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Amazon is taking steps to increase its control over third-party sellers on its platform, most recently by obtaining a patent for a new form of blockchain ledgering technology.
With a spate of stories about dangerous pandemic warehouse working conditions and new revelations of how it fires workplace organizers, Amazon is trying to put on its best public face. Last week, it announced that it would stop selling facial recognition software to police forces across the country—for a year.
That pledge may have been put out to distract from a potentially much bigger story hidden in a remarkable patent that has been recently granted to the company. The patent, for a form of blockchain ledgering technology, will allow Amazon to oversee the collection of an unprecedented amount of data about the business operations of its sellers, including their entire supply chain. In essence, the patent fulfills Amazon’s plans to create a private regulatory regime, where it uses proprietary information to create a “certification” bureaucracy: a private, for-profit alternative to the Food and Drug Administration, the Environmental Protection Agency, and the Federal Trade Commission. Unlike governmental agencies, however, it will have no public oversight, and can use its certifying power to squeeze sellers and consolidate control.
Brands and companies that use Amazon’s technology would have to list the manufacturers, couriers, and distributors they use. Those entities will have to corroborate that they indeed sell to the brand. Amazon will know where and when every single sweater, earplug, and frying pan sold on its platform was made, and by whom. The patent states: To certify an item, a verifiable record for the item indicating, for example, what materials were used to make the item, where the item was made, who made the item, when the item was made, and so forth, is needed.
The patent fulfills Amazon’s plans to create a private regulatory regime, where it uses proprietary information to create a “certification” bureaucracy.
The seemingly benign patent, which covers a “Distributed Ledger Certification” system, provides a glimpse into a dystopian future in which Amazon is the all-seeing colossus of commerce. This is dangerous because it takes an already abusive monopolist and gives it the powers of private government.
According to the patent, the program would be for all intents and purposes mandatory if you want to sell anything on Amazon.com. Amazon states that it would use algorithms to prioritize the visibility of “trusted” goods and merchants that participate in the program. If the current experience of brands and sellers who are effectively forced to participate in various Amazon programs serves as any indication, the choice to opt out would be illusory: Brands and sellers that are deprioritized by Amazon’s results list won’t survive. Therefore, Amazon would be able to spy into every nook and corner of the industries of every merchant that sells through its platform, equivalent to a significant chunk of our economy. As the patent indicates, the information will be extremely granular, down to which raw materials are used in the manufacturing process.
Amazon, which already exercises outsized judicial power over its sellers, will get to set standards that decide what goods are nontoxic, eco-friendly, organic, authentic, or sustainable. The negative implications of this power usurpation are readily apparent: The Seattle behemoth will get to decide which factories and suppliers meet their criteria and which manufacturing standards to endorse, effectively choosing winners and losers across the entire supply chain. One can only imagine the lobbying efforts brands will have to engage in in order to curry favor with Amazon’s future certification team.
Amazon will clearly promote this new patent system as a chance for people to become better, more ethical consumers. “We’ll do the certifying,” they will promise, so customers can buy green, buy safe, or buy fair labor. People want to shop organic and shop green, and therefore want to know whether there are labor violations in a supply chain. Indeed, the patent begins: “Trust is earned. Once trust is lost, it can often be difficult to regain.”
But think of who will be doing the certifying: Amazon, recently seen retaliating against workers like Chris Smalls who demanded better safety. Should that be the company telling us who can be “trusted” on worker treatment? Or what is organic? What if they change their standards? Who will oversee them?
In a statement to the Prospect, an Amazon spokesperson said: “Like many companies, we file a number of forward-looking patent applications that explore the full possibilities of new technology. Patents take multiple years to receive and do not necessarily reflect current developments to products and services.” The spokesperson described attempts to understand the potential use of its patents as “speculative.”
While the patent looks like a form of market technology, it may be better understood as a form of political technology.
Amazon, which was recently caught red-handed using data from its sellers to improve its own brands, will be in an even better position to compete unfairly with the brands that use its platform by simply creating its own version of the products using the proprietary supply chain information provided by the brands regarding manufacturing. Just knowing a third-party seller’s manufacturing plant could lead Amazon to approaching the manufacturer with a better deal to sell to Amazon directly.
While the patent looks like a form of market technology, it may be better understood as a form of political technology, allowing Amazon to build up its panopticon. The technology could assist Amazon in manipulating prices, punishing dissidents, and controlling the economy with a network of informers that is reminiscent of totalitarian regimes.
Amazon, already supervising and organizing our economy by rewarding and punishing manufacturers, suppliers, and partners, will gain new powers with this patent to discipline and quash sellers. The company will be able to peer into seller data but take no responsibility, treating sellers much like Uber treats drivers, sucking money and value out of the system, and increasing inequality.
The “distributed ledger” that Amazon describes in the patent is actually not about decentralized power, but radical concentration—giving all the more reason we need to investigate all of Amazon’s practices, break it up, and regulate it like a monopoly.
