectly" support any good or service that competes with those they helped support at Amazon, for 18 months after leaving Amazon, even if they are fired or made redundant.[212][213]

A 2015 front-page article in The New York Times profiled several former Amazon employees[214] who together described a "bruising" workplace culture in which workers with illness or other personal crises were pushed out or unfairly evaluated.[14] Bezos responded by writing a Sunday memo to employees,[215] in which he disputed the Times's account of "shockingly callous management practices" that he said would never be tolerated at the company.[14]

In an effort to boost employee morale, on November 2, 2015, Amazon announced that it would be extending six weeks of paid leave for new mothers and fathers. This change includes birth parents and adoptive parents and can be applied in conjunction with existing maternity leave and medical leave for new mothers.[216]

In mid-2018, investigations by journalists and media outlets such as The Guardian reported poor working conditions at Amazon's fulfillment centers.[217][218] Later in 2018, another article exposed poor working conditions for Amazon's delivery drivers.[219]

In response to criticism that Amazon does not pay its workers a livable wage, Jeff Bezos announced beginning November 1, 2018, all US and UK Amazon employees will earn a $15 an hour minimum wage.[220] Amazon will also lobby to make $15 an hour the federal minimum wage.[221] At the same time, Amazon also eliminated stock awards and bonuses for hourly employees.[222]

On Black Friday 2018, Amazon warehouse workers in several European countries, including Italy, Germany, Spain and the United Kingdom, went on strike to protest inhumane working conditions and low pay.[223]

The Daily Beast reported in March 2019 that emergency services responded to 189 calls from 46 Amazon warehouses in 17 states between the years 2013 and 2018, all relating to suicidal employees. The workers attributed their mental breakdowns to employer-imposed social isolation, aggressive surveillance, and the hurried and dangerous working conditions at these fulfillment centers. One former employee told The Daily Beast "It's this isolating colony of hell where people having breakdowns is a regular occurrence."[224]

On July 15, 2019, during the onset of Amazon's "Prime Day" sale event, Amazon employees working in the United States and Germany went on strike in protest of unfair wages and poor working conditions.[225][226]

In March 2020, during the coronavirus outbreak when the government instructed companies to restrict social contact, Amazon's UK staff was forced to work overtime to meet the demand spiked by the disease. A GMB spokesperson said the company had put "profit before safety".[227]

Conflict of interest with the CIA and DOD

In 2013, Amazon secured a US$600 million contract with the CIA, which poses a potential conflict of interest involving the Bezos-owned The Washington Post and his newspaper's coverage of the CIA.[228] Kate Martin, director of the Center for National Security Studies, said, "It's a serious potential conflict of interest for a major newspaper like The Washington Post to have a contractual relationship with the government and the most secret part of the government."[229] This was later followed by a US$10 billion contract with the U.S. Department of Defense.[140]

Seattle head tax and houselessness services

In May 2018, Amazon threatened the Seattle City Council over an employee head tax proposal that would have funded houselessness services and low-income housing. The tax would have cost Amazon about $800 per employee, or 0.7% of their average salary.[230] In retaliation, Amazon paused construction on a new building, threatened to limit further investment in the city, and funded a repeal campaign. Although originally passed, the measure was soon repealed after an expensive repeal campaign spearheaded by Amazon.[231]

Nashville Operations Center of Excellence

The incentives given by the Metropolitan Council of Nashville and Davidson County to Amazon for their new Operations Center of Excellence in Nashville Yards, a site owned by developer Southwest Value Partners, have been controversial, including the decision by the Tennessee Department of Economic and Community Development to keep the full extent of the agreement secret.[232] The incentives include "$102 million in combined grants and tax credits for a scaled-down Amazon office building" as well as "a $65 million cash grant for capital expenditures" in exchange for the creation of 5,000 jobs over seven years.[232]

The Tennessee Coalition for Open Government called for more transparency.[232] Another local organization known as the People's Alliance for Transit, Housing, and Employment (PATHE) suggested no public money should be given to Amazon; instead, it should be spent on building more public housing for the working poor and the homeless and investing in more public transportation for Nashvillians.[233] Others suggested incentives to big corporations do not improve the local economy.[234]

In November 2018, the proposal to give Amazon $15 million in incentives was criticized by the Nashville Firefighters Union and the Nashville chapter of the Fraternal Order of Police,[235] who called it "corporate welfare."[236] In February 2019, another $15.2 million in infrastructure was approved by the council, although it was voted down by three council members, including Councilwoman Angie Henderson who dismissed it as "cronyism".[237]

Facial recognition technology and law enforcement

While Amazon has publicly opposed secret government surveillance, as revealed by Freedom of Information Act requests it has supplied facial recognition support to law enforcement in the form of the Rekognition technology and consulting services. Initial testing included the city of Orlando, Florida, and Washington County, Oregon. Amazon offered to connect Washington County with other Amazon government customers interested in Rekognition and a body camera manufacturer. These ventures are opposed by a coalition of civil rights groups with concern that they could lead to an expansion of surveillance and be prone to abuse. Specifically, it could automate the identification and tracking of anyone, particularly in the context of potential police body camera integration.[139][238][239] Because of the backlash, the city of Orlando publicly stated it will no longer use the technology, but may revisit this decision at a later date.[240]

Access to NHS data

The UK government awarded Amazon a contract that gives the company free access to information about healthcare published by the UK's National Health Service.[241] This will, for example, be used by Amazon's Alexa to answer medical questions, although Alexa also uses many other sources of information. The material, which excludes patient data, could also allow the company to make, advertise and sell its own products. The contract allows Amazon access to information on symptoms, causes and definitions of conditions, and "all related copyrightable content and data and other materials". Amazon can then create "new products, applications, cloud-based services and/or distributed software", which the NHS will not benefit from financially. The company can also share the information with third parties. The government said that allowing Alexa devices to offer expert health advice to users will reduce pressure on doctors and pharmacists.[242]

Collection of data and surveillance

On February 17, 2020, a Panorama documentary highlighted the amount of data collected by the company and the move into surveillance causing concerns of politicians and regulators in the US and Europe.[243][244]

EU antitrust charges

On June 11, 2020, the European Union announced that it will be pressing charges against Amazon over its treatment of third-party e-commerce sellers.[245]

Quashing competitors

In July 2020, Amazon along with other tech giants Apple, Google and Facebook were accused of maintaining harmful power and anti-competitive strategies to quash potential competitors in the market.[246] The CEOs of respective firms appeared in a teleconference on July 29, 2020 before the lawmakers of the U.S. House Antitrust Subcommittee.[247]

Anti-vaccination and non-scientific cancer 'cures'

Anti-vaccination and non evidence-based cancer 'cures' have routinely appeared high in Amazon's books and videos. This may be due to positive reviews posted by supporters of untested methods, or gaming of the algorithms by truther communities, rather than any intent on Amazon's part.[248][249]

Wired magazine found that Amazon Prime Video was full of 'pseudoscientific documentaries laden with conspiracy theories and pointing viewers towards unproven treatments'.[250]

U.S. Rep. Adam Schiff (D-Calif.) expressed concern that Amazon was “surfacing and recommending products and content that discourage parents from vaccinating their children.” Amazon subsequently removed five anti-vaccination documentaries.[251] Amazon also removed 12 books that unscientifically claimed bleach could cure conditions including malaria and childhood autism. This followed an NBC News report about parents who used it in a misguided attempt to reverse their children's autism.[252]

Response to COVID-19 pandemic

Hazard pay and overtime

Amazon introduced new policies to reward frontline workers for continuing to come into work during the crisis. One of these policies, announced on March 16, 2020 was a temporary $2-per-hour rise in pay. This policy expired in June 2020.[253] Amazon also announced a policy of unlimited, unpaid time off that lasted until April 30, 2020.[254]

Additional hiring as a result of pandemic

In response to the COVID-19 pandemic, Amazon introduced temporary restrictions on the sale of non-essential goods. In March 2020, it hired some 100,000 more staff in the US to help deal with essential items such as food and medical equipment. It also reported that it was so busy that it was unable to bring on board new customers and therefore had to have a waiting list. In April, the firm announced that it was going to hire up to 75,000 workers to help deal with increased demand.[255]

Employee protests during COVID-19

During the pandemic there have been protests by the Amazon workers at warehouses in the US, France, and Italy. The BBC reported that there were confirmed coronavirus cases in more than 50 locations.[255] The reason for the protests is the company policy to "run normal shifts" despite many positive cases of the virus.[256] According to the UNI Global Union, "Amazon cannot act like this is business as usual. We are facing a deadly virus that has already taken the lives of thousands of people and paralyzed the world's economy. If distribution centers are not safe for workers right now, they should be closed immediately."[256] In Spain, the company has faced legal complaints over its policies.[257] Despite workers at 19 warehouses in the US having tested positive for COVID-19, Amazon did not shut down warehouses, only doing so when forced by the government or because of protests. A group of US Senators wrote an open letter to Bezos in March 2020, expressing concerns about worker safety.[258]

An Amazon warehouse protest on March 30, 2020, in Staten Island led to its organizer, Christian Smalls, being fired. Amazon defended the decision by saying that Smalls was supposed to be in self-isolation at the time and leading the protest put its other workers at risk.[257] Smalls has called this response "ridiculous".[259] The New York state attorney general, Letitia James, is considering legal retaliation to the firing which she called "immoral and inhumane."[257] She also asked the National Labor Relations Board to investigate Smalls' firing. Smalls himself accuses the company of retaliating against him for organizing a protest.[259] At the Staten Island warehouse, one case of COVID-19 has been confirmed by Amazon; workers believe there are more, and say that the company has not cleaned the building, given them suitable protection, or informed them of potential cases.[258] Smalls added specifically that there are many workers there in risk categories, and the protest only demanded that the building be sanitized and the employees continue to be paid during that process.[259] Derrick Palmer, another worker at the Staten Island facility, told The Verge that Amazon quickly communicates through text and email when they need the staff to complete mandatory overtime, but have not been using this to tell people when a colleague has contracted the disease, instead waiting days and sending managers to speak to employees in person.[258] Amazon claim that the Staten Island protest only attracted 15 of the facility's 5,000 workers,[260] while other sources describe much larger crowds.[258]

On April 14, 2020, two Amazon employees were fired for "repeatedly violating internal policies", after they had circulated a petition about health risks for warehouse workers internally.[261]

On May 4, Amazon vice president Tim Bray resigned "in dismay" over the firing of whistle-blower employees who spoke out about the lack of COVID-19 protections, including shortages of face masks and failure to implement widespread temperature checks which were promised by the company. He said that the firings were "chickenshit" and "designed to create a climate of fear" in Amazon warehouses.[262]

In a Q1 2020 financial report, Jeff Bezos announced that Amazon expects to spend $4 billion or more (predicted operating profit for Q2) on COVID-19-related issues: personal protective equipment, higher wages for hourly teams, cleaning for facilities, and expanding Amazon's COVID-19 testing capabilities. These measures intend to improve the safety and well-being of hundreds of thousands of the company's employees.[263]

Closure in France

The SUD (trade unions) brought a court case against Amazon for unsafe working conditions. This resulted in a French district court (Nanterre) ruling on April 15, 2020, ordering the company to limit its deliveries to food and essential medical or hygienic products or pay a €1 million per day fine. Amazon said it would appeal, and on the following day shut its six French warehouses until at least April 21, 2020, for evaluation of the situation.[264]

Lobbying

Amazon lobbies the United States federal government and state governments on multiple issues such as the enforcement of sales taxes on online sales, transportation safety, privacy and data protection and intellectual property. According to regulatory filings, Amazon.com focuses its lobbying on the United States Congress, the Federal Communications Commission and the Federal Reserve. Amazon.com spent roughly $3.5 million, $5 million and $9.5 million on lobbying, in 2013, 2014 and 2015, respectively.[265]

Amazon.com was a corporate member of the American Legislative Exchange Council (ALEC) until it dropped membership following protests at its shareholders' meeting on May 24, 2012.[266]

In 2014, Amazon expanded its lobbying practices as it prepared to lobby the Federal Aviation Administration to approve its drone delivery program, hiring the Akin Gump Strauss Hauer & Feld lobbying firm in June.[267] Amazon and its lobbyists have visited with Federal Aviation Administration officials and aviation committees in Washington, D.C. to explain its plans to deliver packages.[268] In September 2020 this moved one step closer with the granting of a critical certificate by the FAA.[269]

In 2019 it spent $16.8m and had a team of 104 lobbyists, up from $14.4m and 103 lobbyists in 2018.[270]

See also

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Further reading

External links