Amazon now expects around $75 billion in capital spending in 2024, with the majority on technology infrastructure. On the company’s latest earnings call, chief executive Andy Jassy said he expects the company will spend even more in 2025.
This represents a surge on 2023, when it spent $48.4 billion for the whole year. The biggest cloud providers, including Microsoft and Google, are all engaged in an AI spending spree that shows little sign of abating.
Amazon, Microsoft, and Meta are all big customers of Nvidia, but are also designing their own data center chips to lay the foundations for what they hope will be a wave of AI growth.
“Every one of the big cloud providers is feverishly moving towards a more verticalized and, if possible, homogenized and integrated [chip technology] stack,” said Daniel Newman at The Futurum Group.
“Everybody from OpenAI to Apple is looking to build their own chips,” noted Newman, as they seek “lower production cost, higher margins, greater availability, and more control.”
“It’s not [just] about the chip, it’s about the full system,” said Rami Sinno, Annapurna’s director of engineering and a veteran of SoftBank’s Arm and Intel.
For Amazon’s AI infrastructure, that means building everything from the ground up, from the silicon wafer to the server racks they fit into, all of it underpinned by Amazon’s proprietary software and architecture. “It’s really hard to do what we do at scale. Not too many companies can,” said Sinno.
After starting out building a security chip for AWS called Nitro, Annapurna has since developed several generations of Graviton, its Arm-based central processing units that provide a low-power alternative to the traditional server workhorses provided by Intel or AMD.
Since its founders started Anthropic in 2021, the company has marketed itself as one that takes an ethics- and safety-focused approach to AI development. The company differentiates itself from competitors like OpenAI by adopting what it calls responsible development practices and self-imposed ethical constraints on its models, such as its “Constitutional AI” system.
As Futurism points out, this new defense partnership appears to conflict with Anthropic’s public “good guy” persona, and pro-AI pundits on social media are noticing. Frequent AI commentator Nabeel S. Qureshi wrote on X, “Imagine telling the safety-concerned, effective altruist founders of Anthropic in 2021 that a mere three years after founding the company, they’d be signing partnerships to deploy their ~AGI model straight to the military frontlines.“
Aside from the implications of working with defense and intelligence agencies, the deal connects Anthropic with Palantir, a controversial company which recently won a $480 million contract to develop an AI-powered target identification system called Maven Smart System for the US Army. Project Maven has sparked criticism within the tech sector over military applications of AI technology.
It’s worth noting that Anthropic’s terms of service do outline specific rules and limitations for government use. These terms permit activities like foreign intelligence analysis and identifying covert influence campaigns, while prohibiting uses such as disinformation, weapons development, censorship, and domestic surveillance. Government agencies that maintain regular communication with Anthropic about their use of Claude may receive broader permissions to use the AI models.
Even if Claude is never used to target a human or as part of a weapons system, other issues remain. While its Claude models are highly regarded in the AI community, they (like all LLMs) have the tendency to confabulate, potentially generating incorrect information in a way that is difficult to detect.
That’s a huge potential problem that could impact Claude’s effectiveness with secret government data, and that fact, along with the other associations, has Futurism’s Victor Tangermann worried. As he puts it, “It’s a disconcerting partnership that sets up the AI industry’s growing ties with the US military-industrial complex, a worrying trend that should raise all kinds of alarm bells given the tech’s many inherent flaws—and even more so when lives could be at stake.”
Confirming previous rumors, Variety reports that Amazon will be moving ahead with producing a TV series based on the popular Mass Effect video game franchise. The writing and production staff involved might not inspire confidence from fans, though.
The series’ writer and executive producer is slated to be Daniel Casey, who until now was best known as the primary screenwriter on F9: The Fast Saga, one of the late sequels in the Fast and the Furious franchise. He was also part of a team of writers behind the relatively little-known 2018 science fiction film Kin.
Karim Zreik will also produce, and his background is a little more encouraging; his main claim to fame is in the short-lived Marvel Television unit, which produced relatively well-received series like Daredevil and Jessica Jones for Netflix before Disney+ launched with its Marvel Cinematic Universe shows.
Another listed producer is Ari Arad, who has some background in video game adaptations, including the Borderlands and Uncharted movies, as well as the much-maligned live-action adaptation of Ghost in the Shell.
So yeah, it’s a bit of a mixed bag here. No plot details have been released, but it seems likely that the show will tell a new story rather than focus on the saga of Commander Shepherd from the games, since the games were all about the player inhabiting that character with their own choices. That’s only a guess, though.
Amazon is currently riding high after the smash success of another video game TV series, Fallout, which impressed both longtime and new fans when it debuted to critical acclaim and record viewing numbers earlier this year.
More than 500 Amazon workers reportedly signed a letter to Amazon Web Services’ (AWS) CEO this week, sharing their outrage over Amazon’s upcoming return-to-office (RTO) policy that will force workers into offices five days per week.
In September, Amazon announced that starting in 2025, workers will no longer be allowed to work remotely twice a week. At the time, Amazon CEO Andy Jassy said the move would make it easier for workers “to learn, model, practice, and strengthen our culture.”
Reuters reported today that it viewed a letter from a swath of workers sent to AWS chief Matt Garman on Wednesday regarding claims he reportedly made during an all-hands meeting this month. Garman reportedly told attendees that 9 out of 10 employees he spoke with support the five-day in-office work policy. The letter called the statements “inconsistent with the experiences of many employees” and “misrepresenting the realities of working at Amazon,” Reuters reported.
“We were appalled to hear the non-data-driven explanation you gave for Amazon imposing a five-day in-office mandate,’” the letter reportedly stated.
Employees banding together to protest against new, unfavorable work policies isn’t exclusive to Amazon. And the reported 500 workers who signed the letter represent just a fraction of Amazon’s worker base, which regulatory filings reported consisted of 1.5 million people in 2023. However, with the global conglomerate remaining firm about its stern policy thus far, eyes are on the Seattle firm’s HR approach, which could impact how other companies decide to implement RTO policies.
In the letter, hundreds of Amazon workers reportedly lamented what they believe was a lack of third-party data shared in making the RTO policy. It said that Garman’s statements “break the trust of your employees who have not only personal experience that shows the benefits of remote work but have seen the extensive data which supports that experience.”
Not everyone believes the sky is falling. Lydia Leong, a cloud computing analyst at Gartner, wrote on her own blog about how “the myth of cloud repatriation refuses to die.” A large part of this, Leong writes, is in how surveys and anecdotal news stories confuse various versions of “repatriation” from managed service providers to self-hosted infrastructure.
“None of these things are in any way equivalent to the notion that there’s a broad or even common movement of workloads from the cloud back on-premises, though, especially for those customers who have migrated entire data centers or the vast majority of their IT estate to the cloud,” writes Leong.
Both Leong and Rich Hoyer, director of the FinOps group at SADA, suggest that framing the issue as simply “cloud versus on-premises” is too simplistic. A poorly architected split between cloud and on-prem, vague goals and measurements of cloud “cost” and “success,” and fuzzy return-on-investment math, Hoyer writes, are feeding alarmist takes on cloud costs.
For its part, AWS has itself testified that it faces competition from the on-premises IT movement, although it did so as part of a “Cloud Services Market Investigation” by UK market competition authorities. Red Hat and Citrix have suggested that, at a minimum, hybrid approaches have regained ground after a period of cloud primacy.
Those kinds of measured approaches don’t have the same broad reach as declaring an “exit” and putting a very round number on it, but it’s another interesting data point.
Ars has reached out to AWS and will update this post with comment.
Amazon workers are being reminded that they can find work elsewhere if they’re unhappy with Amazon’s return-to-office (RTO) mandate.
In September, Amazon told staff that they’ll have to RTO five days a week starting in 2025. Amazon employees are currently allowed to work remotely twice a week. A memo from CEO Andy Jassy announcing the policy change said that “it’s easier for our teammates to learn, model, practice, and strengthen our culture” when working at the office.
On Thursday, at what Reuters described as an “all-hands meeting” for Amazon Web Services (AWS), AWS CEO Matt Garman reportedly told workers:
If there are people who just don’t work well in that environment and don’t want to, that’s okay, there are other companies around.
Garman said that he didn’t “mean that in a bad way,” however, adding: “We want to be in an environment where we’re working together. When we want to really, really innovate on interesting products, I have not seen an ability for us to do that when we’re not in-person.”
Interestingly, Garman’s comments about dissatisfaction with the RTO policy coincided with him claiming that 9 out of 10 Amazon employees that he spoke to are in support of the RTO mandate, Reuters reported.
Some suspect RTO mandates are attempts to make workers quit
Amazon has faced resistance to RTO since pandemic restrictions were lifted. Like workers at other companies, some Amazon employees have publicly wondered if strict in-office policies are being enacted as attempts to reduce headcount without layoffs.
In July 2023, Amazon started requiring employees to work in their team’s central hub location (as opposed to remotely or in an office that may be closer to where they reside). Amazon reportedly told workers that if they didn’t comply or find a new job internally, they’d be considered a “voluntary resignation,” per a Slack message that Business Insider reportedly viewed. And many Amazon employees have already reported considering looking for a new job due to the impending RTO requirements.
However, employers like Amazon “can face an array of legal consequences for encouraging workers to quit via their RTO policies,” Helen D. (Heidi) Reavis, managing partner at Reavis Page Jump LLP, an employment, dispute resolution, and media law firm, told Ars Technica:
What’s with the sudden interest in nuclear power among tech titans?
Fuel pellets flow down the reactor (left), as gas transfer heat to a boiler (right). Credit: X-energy
On Tuesday, Google announced that it had made a power purchase agreement for electricity generated by a small modular nuclear reactor design that hasn’t even received regulatory approval yet. Today, it’s Amazon’s turn. The company’s Amazon Web Services (AWS) group has announced three different investments, including one targeting a different startup that has its own design for small, modular nuclear reactors—one that has not yet received regulatory approval.
Unlike Google’s deal, which is a commitment to purchase power should the reactors ever be completed, Amazon will lay out some money upfront as part of the agreements. We’ll take a look at the deals and technology that Amazon is backing before analyzing why companies are taking a risk on unproven technologies.
Money for utilities and a startup
Two of Amazon’s deals are with utilities that serve areas where it already has a significant data center footprint. One of these is Energy Northwest, which is an energy supplier that sends power to utilities in the Pacific Northwest. Amazon is putting up the money for Energy Northwest to study the feasibility of adding small modular reactors to its Columbia Generating Station, which currently houses a single, large reactor. In return, Amazon will get the right to purchase power from an initial installation of four small modular reactors. The site could potentially support additional reactors, which Energy Northwest would be able to use to meet demands from other users.
The deal with Virginia’s Dominion Energy is similar in that it would focus on adding small modular reactors to Dominion’s existing North Anna Nuclear Generating Station. But the exact nature of the deal is a bit harder to understand. Dominion says the companies will “jointly explore innovative ways to advance SMR development and financing while also mitigating potential cost and development risks.”
Should either or both of these projects go forward, the reactor designs used will come from a company called X-energy, which is involved in the third deal Amazon is announcing. In this case, it’s a straightforward investment in the company, although the exact dollar amount is unclear (the company says Amazon is “anchoring” a $500 million round of investments). The money will help finalize the company’s reactor design and push it through the regulatory approval process.
Small modular nuclear reactors
X-energy is one of several startups attempting to develop small modular nuclear reactors. The reactors all have a few features that are expected to help them avoid the massive time and cost overruns associated with the construction of large nuclear power stations. In these small reactors, the limited size allows them to be made at a central facility and then be shipped to the power station for installation. This limits the scale of the infrastructure that needs to be built in place and allows the assembly facility to benefit from economies of scale.
This also allows a great deal of flexibility at the installation site, as you can scale the facility to power needs simply by adjusting the number of installed reactors. If demand rises in the future, you can simply install a few more.
The small modular reactors are also typically designed to be inherently safe. Should the site lose power or control over the hardware, the reactor will default to a state where it can’t generate enough heat to melt down or damage its containment. There are various approaches to achieving this.
X-energy’s technology is based on small, self-contained fuel pellets called TRISO particles for TRi-structural ISOtropic. These contain both the uranium fuel and a graphite moderator and are surrounded by a ceramic shell. They’re structured so that there isn’t sufficient uranium present to generate temperatures that can damage the ceramic, ensuring that the nuclear fuel will always remain contained.
The design is meant to run at high temperatures and extract heat from the reactor using helium, which is used to boil water and generate electricity. Each reactor can produce 80 megawatts of electricity, and the reactors are designed to work efficiently as a set of four, creating a 320 MW power plant. As of yet, however, there are no working examples of this reactor, and the design hasn’t been approved by the Nuclear Regulatory Commission.
Why now?
Why is there such sudden interest in small modular reactors among the tech community? It comes down to growing needs and a lack of good alternatives, even given the highly risky nature of the startups that hope to build the reactors.
It’s no secret that data centers require enormous amounts of energy, and the sudden popularity of AI threatens to raise that demand considerably. Renewables, as the cheapest source of power on the market, would be one way of satisfying that growth, but they’re not ideal. For one thing, the intermittent nature of the power they supply, while possible to manage at the grid level, is a bad match for the around-the-clock demands of data centers.
The US has also benefitted from over a decade of efficiency gains keeping demand flat despite population and economic growth. This has meant that all the renewables we’ve installed have displaced fossil fuel generation, helping keep carbon emissions in check. Should newly installed renewables instead end up servicing rising demand, it will make it considerably more difficult for many states to reach their climate goals.
Finally, renewable installations have often been built in areas without dedicated high-capacity grid connections, resulting in a large and growing backlog of projects (2.6 TW of generation and storage as of 2023) that are stalled as they wait for the grid to catch up. Expanding the pace of renewable installation can’t meet rising server farm demand if the power can’t be brought to where the servers are.
These new projects avoid that problem because they’re targeting sites that already have large reactors and grid connections to use the electricity generated there.
In some ways, it would be preferable to build more of these large reactors based on proven technologies. But not in two very important ways: time and money. The last reactor completed in the US was at the Vogtle site in Georgia, which started construction in 2009 but only went online this year. Costs also increased from $14 billion to over $35 billion during construction. It’s clear that any similar projects would start generating far too late to meet the near-immediate needs of server farms and would be nearly impossible to justify economically.
This leaves small modular nuclear reactors as the least-bad option in a set of bad options. Despite many startups having entered the space over a decade ago, there is still just a single reactor design approved in the US, that of NuScale. But the first planned installation saw the price of the power it would sell rise to the point where it was no longer economically viable due to the plunge in the cost of renewable power; it was canceled last year as the utilities that would have bought the power pulled out.
The probability that a different company will manage to get a reactor design approved, move to construction, and manage to get something built before the end of the decade is extremely low. The chance that it will be able to sell power at a competitive price is also very low, though that may change if demand rises sufficiently. So the fact that Amazon is making some extremely risky investments indicates just how worried it is about its future power needs. Of course, when your annual gross profit is over $250 billion a year, you can afford to take some risks.
John is Ars Technica’s science editor. He has a Bachelor of Arts in Biochemistry from Columbia University, and a Ph.D. in Molecular and Cell Biology from the University of California, Berkeley. When physically separated from his keyboard, he tends to seek out a bicycle, or a scenic location for communing with his hiking boots.
The Apple TV platform, tvOS, and the original Apple TV app were initially intended to solve this problem by offering an a la carte, consumer-friendly way to manage the options in a burgeoning streaming-TV industry.
However, Apple’s attempt to make the TV app a universal hub of content has been continually stymied by the fact that industry giant Netflix has declined to participate.
Users of the TV app and Apple TV set-top-box still must launch a separate Netflix app to see their watch history on that service, or to see if movies or shows they want to watch are available. Content from most other services—including Amazon Prime Video—is exposable through search within the app and rolls into a unified watch history.
Fighting to succeed in a messy business
Further, streaming services have become increasingly expensive, and streamers have begun trying to find new revenue from sources like bundles and advertising. The reasons for these trends are complex, but one of the key problems is that scripted television content is immensely expensive to produce—especially as the prestige TV era has driven up viewer expectations in terms of quality and production values.
As an early leader in the industry, Netflix established unrealistic expectations for everyone involved—consumers, production houses, investors, and so on—by simply throwing immense amounts of money into content without immediately seeing a return.
When larger economic factors put an end to that practice, streamers had to adjust—including Apple, which among other things is tweaking its film strategy for the new landscape.
Apple still offers several of those central hub features—for example, you can subscribe to services like Paramount+ and launch their shows from the Apple TV app, just like Amazon is doing with its app and Apple TV+ here. But the realities of the mess the industry finds itself in have clearly led Apple to keep an open mind about how it can attract and retain viewers.
The National Labor Relations Board (NLRB) has filed charges against Amazon, alleging that the e-commerce giant has illegally refused to bargain with a union representing drivers who are frustrated by what they claim are low wages and dangerous working conditions.
Back in August, drivers celebrated what they considered a major win when the NLRB found that Amazon was a joint employer of sub-contracted drivers, cheering “We are Amazon workers!” At that time, Amazon seemed to be downplaying the designation, telling Ars that the union was trying to “misrepresent” a merit determination that the NLRB confirmed was only “the first step in the NLRB’s General Counsel litigating the allegations after investigating an unfair labor practice charge.”
Amazon has found itself in increasingly hot water ever since the Palmdale drivers joined the International Brotherhood of Teamsters union in 2021. The NLRB’s complaint called out Amazon for terminating its contract with the unionized drivers without ever engaging in bargaining.
The tech company could have potentially avoided the NLRB charges if Amazon had settled with drivers, who claimed that rather than negotiate, Amazon had intimidated employees with security guards and illegally retaliated against workers unionizing.
Although Amazon recently invested $2.1 billion—its “biggest investment yet”—to improve driver safety and increase drivers’ wages, Amazon apparently did not do enough to settle drivers’ complaints.
The NLRB said in a press release sent to Ars that the complaint specifically alleged that “Amazon failed and refused to bargain” with Teamsters “and that it did not afford the union the opportunity to bargain over the effects of terminating” the Palmdale drivers’ contract, “increasing inspections, reducing and termination routes, and terminating employees in the bargaining unit.” Additionally, “the complaint further alleged that Amazon made unlawful threats and promises, held captive audience meetings, delayed employee start times and increased vehicle inspections to discourage union activities, and failed and refused to furnish information to the union.”
Enlarge/ A still from Wolfs, an Apple-produced film starring George Clooney and Brad Pitt.
Apple
For the past few years, Apple has been making big-budget movies meant to compete with the best traditional Hollywood studios have to offer, and it has been releasing them in theaters to drive ticket sales and awards buzz.
Much of that is about to change, according to a report from Bloomberg. The article claims that Apple is “rethinking its movie strategy” after several box office misfires, like Argylle and Napoleon.
It has already canceled the wide theatrical release of one of its tent pole movies, the George Clooney and Brad Pitt-led Wolfs. Most other upcoming big-budget movies from Apple will be released in just a few theaters, suggesting the plan is simple to ensure continued awards eligibility but not to put butts in seats.
Further, Apple plans to move away from super-budget films and to focus its portfolio on a dozen films a year at lower budgets. Just one major big-budget film is planned to get a wide theatrical release: F1. How that one performs could inform future changes to Apple’s strategy.
The report notes that Apple is not the only streamer changing its strategy. Netflix is reducing costs and bringing more movie production in-house, while Amazon is trying (so far unsuccessfully) to produce a higher volume of movies annually, but with a mixture of online-only and in-theater releases. It also points out that movie theater chains are feeling ever more financial pressure, as overall ticket sales haven’t matched their pre-pandemic levels despite occasional hits like Inside Out 2 and Deadpool & Wolverine.
Cinemas have been counting on streamers like Netflix and Apple to crank out films, but those hopes may be dashed if the media companies continue to pull back. For the most part, tech companies like Apple and Amazon have had better luck gaining buzz with television series than with feature films.
Enlarge/ Warehouse workers at the STL8 Amazon Fulfillment Center marched on the boss Wednesday to demand a $25 an hour minimum wage for all workers.
via Justice Speaks
Amazon currently faces disgruntled workers in every direction.
Office workers are raging against CEO Andy Jassy’s return to office mandate, Fortune reported—which came just as a leaked document reportedly showed that Amazon is also planning to gut management, Business Insider reported. Drivers by the hundreds are flocking to join a union to negotiate even better work conditions, CNBC reported, despite some of the biggest concessions in Amazon’s history. And hundreds more unionized warehouse workers are increasingly banding together nationwide to demand a $25 an hour minimum wage. On Wednesday, workers everywhere were encouraged to leave Jassy a voicemail elevating workers’ demands for a $25 minimum wage.
Putting on the pressure
This momentum has been building for years after drivers unionized in 2021. And all this collective fury increasingly appears to be finally pressuring Amazon into negotiating better conditions for some workers.
Just last week, Amazon ponied up $2.1 billion—its “biggest investment yet”—to improve driver safety and increase drivers’ wages.
Unionizing warehouse workers told Ars that they’re seeking a similar investment from Amazon, which currently pays on average a $20.50 minimum wage.
“We work at a breakneck pace,” Christine Manno, an Amazon Fulfillment Center worker at Amazon site STL8 in St. Louis, Missouri, who was injured and never expects to work again, told Ars. “We put smiles on the billionaire’s faces, and we feel it’s prime time for a real raise for the employees. There’s too many of us struggling with food and housing, yet Andy Jassy took home over $14,000 an hour last year and Amazon is making billions in profit.”
On Wednesday, Amazon seemed to finally bend to the warehouse workers’ pressure, announcing a compromise on wage increases. The company said it was investing $2.2 billion to raise the base salaries of hourly fulfillment workers to “more than $22 an hour, and more than $29 an hour including benefits,” Reuters reported. Amazon’s spokesperson told Ars that STL8 workers’ starting wage “increased to $19 per hour coupled with our industry-leading benefits” and claimed that the company’s “biggest ever investment” in fulfillment workers was simply “part of an annual process where we review wages and benefits to ensure they stay competitive—and in many cases industry-leading.”
But while workers claimed the victory, they’re not going to sit back and take the pay bump. An STL8 worker on the organizing committee with Manno, Ash Judd, told Ars that workers “made this $1.50 raise happen through our tireless organizing, and we’ll keep fighting until we reach $25.”
Because of recent gains and the increasingly dire economic plight of workers, Amazon workers likely won’t be easing off the e-commerce giant any time soon. Some office workers told Fortune they are seeking other remote work to avoid returning to the office, threatening to “soft quit” and claiming that Amazon is going “backwards” with a stricter office policy than pre-COVID times. “This is a layoff in disguise,” one apparent worker complained on Reddit. “Return to the office or you’re fired and we don’t have to pay any severance or unemployment.”
With so many workers upset, it could now be a question of when Amazon will cave to their growing demands—not if—according to Beth Gutelius, the research director of the University of Illinois Chicago’s Center for Urban Economic Development.
“Research shows that the presence of collective bargaining agreements creates upward pressure on wages and working conditions, both in facilities that are unionized and those that are not,” Gutelius told Ars. “Based on that evidence, I would expect working conditions at Amazon to improve.”
Gutelius co-authored a May report documenting the financial insecurity of Amazon warehouse workers by surveying more than 1,400 across 42 states.
Enlarge/ A promotional image for Amazon’s 4-Series Fire TVs.
A lawsuit is seeking to penalize Amazon for allegedly providing “fake list prices and purported discounts” to mislead people into buying Fire TVs.
As reported by Seattle news organization KIRO 7, a lawsuit seeking class-action certification and filed in US District Court for the Western District of Washington on September 12 [PDF] claims that Amazon has been listing Fire TV and Fire TV bundles with “List Prices” that are higher than what the TVs have recently sold for, thus creating “misleading representation that customers are getting a ‘Limited time deal.'” The lawsuit accuses Amazon of violating Washington’s Consumer Protection Act.
The plaintiff, David Ramirez, reportedly bought a 50-inch 4-Series Fire TV in February for $299.99. The lawsuit claims the price was listed as 33 percent off and a “Limited time deal” and that Amazon “advertised a List Price of $449.99, with the $449.99 in strikethrough text.” As of this writing, the 50-inch 4-Series 4K TV on Amazon is marked as having a “Limited time deal” of $299.98.
Camelcamelcamel, which tracks Amazon prices, claims that the cheapest price of the TV on Amazon was $280 in July. The website also claims that the TV’s average price is $330.59; the $300 or better deal seems to have been available on dates in August, September, October, November, and December of 2023, as well as in July, August, and September 2024. The TV was most recently sold at the $449.99 “List Price” in October 2023 and for short periods in July and August 2024, per Camelcamelcamel.
Enlarge/ The 50-inch 4-Series Fire TV’s Amazon price history, according to Camelcamelcamel.
Amazon’s website has an information icon next to “List Prices” that, when hovered over, shows a message stating: “The List Price is the suggested retail price of a new product as provided by a manufacturer, supplier, or seller. Except for books, Amazon will display a List Price if the product was purchased by customers on Amazon or offered by other retailers at or above the List Price in at least the past 90 days. List prices may not necessarily reflect the product’s prevailing market price.”
The lawsuit against Amazon alleges that Amazon is claiming items were sold at their stated List Price within 90 days but were not:
… this representation is false and misleading, and Amazon knows it. Each of the Fire TVs in this action was sold with advertised List Price that were not sold by Amazon at or above those prices in more than 90 days, making the above statement, as well as the sales prices and percentage discounts, false and misleading. As of September 10, 2024, most of the Fire TVs were not sold at the advertised List Prices since 2023 but were instead consistently sold well below (often hundreds of dollars below) the List Prices during the class period.
When contacted by Ars Technica, an Amazon spokesperson said that the company doesn’t comment on ongoing litigation.
The lawsuit seeks compensatory and punitive damages and an injunction against Amazon.
“Amazon tricks its customers”
The lawsuit claims that “misleading” List Prices harm customers while also allowing Amazon to create a “false” sense of urgency to get a discount. The lawsuit alleges that Amazon has used misleading practices for 15 Fire TV models/bundles.
The lawsuit claims that in some cases, the List Price was only available for “an extremely short period, in some instances as short as literally one day.“
The suit reads:
Amazon tricks its customers into buying Fire TVs by making them believe they are buying Fire TVs at steep discounts. Amazon omits critical information concerning how long putative “sales” would last, and when the List Prices were actually in use, which Plaintiff and class members relied on to their detriment. Amazon’s customers spent more money than they otherwise would have if not for the purported time-limited bargains.
Further, Amazon is accused of using these List Price tactics to “artificially” drive Fire TV demand, putting “upward pressure on the prices that” Amazon can charge for the smart TVs.
The legal document points to a similar 2021 case in California [PDF], where Amazon was sued for allegedly deceptive reference prices. It agreed to pay $2 million in penalties and restitution.
Other companies selling electronics have also been scrutinized for allegedly making products seem like they typically and/or recently have sold for more money. For example, Dell Australia received an AUD$10 million fine (about $6.49 million) for “making false and misleading representations on its website about discount prices for add-on computer monitors,” per the Australian Competition & Consumer Commission.
Now’s a good time to remind friends and family who frequently buy tech products online to use price checkers like Camelcamelcamel and PCPartPicker to compare products with similar specs and features across different retailers.
