AMAZON CONTROVERSIES & CRITICISMS
Amazon has faced tremendous backlash from multiple sources over the years. Amazon is also being blamed for causing the tech giant the Amazon effect — the evolution and disruption of the retail market due to the company’s exposure to monopolistic practices.
The following are some of the concerns and allegations that Amazon has faced over time.
- Monopoly and anti-competitive behavior. Because of Amazon’s size and economies of scale, it is pushing out local and small vendors and is accused of shifting an open market from a privately controlled market. This is leading to the slow death of the brick-and-mortar store model built by companies like Sears and JCPenney.
- Unfair treatment of workers. Amazon is often under the microscope for providing unfair working conditions in its warehouses, including treating workers like robots, providing low wages, and creating unsafe working conditions.
- Huge carbon footprint. Over the past two decades, the Amazon has been accused by environmental activists of having a staggering carbon footprint. The transportation of any merchandise relies on oil, and since Amazon delivers anything everywhere, it leaves a lasting carbon footprint that automatically falls on its shoulders.
- E-waste. A recent investigation conducted by British television network ITV uncovered how Amazon is contributing to the world’s e-waste crisis by destroying millions of unused or returned products. This also includes millions of electronics, such as phones, computers, and TVs that are toxic to the soil, water, air, and wildlife.
- Counterfeit product listings. Amazon has been under scrutiny by brands, shoppers, and lawmakers as counterfeiters have been listing & selling fake products on Amazon through its third-party marketplace. To crack down on counterfeit products on its site, Amazon destroyed Two million counterfeit products sent to its warehouses and blocked Ten billion fake listings in 2021.
- Avoiding taxation. Edging fast toward a monopoly status, Amazon has been criticized for often avoiding tax payments despite making huge profits. According to a report by the Institute on Taxation and Economic Policy, the company avoided around $5.2 billion in corporate federal income taxes in 2021.
AMAZON FINANCES
According to a news release posted on Amazon’s investor relations website, Amazon experienced a significant increase in net sales but a decrease in operating income in the first quarter of 2022.
Following are some notable statistics from the release;
- Net sales increased 7% to $116.4 billion in the first quarter, compared to $108.5 billion in the first quarter of 2021. Excluding the $1.8 billion unfavorable impact of year-over-year changes in foreign exchange rates for the full quarter, net sales increased 9%. Compared to the first quarter of 2021.
- Operating income decreased to $3.7 billion in the first quarter, compared with $8.9 billion in the first quarter of 2021.
- Net loss was $3.8 billion in the first quarter compared with a net income of $8.1 billion in the first quarter of 2021.