Recently, the European Union filed an antitrust lawsuit against Amazon. The premise is that Amazon’s ubiquity gives it an unfair advantage in selling their own products. Amazon is of course most famously known for selling everyone else’s stuff. Tons of retailers and manufacturers use Amazon as both a storefront and distribution network. You can even get products from Sam’s Club on Amazon. That isn’t the main issue in the lawsuit though. What the EU is alleging is that Amazon’s vast network and data gathering capabilities give it an advantage in that they use all that data to better refine their own products and then market and distribute them. The fear of course is that no one could possibly compete with the way that Amazon operates.
There are a couple problems with this lawsuit. One, Amazon doesn’t actually make that many branded products. It’s a smattering of smart devices like their tablets, streaming sticks, and the Alexa devices. That’s about it. It’s also worth pointing out that despite the marketing and distribution advantages, the Fire Phone was hardly a raging success. In all honesty, this case could be better made against Walmart that has a whole like of products of many kinds that it distributes through its massive network of brick and mortar stores and online shopping.
Finally, this is just Amazon being smart with the data that they can gather. Why wouldn’t you pay attention to what sells, what features are most important, and what price points people buy at when you are designing your own products? It’s as if you were building a house and someone gave you a free blueprint for exactly what you were looking for, but instead you threw it away and figured it out from scratch. See how that doesn’t make any sense?
Amazon’s success isn’t really a matter of forcing competition out but looking at the way things are going and getting there first. In the early days of the internet, they saw the potential in selling small items like books. Suddenly, bibliophiles didn’t need to spend years combing used book stores for a particular work, they could just look it up and order it. And anyone could do it, used bookstores, major publishers, or even just the soccer mom with a few old books to unload.
As capabilities increased, they branched out, streaming music, movies, and of course selling ebooks and their own e-readers, practically speaking the tablet market into existence. And let’s not forget that they developed partnerships with hordes of retailers around the world allowing them to sell nearly anything under sun.
This has actually been the case on the distribution side of Amazon as well. In truth, that is the real secret of Amazon’s success, its ability to get almost anything almost anywhere in the world in just a couple of days. Sometimes, they can even get things delivered in a matter of hours. They realized that people would be willing to wait a little bit if they didn’t have to deal with going to a store, especially if they knew they were getting what they wanted, instead of just hoping to find it. Just like with internet streaming, they gradually increased their capabilities and now Amazon trucks are all over the streets of America, dropping off packages by the millions. Naturally, things haven’t stopped there. Noticing the rise in the gig economy (only natural since they helped bring it about) there is now Amazon Flex, which allows anyone to pick up and deliver packages under the Amazon banner and make a little side money. The next step of course is for Amazon to start using drones to deliver packages. That project has been underway for years already and as soon as they can get FAA approval, you can expect to see Amazon drones buzzing around the skies.
How does all of this relate to TARTLE? Like Amazon, we are a marketplace, with you the individual as the retailer. We see the trends towards accessibility in terms of ownership, the desire for greater personal control of data and the growth of cryptocurrency and are eagerly adopting them. Even better, we want to take you along on journey, to get out ahead of the trend and lead the way into a future where everyone has more direct control over what goes on in their lives.
What’s your data worth? Sign up and join the TARTLE Marketplace with this link here.
That isn’t the main issue in the lawsuit though. What the EU is alleging is that Amazon’s vast network and data gathering capabilities give it an advantage in that they use all that data to better refine their own products and then market and distribute them. The fear of course is that no one could possibly compete with the way that Amazon operates.
Speaker 1 (00:07):
Welcome to TARTLE Cast with your hosts, Alexander McCaig and Jason Rigby, where humanities steps into the future and source data defines the path.
Alexander McCaig (00:26):
Hey, hey. Welcome back to TARTLE Cast. We're going to open it up with some more current events with what's going on with the data. We got a new set up here in the studio. Vibe a little bit more. It'll be easier on us with our production with the-
Jason Rigby (00:37):
Yeah. This is TARTLE land.
Alexander McCaig (00:37):
Yeah. This is TARTLE land. It's got a better vibe. The giant blue screen we had was a little wild.
Jason Rigby (00:43):
Yeah, it was. We could go anywhere in the world. That was the nice part with the blue screen.
Alexander McCaig (00:46):
We just fly around.
Jason Rigby (00:47):
Yes, exactly. That's fun.
Alexander McCaig (00:48):
We get to literally fly around with it.
Jason Rigby (00:54):
(singing) Remember that song?
Alexander McCaig (00:55):
Jason Rigby (00:55):
That's from the '90s.
Alexander McCaig (00:57):
What song? Who is that?
Jason Rigby (00:58):
It was Beck.
Alexander McCaig (01:01):
Jason Rigby (01:01):
Yeah. It was from like in the '90s. It's I'm a loser baby. So I don't you kill me.
Alexander McCaig (01:06):
Oh yeah. I know them. They were like competing Nirvana.
Jason Rigby (01:10):
Yeah. It was kind of like that. So first one, are you ready?
Alexander McCaig (01:14):
Yeah, of course, I'm ready.
Jason Rigby (01:15):
EU filed the antitrust charges against Amazon over use of data.
Alexander McCaig (01:22):
This was an interesting article and one of the major points is that they are a retailer themselves and a marketplace. In the eyes of the European union, they think that this is somewhat of a very strategic advantage that they have over other retailers. Not the fact that it's a marketplace, but they have the ability to sell more of their own product, their own self-branded product because they have the highest availability of data to know exactly what people want.
Alexander McCaig (01:53):
So even as an individual, like you yourself goes on Amazon Prime and you go to purchase any sort of object, that's maybe not an Amazon product. They're going to know characteristically what's going on in the product, why you're purchasing it, how you reviewed it.
Alexander McCaig (02:07):
So they can actually aggregate all that data because they have other retailers on their marketplace. And then they can fine tune their own products.
Jason Rigby (02:14):
Yeah. I bought something... Speaking of that... I don't mean to interrupt you, but-
Alexander McCaig (02:17):
You can interrupt.
Jason Rigby (02:18):
But I bought something and it came in today and it was from Sam's Club, but it was purchased through Amazon.
Alexander McCaig (02:24):
Yeah, that's interesting. So they think that there's a little bit too much of a competitive advantage, but I think it's actually the most natural hybrid. I don't blame them from doing a model like that. They're just being smart with the data. And the reason retailers come to join Amazon is because they have a much better ability to get their product in front of other people's eyes more than any one-off retailer could do.
Alexander McCaig (02:48):
The EU should file an antitrust lawsuit against Walmart then. Walmart is in the same thing. Even with their big block stores, Walmart is so data heavy, right? So even if you're buying and all this other stuff from other retailers and you want to push it through Walmart, it's the same sort of function, right? I think they are taking a very forward-looking approach at what the future is going to actually be like for this marketplace.
Alexander McCaig (03:14):
It's no longer traditional brick and mortar. It's no longer traditional online sales. Things are becoming very hybrid. And so the availability of that data in these hybrid models, governments are trying to catch up. But the only way that they can catch up is by trying to slow the businesses down by filing injunctions or lawsuits against them.
Jason Rigby (03:29):
Yeah. And I liked what they said. It said to leverage its dominance. So there was a normal risk of competition to leverage its dominance.
Alexander McCaig (03:37):
Because we all know Amazon is already dominant.
Jason Rigby (03:40):
Alexander McCaig (03:40):
Right? It's not the fact that they're a marketplace and retailer, but it's the fact that they've locked down their logistics and supply chain better than anyone else. Everyone seems to think, "Oh, they've got a great website." No, it's the fact that they can get something on your doorstep day of, a couple hours or two days just about anywhere. That's the real sauce of it.
Alexander McCaig (04:00):
So filing an injunction or a lawsuit against them because they strategically do a better job of managing data and also onboarding retailers that otherwise wouldn't have an opportunity, I don't think that's really the proper way to go about that.
Jason Rigby (04:13):
When you look at Europe and the way that they're going after these companies with data.
Alexander McCaig (04:19):
You got to remember, Europe is an old social model.
Jason Rigby (04:22):
Alexander McCaig (04:23):
So they want that social model of balance. You hear that ringing? What is that? Hold up, everybody.
Jason Rigby (04:28):
I think it's your phone.
Alexander McCaig (04:30):
Put that out, dude.
Jason Rigby (04:35):
Alex is getting a phone call. It's the European Union. He had a meeting with them and now he's talking about them. Do not ring.
Alexander McCaig (04:47):
Yeah. I just close down our video for a second. I'll have to cut that. Yeah. So that's kind of the point. It's that old social model and they're trying to apply their cultural aspects to the very quickly changing e-commerce environment.
Jason Rigby (05:04):
But they're looking at it as like a dual role like with the marketplace and retailer. So that's kind of flawed because like you said, it's a hybrid model now. You can't say there's a brick and mortar store, and then there's an online store. It's all going to be one.
Alexander McCaig (05:21):
No. It's all going to be one. The only difference is they did something digital. If you go to Marrakesh in Morocco, they have this souks. Just like 50,000 stores in these souks. But it's a marketplace. No one person owns the marketplace. It's just a general area. The thing is, they're trying to apply a physical in-person model to a system that works digitally where the ownership and the, frankly, the real estate laws are much different than how traditional marketplaces really work. TARTLE is a marketplace.
Jason Rigby (05:51):
Alexander McCaig (05:51):
Right? And yeah, of course we have data on what's going on. I mean, we built the marketplace. And if individual is coming in to sell their information, they are that retailer. So we understand how they're using the system. We don't know if their data is. We'd have to buy it from them, but we at least understand the analytically how they're using our system because we don't have to do that for security, legally, everything that happens to go with it.
Alexander McCaig (06:12):
That's what happens when you run an online business. Like I said, if you're in Marrakech, no one person owns that whole area with all that real estate, but all these different retailers come in to make it that marketplace.
Jason Rigby (06:23):
Alexander McCaig (06:24):
But it doesn't give the marketplace strategic advantage. It's just because that's that brick-and-mortar old school model. So yeah, you could apply that from that standpoint, but they're not like really cornering the market with an unfair advantage, right to leverage their dominance they already have. They're dominant because they created a hybrid model that works really well.
Jason Rigby (06:40):
Well, I think Alibaba is the same thing in China. I mean, it's the same exact as Amazon.
Alexander McCaig (06:44):
Yeah, right. So I think like any antitrust thing that's going on, they're trying to stop whatever sort of monopoly is happening, right?
Jason Rigby (06:53):
Alexander McCaig (06:54):
They want to divide the wealth and that's pretty much the socialist profile that you find in Europe. So if you're playing in their ballpark. That's probably what you're going to get.
Jason Rigby (07:02):
Yeah. Whenever you look at... Because I want to get into this a little bit more. Whenever you look at companies like Amazon are these data-driven companies that are just taking mass amounts of data and then executing on it. What do you see when the consumers... Obviously, Amazon hugely successful stock prices through the roof. Whenever you look at... Because I believe the future even more so to COVID. I mean, we're purchasing way more than we've ever done online. And the fast and convenient, fast and convenient. Everyone wants comfort and no restriction on anything.
Alexander McCaig (07:39):
Jason Rigby (07:39):
I want to be able to do this now, now, now. I'm thinking about this click, place order, one bid, boom, done. What do you think for the future of like the Amazons?
Alexander McCaig (07:50):
So if we're looking at the futures of Amazons and they've understood something very well, they're actually changing with culture and they're actually pushing in the direction that they want it to go that's most beneficial for them. Jump back 30, 40 years, right? It was more of like an event to go out and go shopping. If you go back even further than that, if you go over to the early retail days in London, right? There's a place called suffragettes. And suffragettes kind of design the model for putting makeup and perfume on the first level for people to come in and actively try clothing on, try perfume, try the makeup. Before you can go and you can't touch anything. Right? That's where there was a lot of window shopping. They want people to try on the clothes. See if you had the money or you didn't.
Alexander McCaig (08:34):
But at suffragettes, the owner at the time realized that there was a change that was occurring. And he understood that by pushing that sort of cultural change, like it's not just the wealthy elite that want to shop, everybody wants to shop now. So as the availability increased, their model had to change. So now everyone's coming in. And they become the major retailers competing as Harrods, which was like the go-to store at the time.
Alexander McCaig (08:54):
So if we take what's culturally going on with Amazon and where that's going to evolve into the future, they've just seen that people want the demand right now in that our logistical supply chains can handle it to the maximum extent that we receive things in our instantaneous gratification. If they continue at that model and push it, things are just going to become more instantaneous, and the only way we can do that is by personalizing your drop-off.
Alexander McCaig (09:16):
You'd have to skip the mail service altogether. So for the future of them is actually going to be cutting out the logistics of relying on government entity, UPS, or FedEx, right?
Jason Rigby (09:28):
Alexander McCaig (09:28):
And that's going to decrease their costs and they can push that into robotics, which is the obvious thing for them. And that's why you're going to see them pushing into those drones where Amazon can just build a facility and throw things out of the facility. As long as they get their FAA clearance for flying drones, they're good to go.
Jason Rigby (09:42):
But it's funny even because we say convenience and instant gratification, but even for myself, so I don't have to go to the store, I'll wait the two days for it to come in.
Alexander McCaig (09:51):
Yeah, and then there's almost a psychological change for us, right? So we start to analyze ourselves in our own data and how we do our own purchasing. We realize I really don't need it right now, but I'm willing to do that two-day wait, so that I don't have to go through the labor effort of actually having to go to the store and deal with it, find a parking spot, deal with wearing a mask, if that's an issue with you at the time. All of that data that they're beginning to look at and you can see those changes. And that's why they've had such a major growth.
Alexander McCaig (10:19):
For instance as populations continue to increase or if they decrease and mom-and -pop start to drop off, nobody appreciates the brick and mortar, the value of what they're doing and their data is only going to become... Or of a driving force for them to enhance their hybrid model or to leverage what they already have, which is such an advantage.
Jason Rigby (10:39):
I know eBay is a marketplace as you were talking just as Amazon.
Alexander McCaig (10:43):
Well, then why doesn't the EU just dump it on eBay.
Jason Rigby (10:45):
Alexander McCaig (10:46):
You want to know why? Because eBay is not really a target. They don't pull in that much revenue.
Jason Rigby (10:49):
Alexander McCaig (10:50):
That's the whole gist of it, right? Going to Europe, there's mom-and-pop shops everywhere. That is Europe. You've got the old cobblestone roads, right? Tiny stores with doorways you can barely walk through. We'll me, for instance, I'm 6'5". And those people don't have any data. It's just like, "We're selling an old product. You gave me the Euro, here's your thing."
Jason Rigby (11:10):
Alexander McCaig (11:10):
You know what I mean?
Jason Rigby (11:11):
Alexander McCaig (11:11):
A lot of them are antique stores.
Jason Rigby (11:13):
Right. But I guarantee you... I wonder how many of them are on eBay though?
Alexander McCaig (11:18):
They do go to eBay, right?
Jason Rigby (11:19):
Alexander McCaig (11:19):
Because that's their outlet as a mom-and-pop to get on.
Jason Rigby (11:22):
Alexander McCaig (11:23):
Now, you actually have to be a more significant mom-and-pop to actually go through the fulfillment process to become a part of Amazon.
Jason Rigby (11:31):
Alexander McCaig (11:32):
And then you have to realize, do I have the cashflow or a product that people actually want to put it in there? Is it worth my while to actually even go to Amazon?
Jason Rigby (11:39):
Right. Or am I selling onesy, twosies in the afternoon?
Alexander McCaig (11:41):
Right. The thing is they don't know that.
Jason Rigby (11:43):
Alexander McCaig (11:44):
Right? Because their local market is too small, but Amazon knows it. And they also have a global market to test against those products.
Jason Rigby (11:51):
Alexander McCaig (11:51):
So your best bet as mom-and-pop is to see if your product at all has any viability on Amazon. And if it does, if it's something people want, list it.
Jason Rigby (12:00):
Alexander McCaig (12:00):
You need to do your data research just as much as Amazon does.
Jason Rigby (12:03):
Yes. I think that's where, when you look at companies, you get these C-level people that are 55, 60 years old and they feel like, "I later in my life, I don't need to know any digital." It's like literally 50 hours of study and you can understand and know it.
Alexander McCaig (12:22):
And honestly, that's what you should do because the second you stop studying, you begin to stagnate. You stagnate and you fall behind. When things stagnate, they get mold on it, right? Bacteria starts to grow.
Jason Rigby (12:32):
Well, these 55-year-old have molds on them. You're young. I'm up there, coming up there. So that will be-
Alexander McCaig (12:40):
The brain needs to be worked, right?
Jason Rigby (12:41):
Yeah. It has to be. And to think that you're being ignorant, not to think that you don't need to understand the digital marketplace.
Alexander McCaig (12:50):
Yeah. There is great pace at which technology seemingly develops perspectively. And if you don't choose to develop with that technology or at least recognize that our culture and society as a whole are evolving with that technology at the same rate and you are quickly going to fall behind. And that's not technology to blame, that's you to blame. Life has continual learning, right? Amazon does continual learning with their machine models on their data. That is what the future looks like is that continual learning. Those continual regressions of going back in that data and trying to understand what's the next best thing I should be doing.
Jason Rigby (13:27):
I feel like Amazon is at the very least, probably one of the... I mean, just Amazon Prime and then allowing you to get an emotional connection with their TV shows and understanding that you're on their app. And then you have Alexa in the home and you can speak. Eventually it's going to know... Alexa is going to... She's at like a third or fourth grade education right now?
Alexander McCaig (13:49):
Jason Rigby (13:49):
When she's able to understand and know speaking to all the other IoT devices, you're going to say, "Order my pizza," and it will know exactly where you want it from.
Alexander McCaig (13:58):
Yeah. It reads the tone of the voice and knows who the person is.
Jason Rigby (14:00):
Yeah. It'll be doing all that. So I think Amazon more than any company, I feel has a leg up.
Alexander McCaig (14:06):
Well, they know that when... And I said this in a previous episode, transcription. Audio transcription and machine learning is the future where we talk and everything is transcribed, analyzed, and then some output is produced with it. It's not going to be a manual input.
Jason Rigby (14:24):
Alexander McCaig (14:24):
This is something we're naturally good at doing. So the adoption of technology has to adopt the number one thing we're good at doing. We're not good at typing. Typing is naturally inefficient. The keyboard was designed to be inefficient because they needed to slow it down because earlier typewriters, people were typing so fast that they would get caught, that little sticks that tap on the paper. I know they got a name.
Jason Rigby (14:43):
Alexander McCaig (14:44):
So they actually had to rework it as we get to QWERTY, right?
Jason Rigby (14:46):
Alexander McCaig (14:47):
It's the most inefficient keyboard. There's been other efficient ones. I forget where I'm going with that.
Jason Rigby (14:52):
No, but I mean, you were like speaking with our voice.
Alexander McCaig (14:54):
Yeah, speaking. Speaking with our voice.
Jason Rigby (14:55):
And Amazon understanding.
Alexander McCaig (14:56):
Amazon understands that. They know very well that that's the future. And that's the jump that we need to take and that's very valuable data for them. And that will continue to give them that competitive advantage no matter how many lawsuits you throw at them.
Jason Rigby (15:09):
Imagine how much data once voice becomes? How much data megabytes we'll be producing?
Alexander McCaig (15:14):
Well, consider us. We're talking constantly. Every conversation we make, it's constant transcription, right?
Jason Rigby (15:20):
Alexander McCaig (15:21):
But we just have to go through the laborious process of putting out there. So our listeners can listen to us to educate them. So that's what our future is going to look like. That's going to be the major shift.
Jason Rigby (15:29):
I love that. So Amazon, nine?
Alexander McCaig (15:33):
Yeah. Keep doing what you're doing.
Jason Rigby (15:34):
Alexander McCaig (15:34):
Do what you do and you'll have a competitor. And always know that you'll be burdened by logistics because you're selling a physical product. As simple as that.
Jason Rigby (15:42):
Alexander McCaig (15:52):
Speaker 1 (15:54):
Thank you for listening to TARTLE Cast with your hosts, Alexander McCaig and Jason Rigby, where humanity steps into the future and source data defines the path. What's your data worth?