Tag Archives: Amazon

PopSockets CEO calls out Amazon’s ‘bullying with a smile’ tactics

Amazon has a “bullying” problem.

So insisted PopSockets CEO and inventor David Barnett today while describing his company’s relationship with the e-commerce and logistics giant. Barnett was addressing members of the House Subcommittee on Antitrust, Commercial, and Administrative Law and, over the course of the hearing, laid out how the Jeff Bezos-helmed corporate behemoth had pressured his smartphone accessory company in a manner best described as incredibly shady.

Barnett was joined by executives from Sonos, Basecamp, and Tile, who all took turns airing a list of grievances against major tech players such as Amazon, Apple, Facebook and Google. They all recounted, in manners specific to their respective companies, how the major tech players have used their market dominance to squeeze smaller competitors in allegedly anticompetitive ways.

The CEO of PopSockets, however, appeared to have a personal beef with Jeff Bezos (which he pronounced “Bey-zoo”).

“Multiple times we discovered that Amazon itself had sourced counterfeit product and was selling it alongside our own product,” he noted.

Barnett, under oath, told the gathered members of the House that Amazon initially played nice only to drop the hammer when it believed no one was watching. After agreeing to a written contract stipulating a price at which PopSockets would be sold on Amazon, the e-commerce giant would then allegedly unilaterally lower the price and demand that PopSockets make up the difference.

Colorado Congressman Ed Perlmutter asked Barnett how Amazon could “ignore the contract that [PopSockets] entered into and just say, ‘Sorry, that was our contract, but you got to lower your price.'”

Barnett didn’t mince words.

“With coercive tactics, basically,” he replied. “And these are tactics that are mainly executed by phone. It’s one of the strangest relationships I’ve ever had with a retailer.”

Barnett emphasized that, on paper, the contract “appears to be negotiated in good faith.”

However, he claimed, this is followed by “… frequent phone calls. And on the phone calls we get what I might call bullying with a smile. Very friendly people that we deal with who say, ‘By the way, we dropped the price of X product last week. We need you to pay for it.'”

Barnett said he would push back and that’s when “the threats come.”

PopSockets CEO calls out Amazon’s ‘bullying with a smile’ tactics

Amazon is a den of thieves

Amazon, Den of Thieves, Part eleventy billion

Amazon’s third-party marketplace is chock-full of independent sellers hawking everything from Korean face masks to out-of-print books and moon boots. From a business perspective, the system works great for the e-commerce giant: Amazon gets to sit back and collect fees from those sellers, whose sales on the platform continue to grow. In 2017, for the first time, more than half the products sold on Amazon came from those marketplace listings, rather than from Amazon itself.

But it’s also causing at least one major headache for Amazon. Some third-party sellers have been using the reach of Amazon’s marketplace as an opportunity to sell counterfeit and pirated items. The pressure on the company has been growing as brands such as Birkenstock and Mercedes Benz have lambasted it for not being able to control the problem. Now, CNBC reports, Amazon for the first time has acknowledged sales of counterfeits and pirated items as a risk in its annual earnings report to investors and the US securities and exchange commission.

Under the section of “risk factors” to the business, Amazon says it “could be liable” for the activities of its sellers, and explains:

Amazon has finally admitted to investors that it has a counterfeit problem,” Quartz, February 5, 2019

Sheesh.