Amazon

gen-ai-alexa-to-use-anthropic-tech-after-it-“struggled-for-words”-with-amazon’s

Gen AI Alexa to use Anthropic tech after it “struggled for words” with Amazon’s

AI, Amazon, amazon alexa, Anthrophic, generative ai, Tech / /

Subscription Alexa —

Amazon’s $4 billion investment in Anthropic has been under investigation.

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Amazon Alexa using generative AI on an Echo Show

Enlarge / Generative AI Alexa asked to make a taco poem.

The previously announced generative AI version of Amazon’s Alexa voice assistant “will be powered primarily by Anthropic’s Claude artificial intelligence models,” Reuters reported today. This comes after challenges with using proprietary models, according to the publication, which cited five anonymous people “with direct knowledge of the Alexa strategy.”

Amazon demoed a generative AI version of Alexa in September 2023 and touted it as being more advanced, conversational, and capable, including the ability to do multiple smart home tasks with simpler commands. Gen AI Alexa is expected to come with a subscription fee, as Alexa has reportedly lost Amazon tens of billions of dollars throughout the years. Earlier reports said the updated voice assistant would arrive in June, but Amazon still hasn’t confirmed an official release date.

Now, Reuters is reporting that Amazon will no longer use its own large language models as the new Alexa’s primary driver. Early versions of gen AI Alexa based on Amazon’s AI models “struggled for words, sometimes taking six or seven seconds to acknowledge a prompt and reply,” Reuters said, citing one of its sources. Without specifying versions or features used, Reuters’ sources said Claude outperformed proprietary software.

In a statement to Reuters, Amazon didn’t deny using third-party models but claimed that its own tech is still part of Alexa:

Amazon uses many different technologies to power Alexa.

When it comes to machine learning models, we start with those built by Amazon, but we have used, and will continue to use, a variety of different models—including (Amazon AI model) Titan and future Amazon models, as well as those from partners—to build the best experience for customers.

Amazon has invested $4 billion in Anthropic (UK regulators are currently investigating this). It’s uncertain if Amazon’s big investment in Anthropic means that Claude can be applied to Alexa for free. Anthropic declined to comment on Reuters’ report.

The new Alexa may be delayed

On Monday, The Washington Post reported that Amazon wants to launch the new Alexa in October, citing internal documents. However, Reuters’ sources claimed that this date could be pushed back if the voice assistant fails certain unspecified internal benchmarks.

The Post said gen AI Alexa could cost up to $10 per month, according to the documents. That coincides with a June Reuters report saying that the service would cost $5 to $10 per month. The Post said Amazon would finalize pricing and naming in August.

But getting people to open their wallets for a voice assistant already associated with being free will be difficult (free Alexa is expected to remain available after the subscription version releases). Some Amazon employees are questioning if people will really pay for Alexa, Reuters noted. Amazon is facing an uphill battle with generative AI, which is being looked at as a last shot for Alexa amid big competition and leads from other AI offerings, including free ones like ChatGPT.

In June, Bank of America analysts estimated that Amazon could make $600 million to $1.2 billion in annual sales with gen AI Alexa, depending on final monthly pricing. This is under the assumption that 10 percent of an estimated 100 million active Alexa users (Amazon says it has sold 500 million Alexa-powered gadgets) will upgrade. But analysts noted that free alternatives would challenge the adoption rate.

The Post’s Monday report said the new Alexa will try winning over subscribers with features like AI-generated news summaries. This Smart Briefing feature will reportedly share summaries based on user preferences on topics including politics, despite OG Alexa’s previous problems with reporting accurate election results. The publication also said that gen AI Alexa would include “a chatbot aimed at children” and “conversational shopping tools.”

Gen AI Alexa to use Anthropic tech after it “struggled for words” with Amazon’s Read More »

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Labor board confirms Amazon drivers are employees, in finding hailed by union

Amazon, amazon delivery, amazon drivers, California, labor laws, national labor relations board, nlrb, Policy, teamsters, unfair business practices, unfair labor practices / /

Driving a hard bargain —

“We are Amazon workers”: Delivery drivers celebrate labor board finding.

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Labor board confirms Amazon drivers are employees, in finding hailed by union

Amazon may be forced to meet some unionized delivery drivers at the bargaining table after a regional National Labor Relations Board (NLRB) director determined Thursday that Amazon is a joint employer of contractors hired to ensure the e-commerce giant delivers its packages when promised.

This seems like a potentially big loss for Amazon, which had long argued that delivery service partners (DSPs) exclusively employed the delivery drivers, not Amazon. By rejecting its employer status, Amazon had previously argued that it had no duty to bargain with driver unions and no responsibility for alleged union busting, The Washington Post reported.

But now, after a yearlong investigation, the NLRB has issued what Amazon delivery drivers’ union has claimed was “a groundbreaking decision that sets the stage for Amazon delivery drivers across the country to organize with the Teamsters.”

In a press release reviewed by Ars, the NLRB regional director confirmed that as a joint employer, Amazon had “unlawfully failed and refused to bargain with the union” after terminating their DSP’s contract and terminating “all unionized employees.” The NLRB found that rather than bargaining with the union, Amazon “delayed start times by grounding vans and not preparing packages for loading,” withheld information from the union, and “made unlawful threats.” Teamsters said those threats included “job loss” and “intimidating employees with security guards.”

Sean M. O’Brien, the Teamsters general president, claimed the win for drivers unionizing not just in California but for nearly 280,000 drivers nationwide.

“Amazon drivers have taken their future into their own hands and won a monumental determination that makes clear Amazon has a legal obligation to bargain with its drivers over their working conditions,” O’Brien said. “This strike has paved the way for every other Amazon worker in the country to demand what they deserve and to get Amazon to the bargaining table.”

Unless a settlement is reached, the NLRB will soon “issue a complaint against Amazon and prosecute the corporate giant at a trial” after finding that “Amazon engaged in a long list of egregious unfair labor practices at its Palmdale facility,” Teamsters said.

Apparently downplaying the NLRB determination, Amazon is claiming that the Teamsters are trying to “misrepresent what is happening here.” Seemingly Amazon is taking issue with the union claiming that an NLRB determination on the merits of their case is a major win when the NLRB has yet to issue a final ruling.

According to the NLRB’s press release, “a merit determination is not a ‘Board decision/ruling’—it is the first step in the NLRB’s General Counsel litigating the allegations after investigating an unfair labor practice charge.”

Amazon’s spokesperson, Eileen Hards, told Ars that the NLRB office confirmed to Amazon that it will be “dismissing most of the Teamsters’ more significant claims it filed last year in Palmdale.” That apparently includes dismissing the Teamsters’ claims that Amazon unlawfully terminated its contract with one of their DSPs and that Amazon had a legal obligation to honor the Teamsters’ contract with that DSP.

Next, the NLRB will determine if the “remaining allegations should be decided by an administrative law judge,” Hards said. After that, Amazon will have opportunities to appeal any unfavorable rulings, first to the Board and then to a federal appeals court, the NLRB confirmed to Ars.

Hards confirmed that Amazon still expects all the Teamsters’ remaining claims will be dismissed.

“As we have said all along, there is no merit to the Teamsters’ claims,” Hards told Ars. “If and when the agency decides it wants to litigate the remaining allegations, we expect they will be dismissed as well.”

But Hards declined to comment on the impacts of the NLRB’s determination that Amazon is a joint employer of the unionized delivery drivers.

One Amazon driver in Palmdale, Jessie Moreno, said that worker conditions for Amazon drivers could improve because of the determination.

“Amazon can no longer dodge responsibility for our low wages and dangerous working conditions, and it cannot continue to get away with committing unfair labor practices,” Moreno said. “We are Amazon workers, and we are holding Amazon accountable.”

Amazon drivers uniting “like never before”

The NLRB determination came following a complaint from 84 Amazon workers from Palmdale, California, who became the first Amazon delivery drivers to unionize in April 2023, represented by Teamsters Local 396.

While their DSP recognized the union, workers launched an unfair labor strike in June 2023 after Amazon allegedly “engaged in dozens of unfair labor practices in violation of federal labor law in an effort to quash workers’ organizing efforts,” the Teamsters said.

The picket line quickly expanded “to over 50 Amazon warehouses across 10 states,” the Teamsters said. Most recently, drivers in Skokie, Illinois, “launched their own unfair labor practice strike in June 2024,” right around the same time that “more than 5,500 members of the Amazon Labor Union in New York voted by an overwhelming 98.3 percent to affiliate with the Teamsters.”

In their blog, the Teamsters said that Amazon “has avoided responsibility for its drivers through its DSP subcontractor business model” since 2018, but drivers hope that yesterday’s NLRB determination could put an end to the dodgy tactic.

“The NLRB’s joint employer determination shatters that myth” that “DSP drivers are not official employees of Amazon” and “makes clear that through its DSP business model, Amazon exercises widespread control over drivers’ labor and working conditions, making Amazon the drivers’ employer,” the Teamsters said.

The Teamsters said that they are “confident” that “the NLRB’s regional determination for the Palmdale workers will extend to Amazon DSP drivers who unionize nationwide.” One union member and Amazon driver, Brandi Diaz, celebrated what she considered to be the US government recognizing that the DSP program is a “sham.”

“We wear Amazon uniforms, we drive Amazon vans, and Amazon controls every minute of our day,” Diaz said. “Amazon can no longer have all the benefits of their own fleet of drivers without the responsibilities that come with it. The time has come for Amazon drivers across the country to organize with the Teamsters and demand what we deserve.”

Drivers are currently fighting to increase wages and improve driver safety amid what they claim are unchecked dangerous conditions they must navigate as Amazon drivers. Moreno said that the NLRB determination was a significant step toward unionizing more drivers and ending Amazon’s allegedly unfair labor practices nationwide.

“We have been on strike to stop Amazon’s lawbreaking and we are winning at the NLRB, while we are uniting Amazon workers across the country like never before,” Moreno said.

Labor board confirms Amazon drivers are employees, in finding hailed by union Read More »

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Amazon is bricking primary feature on $160 Echo device after 1 year

Amazon, amazon alexa, Smart Home, Tech / /

Echo Show 8 Photos Edition —

Smart display will soon default to showing ads after three hours.

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echo show 8 video call

In September of 2023, Amazon announced the Echo Show 8 Photos Edition. It looked just like the regular Echo Show 8 smart display/speaker but cost $10 more. Why? Because of its ability to show photos on the home screen for as long as you want—if you signed up for a $2 monthly subscription to Amazon’s PhotosPlus. Now, about a year after releasing the Echo Show 8 Photos Edition, Amazon is announcing that it’s discontinuing PhotosPlus. That means Echo Show 8 Photos Edition users will be forced to see ads instead of their beloved pics.

As per The Verge yesterday, Amazon started sending PhotosPlus subscribers emails saying that it will automatically cancel all PhotosPlus subscriptions on September 12 and will stop supporting PhotosPlus as of September 23. PhotosPlus, per Amazon’s message, “makes photos the primary home screen content you see on your Echo Show 8 and includes 25 GB of storage with Amazon Photos,” Amazon’s online photo storage offering. Users can continue using the 25GB of Amazon Photos storage after September.

However, users will no longer be able to make photos the indefinite home screen on the Alexa gadget. After September, their devices will no longer have the “photo-forward mode” that Amazon advertised for the Echo Show 8 Photos Edition. The photo-forward mode, per Amazon, let people make “selected personal photos the primary rotating content on the ambient screen” (photos rotated every 30 seconds). Now, Echo Show 8 Photo Editions will work like a regular Echo Show 8 and default to showing ads and promotions after three hours.

“The end of my Echo Show 8”

Amazon never explained why owners of the standard Echo Show 8 couldn’t use PhotosPlus or the photo-forward mode. The devices looked identical. It’s possible that the Photos Edition used extra hardware, but it’s likely that the Photos Edition’s $10 premium was meant to offset the lost ad revenue.

But now people who bought into the Photos Edition could feel like the victims of a bait-and-switch. After paying $10 extra to get a device capable of displaying photos indefinitely instead of ads, they’ll be forced into the same user experience as the cheaper Echo Show 8.

“I really have zero interest in keeping it if it’s going to show ads all day,” Reddit user Misschiff0 said in response to the news. “Sadly, this is the end of my Echo Show 8.”

Other apparent customers have discussed abandoning the Echo line entirely in response to the changes. As Reddit user Raybreezer wrote:

I’m dying for a replacement smart home speaker with a screen that’s not Google. Every day I hate the echo [sic] line more and more.

PhotosPlus was always a tough sell

Amazon may make more money selling ads than it has selling PhotosPlus subscriptions and relevant hardware. It was always somewhat peculiar that PhotosPlus only applied to one Amazon device. Amazon might have been considering extending PhotosPlus to other devices but didn’t get enough interest or money from the venture. Getting people to pay monthly for a feature that some would argue the gadget should already support out of the box seems difficult.

Amazon spokesperson Courtney Ramirez told The Verge that Amazon discontinued the Echo Show 8 Photos Edition in March, noting that Amazon regularly evaluates “products and services based on customer feedback” and that users can still get their Echo Show 8 Photos Editions to show photos.

But it’s hard to overlook Amazon discontinuing a product after about only six months and then bricking the device’s exclusive feature only a year after release. The short-lived Echo Show 8 Photos Edition and PhotosPlus service are joining Amazon’s graveyard of gadgets, which include the discontinued Astro business robot, Just Walk Out, Amazon Glow, Fire Phone, Dash buttons, and the Amazon Smart Oven.

Amazon’s quick discontinuation of the smart display and PhotosPlus is emblematic of its struggles to find a lucrative purpose and significant revenue source for Alexa-powered devices. Reports have claimed that Alexa went without a profit timeline for years and has cost Amazon tens of billions of dollars.

Amazon is banking on the upcoming generative AI version of Alexa being so good that people will pay a subscription fee to use it. But with tough competition, generative AI implementations varying in accuracy and relevance, and some consumers already turned off by consumer gadgets’ AI marketing hype, it’ll be hard for Amazon to turn things around. A premium-priced Alexa device losing its main feature after a year doesn’t instill confidence in future Amazon products either.

Amazon is bricking primary feature on $160 Echo device after 1 year Read More »

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Your TV set has become a digital billboard. And it’s only getting worse.

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Your TV set has become a digital billboard. And it’s only getting worse.

Aurich Lawson | Getty Images

The TV business isn’t just about selling TVs anymore. Companies are increasingly seeing viewers, not TV sets, as their most lucrative asset.

Over the past few years, TV makers have seen rising financial success from TV operating systems that can show viewers ads and analyze their responses. Rather than selling as many TVs as possible, brands like LG, Samsung, Roku, and Vizio are increasingly, if not primarily, seeking recurring revenue from already-sold TVs via ad sales and tracking.

How did we get here? And what implications does an ad- and data-obsessed industry have for the future of TVs and the people watching them?

The value of software

Success in the TV industry used to mean selling as many TV sets as possible. But with smart TVs becoming mainstream and hardware margins falling, OEMs have sought new ways to make money. TV OS providers can access a more frequent revenue source at higher margins, which has led to a viewing experience loaded with ads. They can be served from the moment you pick up your remote, which may feature streaming service ads in the form of physical buttons.

Some TV brands already prioritize data collection and the ability to sell ads, and most are trying to boost their appeal to advertisers. Smart TV OSes have become the cash cow of the TV business, with providers generating revenue by licensing the software and through revenue sharing of in-app purchases and subscriptions.

A huge part of TV OS revenue comes from selling ads, including on the OS’s home screen and screensaver and through free, ad-supported streaming television channels. GroupM, the world’s largest media investment company, reported that smart TV ad revenue grew 20 percent from 2023 to 2024 and will grow another 20 percent to reach $46 billion next year. In September 2023, Patrick Horner, practice leader of consumer electronics at analyst Omdia, reported that “each new connected TV platform user generates around $5 per quarter in data and advertising revenue.”

Automatic content recognition (ACR) tech is at the heart of the smart TV ads business. Most TV brands say users can opt out of ACR, but we’ve already seen Vizio take advantage of the feature without user permission. ACR is also sometimes turned on by default, and the off switch is often buried in a settings menu. Including ACR on a TV at all says a lot about a TV maker’s priorities. Most users have almost nothing to gain from ACR and face privacy concerns by sharing information—sometimes in real time—about what they do with their TVs.

At this point, consumers have come to expect ads and tracking on budget TVs from names like Vizio or Roku. But the biggest companies in TV are working on turning their sets into data-prolific billboards, too.

When TVs watch you back, so do corporations

In recent years, we’ve seen companies like LG and Samsung increase their TVs’ ad capabilities as advertisers become more eager to access tracking data from TVs.

LG, for example, started sharing data gathered from its TVs with Nielsen, giving the data and market measurement firm “the largest ACR data footprint in the industry,” according to an October announcement. The deal gives Nielsen streaming and linear TV data from LG TVs and provides firms buying ads on LG TVs with “‘Always On’ streaming measurement and big data from LG Ad Solutions” via Nielsen’s ONE Ads dashboard.

LG, which recently unveiled a goal of evolving its hardware business into an ad-pushing “media and entertainment platform company,” expects there to be 300 million webOS TVs in homes by 2026. That represents a huge data-collection and recurring-revenue opportunity. In September, LG said it would invest 1 trillion KRW (about $737.7 million) through 2028 into its “webOS business,” or the business behind its smart TV OS. The company said updates will include improving webOS’s UI, AI-based recommendations, and search capabilities.

Similarly, Samsung recently updated its ACR tech to track exposure to ads viewed on its TVs via streaming services instead of just from linear TV. Samsung is also trying to make its ACR data more valuable for ad targeting, including through a deal signed in December with analytics firm Experian.

Representatives for LG and Samsung declined to comment to Ars Technica about how much of their respective company’s business is ad sales. But the deals they’ve made with data-collection firms signal big interest in turning their products into lucrative smart TVs. In this case, “smart” isn’t about Internet connectivity but rather how well the TV understands its viewer.

Your TV set has become a digital billboard. And it’s only getting worse. Read More »

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Amazon defends $4B Anthropic AI deal from UK monopoly concerns

AI, ai industry, Amazon, Anthropic, anti-competition, cma, competition and markets authority, competition law, foundational models, Policy / /
Amazon defends $4B Anthropic AI deal from UK monopoly concerns

The United Kingdom’s Competition and Markets Authority (CMA) has officially launched a probe into Amazon’s $4 billion partnership with the AI firm Anthropic, as it continues to monitor how the largest tech companies might seize control of AI to further entrench their dominant market positions.

Through the partnership, “Amazon will become Anthropic’s primary cloud provider for certain workloads, including agreements for purchasing computing capacity and non-exclusive commitments to make Anthropic models available on Amazon Bedrock,” the CMA said.

Amazon and Anthropic deny there’s anything wrong with the deal. But because the CMA has seen “some” foundational model (FM) developers “form partnerships with major cloud providers” to “secure access to compute” needed to develop models, the CMA is worried that “incumbent firms” like Amazon “could use control over access to compute to shape FM-related markets in their own interests.”

Due to this potential risk, the CMA said it is “considering” whether Amazon’s partnership with Anthropic “has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets” in the UK.

It’s not clear yet if Amazon’s partnership with Anthropic is problematic, but the CMA confirmed that after a comment period last April, it now has “sufficient information” to kick off this first phase of its merger investigation.

By October 4, this first phase will conclude, after which the CMA may find that the partnership does not qualify as a merger situation, the UK regulator said. Or it may determine that it is a merger situation “but does not raise competition concerns,” clearing Amazon to proceed with the deal.

However, if a merger situation exists, and “it may result in a substantial lessening of competition” in a UK market, the CMA may refer the investigation to the next phase, allowing a panel of independent experts to dig deeper to illuminate potential risks and concerns. If Amazon wants to avoid that deeper probe potentially ordering steep fines, the tech giant would then have the option to offer fixes to “resolve the CMA’s concerns,” the CMA said.

An Amazon spokesperson told Reuters that its “collaboration with Anthropic does not raise any competition concerns or meet the CMA’s own threshold for review.”

“Amazon holds no board seat nor decision-making power at Anthropic, and Anthropic is free to work with any other provider (and indeed has multiple partners),” Amazon’s spokesperson said, defending the deal.

Anthropic’s spokesperson agreed that nothing was amiss, telling Reuters that “our strategic partnerships and investor relationships do not diminish our corporate governance independence or our freedom to partner with others. We intend to cooperate with the CMA and provide them with a comprehensive understanding of Amazon’s investment and our commercial collaboration.”

Amazon defends $4B Anthropic AI deal from UK monopoly concerns Read More »

amazon-forced-to-recall-400k-products-that-could-kill,-electrocute-people

Amazon forced to recall 400K products that could kill, electrocute people

Amazon, Policy, product recall / /
Amazon forced to recall 400K products that could kill, electrocute people

Amazon failed to adequately alert more than 300,000 customers to serious risks—including death and electrocution—that US Consumer Product Safety Commission (CPSC) testing found with more than 400,000 products that third parties sold on its platform.

The CPSC unanimously voted to hold Amazon legally responsible for third-party sellers’ defective products. Now, Amazon must make a CPSC-approved plan to properly recall the dangerous products—including highly flammable children’s pajamas, faulty carbon monoxide detectors, and unsafe hair dryers that could cause electrocution—which the CPSC fears may still be widely used in homes across America.

While Amazon scrambles to devise a plan, the CPSC summarized the ongoing risks to consumers:

If the [products] remain in consumers’ possession, children will continue to wear sleepwear garments that could ignite and result in injury or death; consumers will unwittingly rely on defective [carbon monoxide] detectors that will never alert them to the presence of deadly carbon monoxide in their homes; and consumers will use the hair dryers they purchased, which lack immersion protection, in the bathroom near water, leaving them vulnerable to electrocution.

Instead of recalling the products, which were sold between 2018 and 2021, Amazon sent messages to customers that the CPSC said “downplayed the severity” of hazards.

In these messages—”despite conclusive testing that the products were hazardous” by the CPSC—Amazon only warned customers that the products “may fail” to meet federal safety standards and only “potentially” posed risks of “burn injuries to children,” “electric shock,” or “exposure to potentially dangerous levels of carbon monoxide.”

Typically, a distributor would be required to specifically use the word “recall” in the subject line of these kinds of messages, but Amazon dodged using that language entirely. Instead, Amazon opted to use much less alarming subject lines that said, “Attention: Important safety notice about your past Amazon order” or “Important safety notice about your past Amazon order.”

Amazon then left it up to customers to destroy products and explicitly discouraged them from making returns. The e-commerce giant also gave every affected customer a gift card without requiring proof of destruction or adequately providing public notice or informing customers of actual hazards, as can be required by law to ensure public safety.

Further, Amazon’s messages did not include photos of the defective products, as required by law, and provided no way for customers to respond. The commission found that Amazon “made no effort” to track how many items were destroyed or even do the minimum of monitoring the “number of messages that were opened.”

Amazon still thinks these messages were appropriate remedies, though. An Amazon spokesperson told Ars that Amazon plans to appeal the ruling.

“We are disappointed by the CPSC’s decision,” Amazon’s spokesperson said. “We plan to appeal the decision and look forward to presenting our case in court. When we were initially notified by the CPSC three years ago about potential safety issues with a small number of third-party products at the center of this lawsuit, we swiftly notified customers, instructed them to stop using the products, and refunded them.”

Amazon’s “sidestepped” safety obligations

The CPSC has additional concerns about Amazon’s “insufficient” remedies. It is particularly concerned that anyone who received the products as a gift or bought them on the secondary market likely was not informed of serious known hazards. The CPSC found that Amazon resold faulty hair dryers and carbon monoxide detectors, proving that secondary markets for these products exist.

“Amazon has made no direct attempt to reach consumers who obtained the hazardous products as gifts, hand-me-downs, donations, or on the secondary market,” the CPSC said.

For years, Amazon unsuccessfully tried to argue that it was not required to issue a recall because it was allegedly not legally considered to be a distributor under the Consumer Product Safety Act (CPSA). The commission was not persuaded, however, by Amazon’s argument that it was merely a “logistics provider” for third-party sellers, which would’ve given Amazon safe harbor from product liability under the consumer safety law. Rather than simply providing logistics, however, the CPSC concluded that “Amazon controls the entire sale process.”

“The substantial record before us establishes Amazon’s extensive control over these products, beginning with receipt of a Fulfilled by Amazon participant’s products at an Amazon distribution center, and storage of this inventory until it is purchased by and shipped to a consumer,” the Comission said, concluding that “Amazon cannot sidestep its obligations under the CPSA simply because some portion of its extensive services involves logistics.”

After the CPSC’s testing, Amazon stopped allowing these products to be listed on its platform, but that and other remedies were deemed insufficient. So, over the next two months, to protect the public, Amazon must now make a plan to “provide notice of the product hazards to purchasers and the public” and “incentivize the removal of these hazardous products from consumers’ homes,” the CPSC ordered.

Amazon forced to recall 400K products that could kill, electrocute people Read More »

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Alexa had “no profit timeline,” cost Amazon $25 billion in 4 years

Amazon, amazon alexa, generative ai, Tech / /
In this photo illustration, Echo Dot smart speaker with working Alexa with blue light ring seen displayed.

The Amazon business unit that focuses on Alexa-powered gadgets lost $25 billion between 2017 and 2021, The Wall Street Journal (WSJ) reported this week.

Amazon claims it has sold more than 500,000 Alexa devices, which included Echo speakers, Kindle readers, Fire TV sets and streaming devices, and Blink and Ring smart home security cameras. But since debuting, Alexa, like other voice assistants, has struggled to make money. In late 2022, Business Insider reported that Alexa was set to lose $10 billion that year.

WSJ said it got the $25 billion figure from “internal documents” and that it wasn’t able to determine the Devices business’s losses before or after the shared time period.

“No profit timeline”

WSJ’s report claims to offer insight into how Devices was able to bleed so much money for so long.

For one, it seems like the business unit was allowed some wiggle room in terms of financial success in the interest of innovation and the potential for long-term gains. Someone the WSJ described as being “a former longtime Devices executive” said that when Alexa first started, Amazon’s gadgets team “didn’t have a profit timeline” when launching products.

Amazon is known to have sold Echo speakers for cheap or at a loss in the hopes of making money off Alexa later. In 2019, then-Amazon Devices SVP Dave Limp, who exited the company last year, told WSJ: “We don’t have to make money when we sell you the device.” WSJ noted that this strategy has applied to other unspecified Amazon devices, too.

People tend to use Alexa for free services, though, like checking the weather or the time, not making big purchases.

“We worried we’ve hired 10,000 people and we’ve built a smart timer,” an anonymous person that WSJ said is a “former senior employee” said.

An Amazon spokesperson told WSJ that more than half of people with an Echo have shopped with it but wouldn’t provide more specifics. Per “former employees on the Alexa shopping team” that WSJ spoke with, however, the amount of shopping revenue tied to Alexa is insignificant.

In an emailed statement, an Amazon spokesperson told Ars Technica, in part:

Within Devices & Services, we’re focused on the value we create when customers use our services, not just when they buy our devices. Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward.

Further hindering Alexa’s revenue are challenges in selling security and other services and the limitation of ad sales because they annoy Alexa users, WSJ reported.

Massive losses also didn’t seem to slow down product development. WSJ claimed the Devices business lost over $5 billion in 2018 yet still spent money developing the Astro consumer robot. That robot has yet to see general availability, while a business version is getting bricked just 10 months after release. Amazon Halo health trackers, which have also been bricked, and Luna game-streaming devices were also developed in 2019, when the hardware unit lost over $6 billion, per WSJ.

Amazon has laid off at least 19,000 workers since 2022, with the Devices division reportedly hit especially hard.

Alexa had “no profit timeline,” cost Amazon $25 billion in 4 years Read More »

google’s-$500m-effort-to-wreck-microsoft-eu-cloud-deal-failed,-report-says

Google’s $500M effort to wreck Microsoft EU cloud deal failed, report says

Amazon, Antitrust law, cloud infrastructure, cloud market, cloud service providers, European Union, Google, microsoft, Policy / /
Google’s $500M effort to wreck Microsoft EU cloud deal failed, report says

Google tried to derail a Microsoft antitrust settlement over anticompetitive software licensing in the European Union by offering a $500 million alternative deal to the group of cloud providers behind the EU complaint, Bloomberg reported.

According to Bloomberg, Google’s offer to the Cloud Infrastructure Services Providers in Europe (CISPE) required that the group maintain its EU antitrust complaint. It came “just days” before CISPE settled with Microsoft, and it was apparently not compelling enough to stop CISPE from inking a deal with the software giant that TechCrunch noted forced CISPE to accept several compromises.

Bloomberg uncovered Google’s attempted counteroffer after reviewing confidential documents and speaking to “people familiar with the matter.” Apparently, Google sought to sway CISPE with a package worth nearly $500 million for more than five years of software licenses and about $15 million in cash.

But CISPE did not take the bait, announcing last week that an agreement was reached with Microsoft, seemingly frustrating Google.

CISPE initially raised its complaint in 2022, alleging that Microsoft was “irreparably damaging the European cloud ecosystem and depriving European customers of choice in their cloud deployments” by spiking costs to run Microsoft’s software on rival cloud services. In February, CISPE said that “any remedies and resolution must apply across the sector and to be accessible to all cloud customers in Europe.” They also promised that “any agreements will be made public.”

But the settlement reached last week excluded major rivals, including Amazon, which is a CISPE member, and Google, which is not. And despite CISPE’s promise, the terms of the deal were not published, apart from a CISPE blog roughly outlining central features that it claimed resolved the group’s concerns over Microsoft’s allegedly anticompetitive behaviors.

What is clear is that CISPE agreed to drop their complaint by taking the deal, but no one knows exactly how much Microsoft paid in a “lump sum” to cover CISPE legal fees for three years, TechCrunch noted. However, “two people with direct knowledge of the matter” told Reuters that Microsoft offered about $22 million.

Google has been trying to catch up with Microsoft and Amazon in the cloud market and has recently begun gaining ground. Last year, Google’s cloud operation broke even for the first time, and the company earned a surprising $900 million in profits in the first quarter of 2024, which bested analysts’ projections by more than $200 million, Bloomberg reported. For Google, the global cloud market has become a key growth area, Bloomberg noted, as potential growth opportunities in search advertising slow. Seemingly increasing regulatory pressure on Microsoft while taking a chunk of its business in the EU was supposed to be one of Google’s next big moves.

A CISPE spokesperson, Ben Maynard, told Ars that its “members were presented with alternative options to accepting the Microsoft deal,” while not disclosing the terms of the other options. “However, the members voted by a significant majority to accept the Microsoft offer, which, in their view, presented the best opportunity for the European cloud sector,” Maynard told Ars.

Neither Microsoft nor Google has commented directly on the reported counteroffer. A Google spokesperson told Bloomberg that Google “has long supported the principles of fair software licensing and that the firm was having discussions about joining CISPE, to fight anticompetitive licensing practices.” A person familiar with the matter told Ars that Google did not necessarily make the counteroffer contingent on dropping the EU complaint, but had long been exploring joining CISPE and would only do so if CISPE upheld its mission to defend fair licensing deals. Microsoft reiterated a past statement from its president, Brad Smith, confirming that Microsoft was “pleased” to resolve CISPE’s antitrust complaint.

For CISPE, the resolution may not have been perfect, but it “will enable European cloud providers to offer Microsoft applications and services on their local cloud infrastructures, meeting the demand for sovereign cloud solutions.” In 2022, CISPE Secretary-General Francisco Mingorance told Ars that although CISPE had been clear that it intended to force Microsoft to make changes allowing all cloud rivals to compete, “a key reason behind filing the complaint was to support” two smaller cloud service providers, Aruba and OVH.

Google’s $500M effort to wreck Microsoft EU cloud deal failed, report says Read More »

dirty-diaper-resold-on-amazon-ruined-a-family-business,-report-says

Dirty diaper resold on Amazon ruined a family business, report says

Amazon, amazon returns, amazon reviews, amazon sellers, consumer harms, e-commerce, false advertising, Policy / /
Dirty diaper resold on Amazon ruined a family business, report says

A feces-encrusted swim diaper tanked a family business after Amazon re-sold it as new, Bloomberg reported, triggering a bad review that quickly turned a million-dollar mom-and-pop shop into a $600,000 pile of debt.

Paul and Rachelle Baron, owners of Beau & Belle Littles, told Bloomberg that Amazon is supposed to inspect returned items before reselling them. But the company failed to detect the poop stains before reselling a damaged item that triggered a one-star review in 2020 that the couple says doomed their business after more than 100 buyers flagged it as “helpful.”

“The diaper arrived used and was covered in poop stains,” the review said, urging readers to “see pics.”

Because others marked the review as helpful, Amazon increased its visibility on the product page, just as the Barons “were executing a plan to triple their annual sales to $3 million in 2020.” No matter how many 5-star reviews were left, this one bad review blaming the seller for the issue continued to “haunt” the family business, the Barons said.

“Nothing could have been more disgusting!!” the review continued. “I am assuming someone returned it after using it and the company simply did not check the item and then shipped it to us as if it was brand new.”

Amazon says that it prohibits negative reviews that violate community guidelines, including by focusing on seller, order, or shipping feedback rather than on the item’s quality. Other one-star reviews for the same product that the Barons seemingly accept as valid comment on quality, leaving feedback like the diaper fitting too tightly or leaking. But the bad review focused on the dirty item being resold as new likely should have been removed, Bloomberg reported, since it “suggests the item had already been used.” The review also seemingly violated community guidelines by focusing on “the company” not checking the item before shipping, blaming the seller for Amazon’s return inspection process.

But Amazon ultimately declined to remove the bad review, Paul Baron told Bloomberg. The buyer who left the review, a teacher named Erin Elizabeth Herbert, told Bloomberg that the Barons had reached out directly to explain what happened, but she forgot to update the review and still has not as of this writing.

“I always meant to go back and revise my review to reflect that, and life got busy and I never did,” Herbert told Bloomberg.

Her review remains online, serving as a warning for parents to avoid buying from the family business.

“These were not small stains either,” Herbert’s review said. “I was extremely grossed out. Thank god I saw the stains and didn’t put it on my baby! I will be returning this ASAP, and I sure hope they check it out when they get it back, but I wouldn’t be surprised if they just ship it to some other unsuspecting parent.”

The Barons told Ars they think the buyer hasn’t updated the review because she doesn’t understand how damaging it has been to their business.

Ars could not immediately reach Amazon for comment, but a spokesperson, Maria Boschetti, seemed to suggest to Bloomberg that there was little the Barons could do to correct the issue now.

“We are sorry to hear that a seller feels their return was not evaluated correctly and resulted in a negative review,” Boschetti told Bloomberg. “We encourage selling partners to reach out with any concerns, and we listen to their feedback to help us continue improving the selling experience.”

On Amazon’s site, other sellers have complained about the company’s failure to remove reviews that clearly violate community guidelines. In one case, an Amazon support specialist named Danika acknowledged that the use of profanity in a review, for example, “seems particularly cut and dry as a violation,” promising to escalate the complaint. However, Danika appeared to abandon the thread after that, with the user commenting that the review remained up after the escalation.

The Barons are now selling enough inventory through Beau & Belle Littles to pay down their debt, but they are struggling to make a living after becoming a prominent Amazon success story after launching their business a decade ago. The couple told Bloomberg that a “loan secured by their home” has complicated “the prospect of filing for bankruptcy,” and both have taken on other jobs to make ends meet since the review was posted.

The Barons told Ars they’ve given up on resolving the issue with Amazon after a support specialist appeared demoralized, admitting that “it’s completely” Amazon’s “fault” but there was nothing he could do.

“The last four years have been an emotional train wreck,” Paul Baron told Bloomberg. “Shoppers might think returning a poopy diaper to Amazon is a victimless way to get their money back, but we’re a small, family business, and this is how we pay our mortgage.”

Dirty diaper resold on Amazon ruined a family business, report says Read More »

users-must-prove-amazon-ripped-them-off-to-revive-buy-box-rigging-suit

Users must prove Amazon ripped them off to revive Buy Box rigging suit

Amazon, amazon buy box, amazon marketplace, amazon sellers, Antitrust law, consumer protection act, fulfilled by amazon, Policy / /

Better come with receipts —

Users want Amazon held accountable for hiding cheaper items with faster delivery.

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Users must prove Amazon ripped them off to revive Buy Box rigging suit

A court has dismissed a proposed class-action lawsuit alleging that Amazon’s Buy Box was rigged to rip off customers seeking the best deals on the platform.

The suit followed 2022 antitrust probes in the European Union and United Kingdom that found that Amazon’s Buy Box hid cheaper items with faster delivery times to preference Fulfilled By Amazon (FBA) sellers since at least 2016.

As a result, Amazon had to change its Buy Box practices and earn back the trust of customers and sellers, the company said in a 2022 blog. Among changes, Amazon agreed to treat all sellers equally when featuring offers in the Buy Box and to promote a second competing offer when a comparable deal is available at either a lower price or with a faster delivery time.

Those steps apparently didn’t satisfy users who sued: Jeffrey Taylor and Robert Selway. They asked courts to find a “reasonable inference of injury” since they were Amazon customers for years while the price rigging occurred. They claimed that “but for Amazon’s deceptive conduct concerning the Buy Box algorithm, Plaintiffs and members of the Class would have purchased the lower priced offers from non-FBA sellers with equivalent or better delivery.”

But this week, a US district judge in Seattle, Marsha Pechman, told users suing that it wasn’t enough to show evidence of Amazon’s proven misconduct. To satisfy a claim under Washington’s Consumer Protection Act (CPA), they needed to provide receipts from transactions showing that Amazon charged them higher prices while cheaper items were available. Instead, their complaint seemingly contradicted their claim, only showing one example of a Buy Box screenshot that Pechman said showed a hand soap that was offered by other sellers for prices significantly higher than Amazon’s featured offer.

“Plaintiffs have not adequately shown that they made any specific transaction with Amazon, let alone one from the Buy Box,” Pechman wrote in her order. And they “do not allege any specific purchases in which they were deceived via the Buy Box, let alone provide receipts.”

This doesn’t necessarily end the fight to hold Amazon accountable, though. The judge granted leave for users to amend their complaint and either provide “information regarding specific orders (i.e., receipts)” or “make allegations regarding discrete transactions with Amazon.”

Now, the Amazon users have 30 days to track down receipts or otherwise show evidence of specific transactions where they were injured, Pechman wrote.

“Without a showing of a specific transaction, Plaintiffs cannot possibly allege that they themselves were overcharged for any particular purchase—which is the injury in dispute,” Pechman wrote.

It will likely be challenging for the Amazon users to establish that they paid higher prices for items purchased on the platform years ago, and Pechman admitted this much in her order.

“The Court recognizes that Plaintiffs may be unable to ultimately prove that they overpaid for specific purchases,” Pechman wrote, but the CPA requires more than a “mere possibility of injury.”

Ars could not immediately reach plaintiffs’ lawyers for comment. Amazon declined to comment.

Users must prove Amazon ripped them off to revive Buy Box rigging suit Read More »

amazon-is-bricking-$2,350-astro-robots-10-months-after-release

Amazon is bricking $2,350 Astro robots 10 months after release

Amazon, Robots, Tech / /

RIP —

Amazon giving refunds for business bot, will focus on home version instead.

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Amazon Astro for business

Amazon

Amazon is bricking all Astro for Business robots on September 25. It first released the robot about eight months ago as a security device for small and medium-sized businesses (SMBs) for $2,350, but the device will soon be a pricey new addition to Amazon’s failed products list.

Amazon announced Astro in September 2021 as a home robot; that version of the device is still only available as a $1,600, invite-only preview.

In November, Amazon pivoted Astro to SMBs. But as first reported by GeekWire, Amazon on Wednesday sent emails to employees working on Astro for Business and customers telling them that the devices will stop working on September 25. At the time, Amazon’s email to customers said: “Your personal data will be deleted from the device. Any patrol or investigation videos recorded by Astro will still be available in your Ring app until your video storage time expires or your Ring Protect subscription ends.” According to The Verge, the email adds:

While we are proud of what we’ve built, we’ve made the decision to end support for Astro for Business to put our focus on making Astro the best robot for the home.

As of this week, Amazon will no longer charge users for subscriptions associated with Astro for Business, such as Astro Secure, which let the robot patrol businesses via customized routes, or Ring Protect Pro, which let Astro for Business owners store video history and sync the robot with Ring devices.

Amazon said it would refund customers $2,350 and give them a $300 Amazon credit. It also said it would refund unused, prepaid subscription fees.

Amazon has declined to share how many robots it sold, but it’s unfortunate to see such an expensive, complex piece of technology become obsolete after less than a year. Amazon hasn’t shared any ways to make further use of the devices, and spokesperson Courtney Ramirez told The Verge that Astro for Business can’t be used as a home robot instead. Amazon’s email to customers encourages owners to recycle Astro for Business through the Amazon Recycling Program, with Amazon covering associated costs.

Astro slow to take off

Amazon introduced Astro in late 2021, but as of 2024, it’s still not available to the general public. When Amazon released Astro for SMBs, it seemed like it might have found a new niche for the product. A May 2023 report from Business Insider claimed that Amazon opted to release Astro for Business over “an internal plan to release a lower-cost model” in 2022 for consumers.

Astro for Business could autonomously patrol spaces up to 5,000 square feet with an HD periscope and night vision, it could carry small devices, and, of course, was controllable by Amazon Alexa. Since its release, we’ve learned about Alexa’s dire financial straits and seen David Limp, who headed the Astro project as Amazon SVP of devices and services, exit Amazon, while his division has suffered notable layoffs (an Amazon rep told GeekWire that the shuttering of Astro for Business won’t result in layoffs as employees will start working on the home version of the robot instead).

Astro’s future

Per Amazon’s emails, the company is still keen to release the home version of Astro, which may surprise some since there has been no sign of an impending release since Amazon announced Astro years ago.

In May 2023, an Amazon representative told Insider that the firm had eyes on the potential of generative AI for Astro. It’s likely that Amazon is hoping to one day release Astro to consumers with the generative AI version of Alexa (which is expected this year with a subscription fee). In May 2023, Insider cited internal documents that it said discussed adding “intelligence and a conversational spoken interface” to Astro.

But considering that it has taken Amazon more than two and a half years (and counting) and reportedly the work of over 800 people to make Astro generally available, plus the sudden demise of the business version, there are reasons to be hesitant about paying the high price and any subscription fees for a consumer Astro—if it ever comes out. Early adopters could find themselves in similarly disappointing positions as the SMBs that bought into Astro for Business.

Astro’s development comes during a tumultuous time for Amazon’s devices business as it seeks to make Alexa a competitive and, critically, lucrative AI assistant. In June, Reuters reported that Amazon senior management had been telling employees that 2024 is a “must-win” for Alexa. Some analysts expect more reduced investment in Alexa if the paid tier doesn’t take off.

Amazon’s Astro home robot faces an uphill climb toward any potential release or consumer demand. Meanwhile, the version of it that actually made it to market is rolling toward a graveyard filled with other dead Amazon products—like Just Walk Out, Amazon Glow, Fire Phone, Dash buttons, and the Amazon Smart Oven.

Amazon is bricking $2,350 Astro robots 10 months after release Read More »

shopping-app-temu-is-“dangerous-malware,”-spying-on-your-texts,-lawsuit-claims

Shopping app Temu is “dangerous malware,” spying on your texts, lawsuit claims

Amazon, data privacy, deceptive trade, e-commerce, malware, online marketplace, Online Privacy, online shopping app, Policy, spyware, temu / /

“Cleverly hidden spyware” —

Temu “surprised” by the lawsuit, plans to “vigorously defend” itself.

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A person is holding a package from Temu.

Enlarge / A person is holding a package from Temu.

Temu—the Chinese shopping app that has rapidly grown so popular in the US that even Amazon is reportedly trying to copy it—is “dangerous malware” that’s secretly monetizing a broad swath of unauthorized user data, Arkansas Attorney General Tim Griffin alleged in a lawsuit filed Tuesday.

Griffin cited research and media reports exposing Temu’s allegedly nefarious design, which “purposely” allows Temu to “gain unrestricted access to a user’s phone operating system, including, but not limited to, a user’s camera, specific location, contacts, text messages, documents, and other applications.”

“Temu is designed to make this expansive access undetected, even by sophisticated users,” Griffin’s complaint said. “Once installed, Temu can recompile itself and change properties, including overriding the data privacy settings users believe they have in place.”

Griffin fears that Temu is capable of accessing virtually all data on a person’s phone, exposing both users and non-users to extreme privacy and security risks. It appears that anyone texting or emailing someone with the shopping app installed risks Temu accessing private data, Griffin’s suit claimed, which Temu then allegedly monetizes by selling it to third parties, “profiting at the direct expense” of users’ privacy rights.

“Compounding” risks is the possibility that Temu’s Chinese owners, PDD Holdings, are legally obligated to share data with the Chinese government, the lawsuit said, due to Chinese “laws that mandate secret cooperation with China’s intelligence apparatus regardless of any data protection guarantees existing in the United States.”

Griffin’s suit cited an extensive forensic investigation into Temu by Grizzly Research—which analyzes publicly traded companies to inform investors—last September. In their report, Grizzly Research alleged that PDD Holdings is a “fraudulent company” and that “Temu is cleverly hidden spyware that poses an urgent security threat to United States national interests.”

As Griffin sees it, Temu baits users with misleading promises of discounted, quality goods, angling to get access to as much user data as possible by adding addictive features that keep users logged in, like spinning a wheel for deals. Meanwhile hundreds of complaints to the Better Business Bureau showed that Temu’s goods are actually low-quality, Griffin alleged, apparently supporting his claim that Temu’s end goal isn’t to be the world’s biggest shopping platform but to steal data.

Investigators agreed, the lawsuit said, concluding “we strongly suspect that Temu is already, or intends to, illegally sell stolen data from Western country customers to sustain a business model that is otherwise doomed for failure.”

Seeking an injunction to stop Temu from allegedly spying on users, Griffin is hoping a jury will find that Temu’s alleged practices violated the Arkansas Deceptive Trade Practices Act (ADTPA) and the Arkansas Personal Information Protection Act. If Temu loses, it could be on the hook for $10,000 per violation of the ADTPA and ordered to disgorge profits from data sales and deceptive sales on the app.

Temu “surprised” by lawsuit

The company that owns Temu, PDD Holdings, was founded in 2015 by a former Google employee, Colin Huang. It was originally based in China, but after security concerns were raised, the company relocated its “principal executive offices” to Ireland, Griffin’s complaint said. This, Griffin suggested, was intended to distance the company from debate over national security risks posed by China, but because the majority of its business operations remain in China, risks allegedly remain.

PDD Holdings’ relocation came amid heightened scrutiny of Pinduoduo, the Chinese app on which Temu’s shopping platform is based. Last year, Pinduoduo came under fire for privacy and security risks that got the app suspended from Google Play as suspected malware. Experts said Pinduoduo took security and privacy risks “to the next level,” the lawsuit said. And “around the same time,” Apple’s App Store also flagged Temu’s data privacy terms as misleading, further heightening scrutiny of two of PDD Holdings’ biggest apps, the complaint noted.

Researchers found that Pinduoduo “was programmed to bypass users’ cell phone security in order to monitor activities on other apps, check notifications, read private messages, and change settings,” the lawsuit said. “It also could spy on competitors by tracking activity on other shopping apps and getting information from them,” as well as “run in the background and prevent itself from being uninstalled.” The motivation behind the malicious design was apparently “to boost sales.”

According to Griffin, the same concerns that got Pinduoduo suspended last year remain today for Temu users, but the App Store and Google Play have allegedly failed to take action to prevent unauthorized access to user data. Within a year of Temu’s launch, the “same software engineers and product managers who developed Pinduoduo” allegedly “were transitioned to working on the Temu app.”

Google and Apple did not immediately respond to Ars’ request for comment.

A Temu spokesperson provided a statement to Ars, discrediting Grizzly Research’s investigation and confirming that the company was “surprised and disappointed by the Arkansas Attorney General’s Office for filing the lawsuit without any independent fact-finding.”

“The allegations in the lawsuit are based on misinformation circulated online, primarily from a short-seller, and are totally unfounded,” Temu’s spokesperson said. “We categorically deny the allegations and will vigorously defend ourselves.”

While Temu plans to defend against claims, the company also seems to potentially be open to making changes based on criticism lobbed in Griffin’s complaint.

“We understand that as a new company with an innovative supply chain model, some may misunderstand us at first glance and not welcome us,” Temu’s spokesperson said. “We are committed to the long-term and believe that scrutiny will ultimately benefit our development. We are confident that our actions and contributions to the community will speak for themselves over time.”

Shopping app Temu is “dangerous malware,” spying on your texts, lawsuit claims Read More »