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Criticism of Amazon

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Criticism of Amazon

Amazon has been criticized on many issues, including anti-competitive business practices, its treatment of workers, offering counterfeit or plagiarized products, objectionable content of its books, and its tax and subsidy deals with governments.

The company has been criticized for its alleged use of patents as a competitive hindrance; its "1-Click patent" may be the best-known example. Amazon's use of the 1-click patent against competitor Barnes & Noble's website led the Free Software Foundation to announce a boycott of Amazon in December 1999, which ended in September 2002. On February 22, 2000, the company patented an Internet-based customer referral system known as an affiliate program. Industry leaders Tim O'Reilly and Charlie Jackson spoke out against the patents and O'Reilly published an open letter to Amazon CEO Jeff Bezos, petitioning Bezos to "avoid any attempts to limit the further development of Internet commerce". O'Reilly collected 10,000 signatures, and Bezos responded with an open letter. The protest ended with O'Reilly and Bezos visiting Washington, D.C. to lobby for patent reform. The company received a patent, "Method and system for conducting a discussion relating to an item on Internet discussion boards", on February 25, 2003. On May 12, 2006, the USPTO ordered a re-examination of the 1-Click patent based on a request by actor Peter Calveley, who cited an earlier e-commerce patent and the Digicash electronic cash system.

Amazon has a Canadian website in English and French. Until a March 2010 ruling, however, it was prevented from operating any headquarters, servers, fulfillment centers or call centers in Canada by that country's legal restrictions on foreign-owned booksellers. Amazon's Canadian site originates in the United States, and Amazon has an agreement with Canada Post to handle distribution in Canada and for the use of the crown corporation's Mississauga, Ontario, shipping facility. The launch of Amazon.ca generated controversy in Canada. In 2002, the Canadian Booksellers Association and Indigo Books and Music sought a court ruling that Amazon's partnership with Canada Post represented an attempt to circumvent Canadian law. The litigation was dropped in 2004.

In January 2017, doormats with the Indian flag were offered on the Amazon Canada website. Use of the Indian flag in this way is considered offensive to the Indian community and a violation of the Flag Code of India. Indian Minister of External Affairs Sushma Swaraj threatened a visa embargo for Amazon officials if Amazon did not issue an unconditional apology and withdraw all such products. According to deputy commissioner for deceptive marketing practices Josephine Palumbo, Amazon.ca was required by the Canadian Competition Bureau to pay a $1 million penalty and $100,000 in costs for failing to provide "truth in advertising". The fine was levied because some products on Amazon.ca had an artificially-high list price, making a lower selling price appear attractive and giving the company an unfair competitive edge over other retailers. This is a frequent practice among some retailers, and the fine was intended to "send a clear message [to the industry] that unsubstantiated savings claims will not be tolerated". The bureau indicated that Amazon has made changes to ensure that its regular prices are more accurate.

Sales representatives of Amazon's BookSurge division began contacting publishers of print on demand (POD) titles in March 2008 to inform them that for Amazon to continue selling their POD books, they must sign agreements with Amazon's BookSurge POD company. Publishers were told that eventually, the only POD titles Amazon would sell would be those printed by BookSurge. Some publishers felt that this ultimatum was monopolistic, and questioned the ethics of the move and its legality under anti-trust law.

In 2008, Amazon UK was criticized for attempting to prevent publishers from direct selling at a discount from their own websites. Amazon argued that it should be able to pay publishers based on the lower prices on their websites, rather than on the recommended retail price (RRP). Amazon UK was also criticized that year by the British publishing community after withdrawing from sale key titles published by Hachette Livre UK, possibly to pressure Hachette to provide discounts described as unreasonable. Curtis Brown managing director Jonathan Lloyd said that "publishers, authors, and agents are 100% behind [Hachette]. Someone has to draw a line in the sand. Publishers have given 1% a year away to retailers, so where does it stop? Using authors as a financial football is disgraceful." In August 2013, Amazon agreed to end its price-parity policy for marketplace sellers in the European Union in response to investigations by the UK Office of Fair Trade and Germany's Federal Cartel Office.

After the announcement of the Apple iPad on January 27, 2010, Macmillan Publishers began a pricing dispute with Amazon about electronic publications. Macmillan asked Amazon to accept a new pricing scheme it had worked out with Apple, raising the price of e-books from $9.99 to $15. Amazon responded by pulling all Macmillan books (electronic and physical) from its website, although affiliates selling the books were still listed. On January 31, 2010, Amazon "capitulated" to Macmillan's pricing request.

In 2014, Amazon and Hachette became involved in a dispute about agency pricing, when an agent (such as Hachette) determines the price of a book; normally, Amazon dictates the discount level of a book. High-profile authors became involved; hundreds of writers, including Stephen King and John Grisham, signed a petition: "We encourage Amazon in the strongest possible terms to stop harming the livelihood of the authors on whom it has built its business. None of us, neither readers nor authors, benefit when books are taken hostage." Author Ursula K. Le Guin said about Amazon's practice of making Hachette books more difficult to buy on its site, "We're talking about censorship: deliberately making a book hard or impossible to get, 'disappearing' an author." Falling sales of Hachette books on Amazon indicated that its policies probably deterred customers. On August 11, 2014, Amazon removed the option to pre-order Captain America: The Winter Soldier to control the online pricing of Disney films; the company had used similar tactics with Warner Bros. The conflict was resolved in late 2014, with neither side making concessions. Amazon again began to block pre-orders of Disney films in February 2017, just before Moana and Rogue One were due to be released for the home market.

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