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mostlysignssomeportents · 1 year ago

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Tesla's Dieselgate

Elon Musk lies a lot. He lies about being a “utopian socialist.” He lies about being a “free speech absolutist.” He lies about which companies he founded:

https://www.businessinsider.com/tesla-cofounder-martin-eberhard-interview-history-elon-musk-ev-market-2023-2 He lies about being the “chief engineer” of those companies:

https://www.quora.com/Was-Elon-Musk-the-actual-engineer-behind-SpaceX-and-Tesla

He lies about really stupid stuff, like claiming that comsats that share the same spectrum will deliver steady broadband speeds as they add more users who each get a narrower slice of that spectrum:

https://www.eff.org/wp/case-fiber-home-today-why-fiber-superior-medium-21st-century-broadband

The fundamental laws of physics don’t care about this bullshit, but people do. The comsat lie convinced a bunch of people that pulling fiber to all our homes is literally impossible — as though the electrical and phone lines that come to our homes now were installed by an ancient, lost civilization. Pulling new cabling isn’t a mysterious art, like embalming pharaohs. We do it all the time. One of the poorest places in America installed universal fiber with a mule named “Ole Bub”:

https://www.newyorker.com/tech/annals-of-technology/the-one-traffic-light-town-with-some-of-the-fastest-internet-in-the-us

Previous tech barons had “reality distortion fields,” but Musk just blithely contradicts himself and pretends he isn’t doing so, like a budget Steve Jobs. There’s an entire site devoted to cataloging Musk’s public lies:

https://elonmusk.today/

But while Musk lacks the charm of earlier Silicon Valley grifters, he’s much better than they ever were at running a long con. For years, he’s been promising “full self driving…next year.”

https://pluralistic.net/2022/10/09/herbies-revenge/#100-billion-here-100-billion-there-pretty-soon-youre-talking-real-money

He’s hasn’t delivered, but he keeps claiming he has, making Teslas some of the deadliest cars on the road:

https://www.washingtonpost.com/technology/2023/06/10/tesla-autopilot-crashes-elon-musk/

Tesla is a giant shell-game masquerading as a car company. The important thing about Tesla isn’t its cars, it’s Tesla’s business arrangement, the Tesla-Financial Complex:

https://pluralistic.net/2021/11/24/no-puedo-pagar-no-pagara/#Rat

Once you start unpacking Tesla’s balance sheets, you start to realize how much the company depends on government subsidies and tax-breaks, combined with selling carbon credits that make huge, planet-destroying SUVs possible, under the pretense that this is somehow good for the environment:

https://pluralistic.net/2021/04/14/for-sale-green-indulgences/#killer-analogy

But even with all those financial shenanigans, Tesla’s got an absurdly high valuation, soaring at times to 1600x its profitability:

https://pluralistic.net/2021/01/15/hoover-calling/#intangibles

That valuation represents a bet on Tesla’s ability to extract ever-higher rents from its customers. Take Tesla’s batteries: you pay for the battery when you buy your car, but you don’t own that battery. You have to rent the right to use its full capacity, with Tesla reserving the right to reduce how far you go on a charge based on your willingness to pay:

https://memex.craphound.com/2017/09/10/teslas-demon-haunted-cars-in-irmas-path-get-a-temporary-battery-life-boost/

That’s just one of the many rent-a-features that Tesla drivers have to shell out for. You don’t own your car at all: when you sell it as a used vehicle, Tesla strips out these features you paid for and makes the next driver pay again, reducing the value of your used car and transfering it to Tesla’s shareholders:

https://www.theverge.com/2020/2/6/21127243/tesla-model-s-autopilot-disabled-remotely-used-car-update

To maintain this rent-extraction racket, Tesla uses DRM that makes it a felony to alter your own car’s software without Tesla’s permission. This is the root of all autoenshittification:

https://pluralistic.net/2023/07/24/rent-to-pwn/#kitt-is-a-demon

This is technofeudalism. Whereas capitalists seek profits (income from selling things), feudalists seek rents (income from owning the things other people use). If Telsa were a capitalist enterprise, then entrepreneurs could enter the market and sell mods that let you unlock the functionality in your own car:

https://pluralistic.net/2020/06/11/1-in-3/#boost-50

But because Tesla is a feudal enterprise, capitalists must first secure permission from the fief, Elon Musk, who decides which companies are allowed to compete with him, and how.

Once a company owns the right to decide which software you can run, there’s no limit to the ways it can extract rent from you. Blocking you from changing your device’s software lets a company run overt scams on you. For example, they can block you from getting your car independently repaired with third-party parts.

But they can also screw you in sneaky ways. Once a device has DRM on it, Section 1201 of the DMCA makes it a felony to bypass that DRM, even for legitimate purposes. That means that your DRM-locked device can spy on you, and because no one is allowed to explore how that surveillance works, the manufacturer can be incredibly sloppy with all the personal info they gather:

https://www.cnbc.com/2019/03/29/tesla-model-3-keeps-data-like-crash-videos-location-phone-contacts.html

All kinds of hidden anti-features can lurk in your DRM-locked car, protected from discovery, analysis and criticism by the illegality of bypassing the DRM. For example, Teslas have a hidden feature that lets them lock out their owners and summon a repo man to drive them away if you have a dispute about a late payment:

https://tiremeetsroad.com/2021/03/18/tesla-allegedly-remotely-unlocks-model-3-owners-car-uses-smart-summon-to-help-repo-agent/

DRM is a gun on the mantlepiece in Act I, and by Act III, it goes off, revealing some kind of ugly and often dangerous scam. Remember Dieselgate? Volkswagen created a line of demon-haunted cars: if they thought they were being scrutinized (by regulators measuring their emissions), they switched into a mode that traded performance for low emissions. But when they believed themselves to be unobserved, they reversed this, emitting deadly levels of NOX but delivering superior mileage.

The conversion of the VW diesel fleet into mobile gas-chambers wouldn’t have been possible without DRM. DRM adds a layer of serious criminal jeopardy to anyone attempting to reverse-engineer and study any device, from a phone to a car. DRM let Apple claim to be a champion of its users’ privacy even as it spied on them from asshole to appetite:

https://pluralistic.net/2022/11/14/luxury-surveillance/#liar-liar

Now, Tesla is having its own Dieselgate scandal. A stunning investigation by Steve Stecklow and Norihiko Shirouzu for Reuters reveals how Tesla was able to create its own demon-haunted car, which systematically deceived drivers about its driving range, and the increasingly desperate measures the company turned to as customers discovered the ruse:

https://www.reuters.com/investigates/special-report/tesla-batteries-range/

The root of the deception is very simple: Tesla mis-sells its cars by falsely claiming ranges that those cars can’t attain. Every person who ever bought a Tesla was defrauded.

But this fraud would be easy to detect. If you bought a Tesla rated for 353 miles on a charge, but the dashboard range predictor told you that your fully charged car could only go 150 miles, you’d immediately figure something was up. So your Telsa tells another lie: the range predictor tells you that you can go 353 miles.

But again, if the car continued to tell you it has 203 miles of range when it was about to run out of charge, you’d figure something was up pretty quick — like, the first time your car ran out of battery while the dashboard cheerily informed you that you had 203 miles of range left.

So Teslas tell a third lie: when the battery charge reached about 50%, the fake range is replaced with the real one. That way, drivers aren’t getting mass-stranded by the roadside, and the scam can continue.

But there’s a new problem: drivers whose cars are rated for 353 miles but can’t go anything like that far on a full charge naturally assume that something is wrong with their cars, so they start calling Tesla service and asking to have the car checked over.

This creates a problem for Tesla: those service calls can cost the company $1,000, and of course, there’s nothing wrong with the car. It’s performing exactly as designed. So Tesla created its boldest fraud yet: a boiler-room full of anti-salespeople charged with convincing people that their cars weren’t broken.

This new unit — the “diversion team” — was headquartered in a Nevada satellite office, which was equipped with a metal xylophone that would be rung in triumph every time a Tesla owner was successfully conned into thinking that their car wasn’t defrauding them.

When a Tesla owner called this boiler room, the diverter would run remote diagnostics on their car, then pronounce it fine, and chide the driver for having energy-hungry driving habits (shades of Steve Jobs’s “You’re holding it wrong”):

https://www.wired.com/2010/06/iphone-4-holding-it-wrong/

The drivers who called the Diversion Team weren’t just lied to, they were also punished. The Tesla app was silently altered so that anyone who filed a complaint about their car’s range was no longer able to book a service appointment for any reason. If their car malfunctioned, they’d have to request a callback, which could take several days.

Meanwhile, the diverters on the diversion team were instructed not to inform drivers if the remote diagnostics they performed detected any other defects in the cars.

The diversion team had a 750 complaint/week quota: to juke this stat, diverters would close the case for any driver who failed to answer the phone when they were eventually called back. The center received 2,000+ calls every week. Diverters were ordered to keep calls to five minutes or less.

Eventually, diverters were ordered to cease performing any remote diagnostics on drivers’ cars: a source told Reuters that “Thousands of customers were told there is nothing wrong with their car” without any diagnostics being performed.

Predicting EV range is an inexact science as many factors can affect battery life, notably whether a journey is uphill or downhill. Every EV automaker has to come up with a figure that represents some kind of best guess under a mix of conditions. But while other manufacturers err on the side of caution, Tesla has the most inaccurate mileage estimates in the industry, double the industry average.

Other countries’ regulators have taken note. In Korea, Tesla was fined millions and Elon Musk was personally required to state that he had deceived Tesla buyers. The Korean regulator found that the true range of Teslas under normal winter conditions was less than half of the claimed range.

Now, many companies have been run by malignant narcissists who lied compulsively — think of Thomas Edison, archnemesis of Nikola Tesla himself. The difference here isn’t merely that Musk is a deeply unfit monster of a human being — but rather, that DRM allows him to defraud his customers behind a state-enforced opaque veil. The digital computers at the heart of a Tesla aren’t just demons haunting the car, changing its performance based on whether it believes it is being observed — they also allow Musk to invoke the power of the US government to felonize anyone who tries to peer into the black box where he commits his frauds.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/07/28/edison-not-tesla/#demon-haunted-world

This Sunday (July 30) at 1530h, I’m appearing on a panel at Midsummer Scream in Long Beach, CA, to discuss the wonderful, award-winning “Ghost Post” Haunted Mansion project I worked on for Disney Imagineering.

Image ID [A scene out of an 11th century tome on demon-summoning called 'Compendium rarissimum totius Artis Magicae sistematisatae per celeberrimos Artis hujus Magistros. Anno 1057. Noli me tangere.' It depicts a demon tormenting two unlucky would-be demon-summoners who have dug up a grave in a graveyard. One summoner is held aloft by his hair, screaming; the other screams from inside the grave he is digging up. The scene has been altered to remove the demon's prominent, urinating penis, to add in a Tesla supercharger, and a red Tesla Model S nosing into the scene.]

Image: Steve Jurvetson (modified) https://commons.wikimedia.org/wiki/File:Tesla_Model_S_Indoors.jpg

CC BY 2.0 https://creativecommons.org/licenses/by/2.0/deed.en

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iamnaturalnana · 6 months ago

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The Ex-Pfizer Scientist Who Became an Anti-Vax Hero

Michael Yeadon was a scientific researcher and vice president at drugs giant Pfizer Inc. He co-founded a successful biotech. Then his career took an unexpected turn. By STEVE STECKLOW and ANDREW MACASKILL in LONDON Filed March 18, 2021, 11 a.m. GMT Late last year, a semi-retired British scientist co-authored a petition to Europe’s medicines regulator. The petitioners made a bold demand: Halt…

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sparklyandhaunted · 1 year ago

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“They've gotten really good at exploiting the rule book and maximizing certain points to work in their favor involving EPA tests,” Elfalan told Reuters. The practice can “misrepresent what their customers will experience with their vehicles.”

- Tesla created secret team to suppress thousands of driving range complaints by STEVE STECKLOW and NORIHIKO SHIROUZU

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nullarysources · 1 year ago

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Tesla created secret team to suppress thousands of driving range complaints

Steve Stecklow and Norihiko Shirouzu for Reuters:

… Tesla employees had been instructed to thwart any customers complaining about poor driving range from bringing their vehicles in for service. Last summer, the company quietly created a "Diversion Team" in Las Vegas to cancel as many range-related appointments as possible.

The Austin, Texas-based electric carmaker deployed the team because its service centers were inundated with appointments from owners who had expected better performance based on the company's advertised estimates and the projections displayed by the in-dash range meters of the cars themselves, according to several people familiar with the matter.

Inside the Nevada team's office, some employees celebrated canceling service appointments by putting their phones on mute and striking a metal xylophone, triggering applause from coworkers who sometimes stood on desks. The team often closed hundreds of cases a week and staffers were tracked on their average number of diverted appointments per day.

Is that good

#news #technology #cars #capitalism

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xf-2 · 5 years ago

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今年1月の冷え込みの厳しい朝、ポーランドの国内公安機関（ISA）がワルシャワのアパートの一室に立ち入った。彼らは写真や電子機器を没収、アパートに住む外国人ビジネスマンを逮捕した。

ポーランド語に堪能な元外交官でもあるこのビジネスマンに対する容疑は、世間を驚かせた。ポーランドの元安全保障当局者と協力し、ある国のためにスパイ活動を行った、というものだった。

まるで冷戦時代のスパイ小説、その21世紀版のようだが、相手はかつて敵だった米国でも、ソ連時代の盟主ロシアでもなく、中国だった。

ビジネスマンは中国人で、世界最大の通信機器メーカー、華為技術（ファーウェイ）の営業担当者。そして、同じ日に逮捕された協力者とされるポーランドの元当局者は、一兵卒ではなくサイバーセキュリティを専門とする幹部だった。

この逮捕によって、中国を相手にした米国の「新冷戦」の新たな戦端が開かれた。

収監先から文書で回答

米国は、次世代高速通信規格「5G」の導入に当たってファーウェイ機器を使用しないよう同盟国に働きかけており、ファーウェイは新冷戦の中心的な存在となっている。

トランプ米政権は5月、国内通信網にファーウエイ機器を使用することを禁じ、米企業が同社に製品を販売することを規制した。米政府は、ファーウェイが中国政府の支配下にあるとみて、同社の5G技術がスパイ行為や重要インフラの妨害などに悪用されかねないと懸念している。ファーウエイ側は、こうした指摘を否定している。

6月末に大阪市で開催された20カ国・地域（G20）首脳会議（サミット）で、トランプ氏はファーウェイへの販売規制を緩和する方針を示したが、国内通信網からファーウェイを排除する決定は覆さなかった。

ポーランドの検察当局は逮捕を公表して以降、事件の詳細はほとんど明らかにしておらず、機密扱いにしている。

だが、疑惑の渦中にある中国人ビジネスマンの王偉晶容疑��（37）は、ロイターの質問に対して収監先から長文の回答を寄せ、無実を主張した。

「私は全く関与したことがないことについて誤った追及を受け、家族から引き離されている。言うまでもなく、社員にスパイ容疑をかければファーウェイをポーランドや他の国から追い出す格好の口実となる」と、王容疑者は主張した。

担当弁護士のバルトゥオミ・ヤンコフスキー氏を通じて寄せられたこの回答には、事件について、また、同時に逮捕されたポーランド人のピョートル・ドゥルバイヴォ容疑者との関係について、これまで明らかになっていなかった詳細が含まれていた。

例えば、王容疑者はドゥルバイヴォ容疑者のことを、おそらくポーランド人の中で一番の親友と説明。ポーランド政府当局者が深センにあるファーウェイ本社を訪問した2013年、10日間の休暇を取って中国を訪れた2018年夏を含め、少なくとも3度、中国でともに時間を過ごしたことを明らかにした。また、逮捕後に王容疑者を解雇したファーウェイが、その後も一定の支援を提供しているとした。

ロイターは、ポーランドの治安当局がドゥルバイヴォ容疑者の中国訪問に関心を寄せていることをつかんだ。同容疑者はワルシャワの軍事大学で光ファイバー通信ネットワークを経由した侵入監視システムの開発に関わっており、当局がそれについても調査していることがわかった。

ロシアからの圧力に対抗するため米国の安全保障の後ろ盾に依存しているポーランドの政府関係者は、王容疑者の逮捕が、自国の通信網でファーウェイが果たす役割について再考するきっかけになったと話す。ポーランドは、まだファーウェイに規制を設けるかどうか決定していない。

「ファーウェイのような中国企業の製品を使うことの危険性は、ポーランドでの事件が非常にリアルに証明している」──駐ポーランド米大使のジョージェット・モスバッカー氏はロイターの取材にこう述べ、通信網の整備にあたり、「欧州のすべての同盟国が、この脅威を真剣に受け止める必要がある」と指摘した。

ファーウェイの広報担当者は、「ポーランドでの事案は司法案件であり、現段階では何もコメントできない」としている。

政府内に築いた人脈

王容疑者は、自身の経歴を考えれば、ポーランド当局がなぜ自分を中国のスパイとみているのかは理解できるとしている。

ポーランド語を操り、ファーウェイで勤務していた事実のほかに、王容疑者は港湾都市グダニスの中国総領事館に4年半勤務し、ポーランド当局内に人脈を広げていた。

「私は良きスパイ候補と見られ得るのだろう」と、収監中の王容疑者はロイターに回答を寄せた。

だが王容疑者は、中国政府のためスパイ行為を働いたことを全面的に否定する。

「一度もそのような誘いを受けたことはない。中国政府のためにスパイをしたことなどない。ポーランドに損害を与えるようなことは一切やっていない。ポーランドは私の第2の故郷であり、そんなことは荒唐無稽だ」と、王容疑者は反論した。

王容疑者を担当するヤンコフスキー弁護士は、事件の証拠については議論しないとしつつも、王容疑者は、米国がファーウェイに仕掛けた戦争に巻き込まれたと考えているとした。また、保釈または起訴されるまでに2年以上収監される可能性があることに懸念を示した。ポーランドの法律では、当局の捜査が行われる間、容疑者は何年も拘束されることがある。

王容疑者の運命が最終的にどうなるにせよ、この事件は米国がファーウェイに仕掛けた戦争のただ中に放り込まれた形だ。

2月にポーランドを訪問したペンス米副大統領は、王容疑者とドゥルバイヴォ容疑者の逮捕に言及し、「国家の安全保障を脅かしかねない形で通信領域が侵されるれることを防ごうとする、ポーランドのコミットメントを示したものだ」と称賛した。

中国外務省はロイターの問い合わせに対し、1月に出したコメントを参照するよう回答した。中国外務省報道官は当時、ファーウェイとポーランドの関係先の双方が、この件は「完全に個人の案件だ」とする声明を出したことを「留意した」とした上で、「ファーウェイの安全性は、長年取引先から評価を受けてきた」と述べていた。

ファーウェイによると、同社は900人以上の従業員を抱えるポーランドに13億ドル（約1400億円）以上を投じてきた。同国の通信携帯電話大手プレイ・コミュニケーションズは、基地局の大半でファーウェイ機材を使用している。

1月8日の逮捕から数日後、ファーウェイは王容疑者を解雇した。

しかし同容疑者によると、妻に対してファーウェイの社員が「毎日のように」支援を提供しているほか、会社側も「捜査を助けるため」、職務関連の書類を弁護士に提供した。王容疑者は、弁護士費用も同社に負担してもらいたいとしている。

一方、ドゥルバイヴォ容疑者の弁護士は、記事のためにコメントを求めたロイターに対して回答を拒否した。王容疑者の妻は、インタビューの要請を友人を通じて断った。

ロイターはこの記事を執筆するに当たり、王容疑者やドゥルバイヴォ容疑者の知人、事件に詳しい関係者20人以上に取材した。その中には元同僚や友人、取引先や政府当局者、元情報当局者などが含まれる。

取材を通じて、2人の容疑者がポーランド政府内や通信業界に幅広い人脈を築いていたこと、互いに長年の知り合いで、極めて緊密だったことが判明した。

ポーランドのドゥダ大統領はロイターに対し、容疑は「空虚なもの」ではなく、関連書類が存在すると指摘。スパイ容疑による2人の逮捕は「こうした行為が行われた可能性を示す証拠がある」ことを意味していると述べた。

「私が理解するところでは、ポーランドの治安当局と検察当局の観点から見て、事件は疑いのないものだ」と、ドゥダ大統領は6月に行ったインタビューで説明した。

学生時代にポーランド留学

スタニスラウというポーランド��を持つ王容疑者とポーランドの付き合いは20年以上になる。

中国北部石家庄の寒村出身の王容疑者は、村始まって以来の大学進学者の1人で、名門の北京外語大でポーランド語を学んだ。

「正直言って、当時はポーランドについてほとんど知らなかった。両親と相談して、中国トップの外語大でポーランド語を勉強すれば、私の将来に向けた良い投資になると考えた」と、王容疑者は言う。

大学では熱心に勉強した。図書館に7冊あったポーランド語の辞書のうち、学生が借りられる4冊には、すべて貸出先に王容疑者の名前が記入されていたと、王容疑者の友人は話す。

在学中、王容疑者はポーランドの中部ウッチで語学を学ぶ奨学生4のうちの1人に選抜。2001年秋にポーランドへ渡り、10カ月勉強した。

いったん中国に戻って貿易関係の仕事に就いたが、2006年にグダニスの総領事館が通訳を探していていることを知って応募したところ、採用されたという。

王容疑者は、総領事館の中国人職員3人のうちの1人として4年半働いたという。ポーランド語が話せるのは王容疑者だけで、肩書は「文化アタッシェ」だったが、外交儀礼から事務、査証など幅広い業務をこなした。王容疑者は「雪かきや洗車もやった」としている。

また、総領事と共に「ポーランド北部をくまなく訪れ、地方当局者と多数の会議をこなした」という。

2011年1月に領事館を退職、新たな挑戦を求めて中国に帰国した。その2カ月後、ファーウェイからポーランドの広報担当職について接触があったという。ファーウェイは、王容疑者の北京の大学時代や、中国総領事館勤務時代の知り合いから連絡先を入手し��ようだ。

ファーウェイに採用された王容疑者は、2011年6月にポーランドへ戻った。同社はポーランドで、通信事業者への機材販売から事業を拡大し、新たな市場に自社技術を展開しようとしていた。王容疑者はその広報を任されることになった。

ポーランドの政府当局者やさまざまな機関、業界団体と関係を築き、「中国関係の機関と良好な関係を維持すること」が王容疑者の仕事に含まれた。中国大使館とも、定期的にコンタクトを持っていたという。

2017年には法人事業部の営業担当者となり、ポーランドの公共セクターに売り込みをはかった。政府機関や国有企業が主な売り先だったという。鉄道やネットワークのセキュリティ、サイバーセキュリティを研究する機関も含まれていた。

王容疑者は、ポーランド政府や電気通信業界に幅広い人脈があったが、仕事のためだったと説明する。「業界の重要な人物を知らなければ職務怠慢だ」と、王容疑者は言う。

彼と交流のあった人たちは、王容疑者は熱心に人脈を広げていたと話す。ワルシャワの中国大使館が主催するイベントには毎回のように参加し、中国やポーランドの祝日に、中国茶やカレンダーなどのギフトや、あいさつのメールを受け取ったと話す人もいた。ポーランドの元政府当局者は、王容疑者の流暢なポーランド語は、他の同僚と一��を画すものだったと話す。

王容疑者はロイターに、ファーウェイの5G事業には直接かかわっていなかったと説明している。

「社員がスパイ容疑に問われたとき、会社に他に何ができるだろう。会社はやらなければならないことをやったままでで、理解できる」と、自身の解雇を振り返った。

米国とポーランドの接近

ポーランドの政府当局者は、中国との通商関係の強化に前向きだと発言しているが、ドゥダ大統領は、港湾や空港も含めた戦略的なインフラへの投資には反対だと話す。ポーランドと中国の関係は、ロシアからの脅威が増大したと考えるポーランドが、米政府との関係を強化したことでも冷え込んだと、アナリストは指摘する。

ポーランド政府の当局者によると、中国の対外情報機関は、市場をより詳細に把握して自国企業のビジネスに役立てるため、ポーランドの経済と政治への監視を強化しているという。「われわれの機関はこうした動向を把握し、追跡している」と、この政府関係者は話した。

今回のスパイ容疑事件は、ポーランドと中国の関係をさらにこじれさせた。

「このような活動が国内で行われることは容認できず、われわれの関係は袋小路にはまっている」と、ドゥダ大統領は話し、「特に、通信技術のような戦略的でセンシティブな分野が関わる場合は容認できない」と付け加えた。

王容疑者の友人で、ともに逮捕されたドゥルバイヴォ容疑者は、ポーランド政府の上層レベルで仕事をしていた。国家安全保障の機密事項に関わる人々や部署と仕事をすることもあった。

サイバーセキュリティと電気通信の専門家であるドゥルバイヴォ容疑者は、40歳代後半とみられる。ビジネス交流サイトのリンクトインに登録された同名のプロフィールによると、20年以上にわたり内務省や国内対応の情報機関であるISAに勤務していた。ロイターは、ここに記載してある肩書の多くがドゥルバイヴォ容疑者の実際のものだったことを確認した。

ドゥルバイヴォ容疑者は2009年にISAに入り、電気通信やサイバーセキュリティを担当。当時のISA長官に助言をすることもあったと、一緒に仕事をした人や、地元メディアは説明している。

リンクトイン上の情報によると、ISAに4年以上勤務し、同機関では珍しい対外向けの仕事も担当していた。サイバーセキュリティについてテレビ取材などを受けており、2010年の地元局のインタビューでは、中国は「ハッキングの主導国」だと述べていた。

ポーランドの電子通信局によると、ドゥルバイヴォ容疑者は2012年5月にISAから出向してきた。最初の2年間は当時局長だったマグダレーナ・ガイ氏のアドバイザーとして働き、2016年まで在籍した。

ガイ氏は、ドゥルバイヴォ容疑者とは友人だったと話し、「数年一緒に働いたが、非常に愛国心が強い印象だった」と振り返った。

ドゥルバイヴォ容疑者は2012─15年にかけ、軍の技術大学で行われた光ファイバー通信ネットワークを経由した機密情報の窃取を防ぐシステム開発という、極めて機密性の高いプロジェクトに関わっていた。同容疑者の逮捕後、当局はこのプロジェクトに詳しい人物少なくとも2人から事情聴取した。

地元メディアによると、ドゥルバイヴォ容疑者は2016年、電子通信局で、ローマ法王のポーランド訪問の警備を担当する専門家��と仕事をした。翌2017年、同容疑者はISAを退職。その年10月に、仏オランジュ傘下のポーランド通信大手オレンジ・ポルスカのコンサルタントに就任した。同容疑者は逮捕後、この職を退いたという。

友情の絆

王容疑者はロイターに対し、ドゥルバイヴォ容疑者と出会った時期や、情報機関職員であることを知った時期は正確には覚えていないと回答した。ただ、2013年に深センにあるファーウェイ本社を訪問したポーランド政府代表団に、同容疑者が参加していたことを明かにした。

電子通信局長だったガイ氏は、「スパイ活動防止」のため、ISAで経験のある同容疑者を同行させたと説明した。

王容疑者は、ドゥルバイヴォ容疑者との付き合いについて、最初は全てサイバーセキュリティなどの仕事関係だったとしている。また、ファーウェイが香港で行ったブロードバンド関係の会議に同容疑者をポーランド当局の代表として招待し、同容疑者が応じたことを明らかにした。

事情に詳しい人物によると、ドゥルバイヴォ容疑者はこの2015年の会議に参加した代表団の1人で、その際深センのファーウェイ本社も訪問したという。

この間に、王容疑者とドゥルバイヴォ容疑者は親しくなった。

「2016年に息子が生まれる前、ポーランド人の友人にどの病院がいいかアドバイスを求めたが、ピョートルが良い医者を見つけてくれた」と王容疑者は説明し、「いつも親切に手を差し伸べ、温かいアドバイスをくれた」と振り返った。

王容疑者は、ドゥルバイヴォ容疑者にファーウェイの職をあっせんしようとしたこともある。しかし、それは「うまくいかなかった」としている。

王容疑者は、逮捕後はドゥルバイヴォ容疑者を目にしていないと述べ、「このゲーム」における同容疑者の役割も分からないとした。

だが王容疑者は、ファーウェイが標的になったことは驚かないとしている。2018年の終わりには、ポーランドが米国に追随して「ファーウェイに対して行動を起こす」と予測していたという。

ただし、「個人が標的になるとは思わなかった」と付け加えた。

（Joanna Plucinska記者、 Koh Gui Qing記者、 Alicja Ptak記者、 Steve Stecklow記者、翻訳：山口香子、編集：久保信博）

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libertariantaoist · 6 years ago

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When U.S. Secretary of State Mike Pompeo gave speeches about mega corruption in Iran this year, he did not cite a Reuters’ 2013 article or give credit to its three reporters; Steve Stecklow, Babak Dehghanpisheh and Yeganeh Torbati.

Instead he presented it as the kind of specialized knowledge that only a high-ranking official such as himself might be in a position to reveal. “Not many people know this,” Pompeo told an audience gathered last July at the Ronald Reagan Presidential Foundation and Library in Simi Valley, California, “but the Ayatollah Khamenei has his own personal, off-the-books hedge fund called the Setad, worth $95 billion, with a B.” Pompeo went on to tell his audience that Khamenei’s wealth via Setad was untaxed, ill-gotten, and used as a “slush fund” for the Islamic Revolutionary Guard Corps.

But a comparison between the 5-year-old Reuters article and Pompeo’s speech, which was lauded by The Wall Street Journal’s editorial board as “truth telling,” shows a type of symbiosis that could only help cast a backward glow over President Donald Trump’s move, last summer, to reimpose all sanctions lifted by the Obama’s administration’s historic nuclear deal with Iran.

#ivan kesic #consortium news #mike pompeo #iran sanctions #reuters #ayatollah ali khamenei

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latinbossboy9 · 3 years ago

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The Imitation Game

A REUTERS SPECIAL REPORT

Amazon copied products and rigged search results to promote its own brands, documents show

Illustration by Catherine Tai

A trove of internal Amazon documents reveals how the e-commerce giant ran a systematic campaign of creating knockoff goods and manipulating search results to boost its own product lines in India - practices it has denied engaging in. And at least two top Amazon executives reviewed the strategy.

By ADITYA KALRA in New Delhi and STEVE STECKLOW in London

Filed Oct. 13, 2021, 11 a.m. GMT

Amazon.com Inc has been repeatedly accused of knocking off products it sells on its website and of exploiting its vast trove of internal data to promote its own merchandise at the expense of other sellers. The company has denied the accusations.

But thousands of pages of internal Amazon documents examined by Reuters – including emails, strategy papers and business plans – show the company ran a systematic campaign of creating knockoffs and manipulating search results to boost its own product lines in India, one of the company’s largest growth markets.

The documents reveal how Amazon’s private-brands team in India secretly exploited internal data from Amazon.in to copy products sold by other companies, and then offered them on its platform. The employees also stoked sales of Amazon private-brand products by rigging Amazon’s search results so that the company’s products would appear, as one 2016 strategy report for India put it, “in the first 2 or three … search results” when customers were shopping on Amazon.in.

Among the victims of the strategy: a popular shirt brand in India, John Miller, which is owned by a company whose chief executive is Kishore Biyani, known as the country’s “retail king.” Amazon decided to “follow the measurements of” John Miller shirts down to the neck circumference and sleeve length, the document states.

Amazon founder Jeff Bezos speaks via video conference during a hearing of a U.S. Congressional subcommittee in July last year. Amazon is under investigation in the United States, Europe and India for alleged anti-competitive business practices. Graeme Jennings/Pool via REUTERS

The internal documents also show that Amazon employees studied proprietary data about other brands on Amazon.in, including detailed information about customer returns. The aim: to identify and target goods - described as “reference” or “benchmark” products - and “replicate” them. As part of that effort, the 2016 internal report laid out Amazon’s strategy for a brand the company originally created for the Indian market called “Solimo.” The Solimo strategy, it said, was simple: “use information from Amazon.in to develop products and then leverage the Amazon.in platform to market these products to our customers.”

The Solimo project in India has had international impact: Scores of Solimo-branded health and household products are now offered for sale on Amazon’s U.S. website, Amazon.com.

The 2016 document further shows that Amazon employees working on the company’s own products, known as private brands or private labels, planned to partner with the manufacturers of the products targeted for copying. That’s because they learned that these manufacturers employ “unique processes which impact the end quality of the product.”

The document, entitled “India Private Brands Program,” states: “It is difficult to develop this expertise across products and hence, to ensure that we are able to fully match quality with our reference product, we decided to only partner with the manufacturers of our reference product.” It termed such manufacturer expertise “Tribal Knowledge.”

This is the second in a series of stories based on internal Amazon documents that provide a rare, unvarnished look, in the company’s own words, into business practices that it has denied for years.

Amazon has been accused before by employees who worked on private-brand products of exploiting proprietary data from individual sellers to launch competing products and manipulating search results to increase sales of the company’s own goods.

In sworn testimony before the U.S. Congress in 2020, Amazon founder Jeff Bezos explained that the e-commerce giant prohibits its employees from using the data on individual sellers to help its private-label business. And, in 2019, another Amazon executive testified that the company does not use such data to create its own private-label products or alter its search results to favor them.

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But the internal documents seen by Reuters show for the first time that, at least in India, manipulating search results to favor Amazon’s own products, as well as copying other sellers’ goods, were part of a formal, clandestine strategy at Amazon – and that high-level executives were told about it. The documents show that two executives reviewed the India strategy – senior vice presidents Diego Piacentini, who has since left the company, and Russell Grandinetti, who currently runs Amazon’s international consumer business.

In a written response to questions for this report, Amazon said: “As Reuters hasn’t shared the documents or their provenance with us, we are unable to confirm the veracity or otherwise of the information and claims as stated. We believe these claims are factually incorrect and unsubstantiated.” The company did not elaborate. The statement also did not address questions from Reuters about the evidence in the documents that Amazon employees copied other companies’ products for its own brands.

The company said the way it displays search results doesn’t favor private-brand products. “We display search results based on relevance to the customer’s search query, irrespective of whether such products have private brands offered by sellers or not,” Amazon said.

Amazon also said that it “strictly prohibits the use or sharing of non-public, seller-specific data for the benefit of any seller, including sellers of private brands,” and that it investigates reports of its employees violating that policy.

Piacentini and Grandinetti didn’t respond to requests for comment.

The unfiltered insight the documents offer into Amazon’s aggressive use of its market power could intensify the legal and regulatory pressure the company is facing in many countries.

Amazon is under investigation in the United States, Europe and India for alleged anti-competitive practices that hurt other businesses. In India, the allegations include unfairly favoring its own branded merchandise. Amazon declined to comment on the investigations.

Jonas Koponen, an antitrust attorney with Linklaters LLP in Brussels, said the Reuters findings on Amazon’s practices in India would likely interest the European Commission, which is probing whether the company has used non-public seller data to boost its own retail business. India has cooperation agreements with the United States and the European Commission to exchange information related to enforcement of antitrust laws.

“When any one competition authority is looking into aspects of one of these globally present organizations’ behavior, they will certainly be interested in understanding what evidence there is in other parts of the world and the extent to which that evidence relates to the practices that they themselves are investigating,” Koponen said.

The documents also support criticism of Amazon laid out by Lina Khan, the new chair of the U.S. Federal Trade Commission, or FTC. Khan published a paper in 2017 that argued that Amazon’s private-brand business raised anti-competitive concerns.

Lina Khan, who became chair of the Federal Trade Commission in June, speaks at a Senate confirmation hearing in April. She wrote in 2017 that Amazon’s private-brand business has “anticompetitive implications.” Saul Loeb/Pool via REUTERS

“Use information from Amazon.in to develop products and then leverage the Amazon.in platform to market these products to our customers.”

An internal Amazon document lays out the strategy for Solimo, a private brand the company created in India

“It is third-party sellers who bear the initial costs and uncertainties when introducing new products; by merely spotting them, Amazon gets to sell products only once their success has been tested,” she wrote. “The anticompetitive implications here seem clear.”

Amazon filed a petition in June with the FTC asking that Khan recuse herself from all matters related to the company because of “her repeated proclamations that Amazon has violated the antitrust laws.”

Khan and the FTC didn’t respond to requests for comment.

In the first article in this series, Reuters reported in February that Amazon had for years given preferential treatment to a few big sellers on its Indian platform, and used those sellers to circumvent regulations designed to protect the country’s small retailers. That report triggered action by India’s main financial crime-fighting agency, which sought information and documents from Amazon. In addition, the nation’s antitrust watchdog submitted the story as an exhibit in a court battle with Amazon over its investigation into the company’s alleged anti-competitive practices. The court rejected Amazon’s request to halt the probe.

“We are committed to extending cooperation to all authorities in India and are confident about our compliance,” Amazon said in its statement to Reuters.

Like many other retailers, Amazon views its own brands as a major driver of increased profitability. Private-brand products often have higher profit margins than normal retail brands because production and marketing costs can be lower.

An internal email sent by Amazon executive Grandinetti to a group of company executives in December 2018 stated: “We believe that over the next several years, Private Brands will be one of the most important growth and profitability drivers in the Consumer business.” Grandinetti added that company executives believed private brands “can achieve 10% penetration” of the company’s consumer business worldwide over the next five years.

Introducing Amazon’s own brands was especially critical in India. The company began its e-commerce foray there in 2013, and soon recorded millions of dollars in losses, one internal document shows. To make the business “sustainable in the long run,” the 2016 Private Brands document notes, Amazon embarked on a strategy centered on introducing its existing private brands, such as AmazonBasics, and new ones tailored to India.

The 2016 document stated a goal: offer Amazon’s own goods in 20% to 40% of all product categories on Amazon.in within two years. Amazon would achieve profitability in its private-brand business by “only launching products that will provide more margin than comparable reference brand products.”

Amazon predicted private-brand sales would reach nearly $600 million by 2020 in India, according to a 2017 internal business strategy document. “We will be amongst the Top 3 brands in each sub-category that we play in,” the document stated.

Whether it achieved that sales goal isn’t clear; Amazon doesn’t disclose its private-brand sales in India. The company didn’t comment on the strategic goals and other details from the documents reported in this article.

The India strategy for boosting sales of Amazon’s own products was reviewed by senior company executives, including Russell Grandinetti, who currently heads the company’s international consumer business. Grandinetti is seen here during a visit to Dubai in 2017. REUTERS/Ahmed Jadallah

An Amazon press release in 2018 revealed just how successful its private-brand business was becoming in India. Celebrating “record sales” during an annual promotion, the release stated, “Amazon Brands saw its best performance ever with 11X jump over last Great Indian Festival.”

Today, Amazon.in lists thousands of Amazon-branded offerings – from garbage bags, bed sheets and soap to air conditioners and televisions. According to the website, many are best-sellers.

One key person involved in 2016 with Amazon’s private-brand business in India was Amit Nanda, who later became a country director of the program, according to his LinkedIn profile. He holds an MBA from the Indian Institute of Management, Ahmedabad, one of the nation’s top business schools. Before joining Amazon in 2014, according to his LinkedIn profile, he worked at Citibank and the Indian arm of consumer-goods giant Unilever.

As Amazon was reviewing its private-brand strategy in India in 2016, Amazon India employees had a meeting with Grandinetti. A longtime Amazon manager, at the time he was in charge of content for Kindle, the company’s popular reading device. But Amazon had announced that he would soon lead its international consumer business, including India.

During the meeting, Nanda was assigned various tasks, according to one Amazon document. Among them: The India private brands “business should be large and profitable. Build for scale.”

Nanda declined to comment for this story.

‘Glance views’

With its population of 1.3 billion people and a growing middle class, India represents a huge and potentially lucrative market for Amazon. But it’s also a country where foreign e-commerce players face a complex and protectionist regulatory regime.

The country’s brick-and-mortar retailers comprise an important political constituency for Indian Prime Minister Narendra Modi. Concerned that predatory pricing could hurt these merchants, India prohibits foreign e-commerce players from selling most goods directly to consumers, as they do in many other countries. Amazon and other foreign companies are restricted to operating an online marketplace of third-party sellers, with no one vendor allowed to hold an advantage over another. As a result, Amazon sells most of its private brands through other vendors.

In launching its private-brand business, internal documents show how Amazon used its Indian website to gain a clear edge for its own products on the platform. The creation of its Solimo brand offers a case study.

According to the internal documents, the word Solimo is derived from Solimões - the name for the upper stretches of the Amazon River in Brazil.

Amazon created a brand called Solimo for the Indian market. The brand has gone global: Today, scores of Solimo products are offered for sale on Amazon’s U.S. website. REUTERS/Aditya Kalra

With the Solimo line, Amazon aimed to offer items that equaled or exceeded the quality of competing brands but were 10% to 15% cheaper, the 2016 Private Brands document shows. Amazon employees studied different product categories, and compared their overall market size with how well those segments were doing on Amazon.in. They then targeted categories such as home furnishings. Amazon found that furnishings was a $2 billion business in India - but its own website’s three-month sales in mid-2014 totaled about $1 million.

In its analysis, Amazon used a metric called “glance views” that quantified which products were being viewed by customers on its website. Explaining why it zeroed in on glance views, the 2016 Amazon document noted that monitoring its India website traffic provides “an opportunity to influence interested customers who are actively considering” a purchase in a product category.

Amazon has said some of the data its private-brand teams use in launching products is public – such as the website’s rankings of best-selling merchandise. This is how Amazon described the system to a U.S. congressional subcommittee last year: “Like anyone else at Amazon or in the general public, members of these teams can also visit Amazon’s product detail pages to learn a product’s best seller ranking and read customer reviews and star ratings to assess whether a product is selling well in Amazon’s store.”

But seven current and former Indian sellers on Amazon.in told Reuters they can’t access internal sales data of rival brands offered on the website. Four of the sellers said they can access glance views, but only for their own products. Amazon has access to more data on sellers, including the number of product units shipped and details about customer returns, the 2016 document shows, giving it an advantage in market intelligence.

Amazon’s own use of the data to develop and promote its private-brand products “destroys the level playing field,” said one current seller, who asked to remain anonymous.

Amazon said in its statement that it “does not give preferential treatment to any seller on its marketplace.” The company also said it “identifies selection gaps based on customer preferences at an aggregate level only and shares this information with all sellers.”

How to ‘replicate’ products

Once Amazon’s private-brand employees had decided which categories to enter, they reviewed sales and customer-review data on Amazon.in to identify “reference” or “benchmark” brands to “replicate,” the 2016 private-brand document showed.

In the case of Solimo, the 2016 document stated that to ensure the brand’s goods meet “customer requirements in terms of performance we identify and replicate these reference products.” Amazon had no comment on the Solimo project.

Amazon’s strategy also called for manufacturers of its private-brand products to use other companies’ goods as models to develop samples for pre-production testing.

Among the brands Amazon employees planned to “benchmark,” the document states, were American ones – “Old Navy/GAP” men’s shirts. The document does not indicate whether the employees followed through.

Gap Inc, which owns the Old Navy and Gap brands, declined to comment.

The rival products Amazon targeted also included other brands popular in India. For pots and pans, a “reference brand” was Prestige, one of India’s largest kitchen-equipment companies. For men’s shirts, the benchmarks included Peter England and Louis Philippe, both made in India by conglomerate Aditya Birla Group.

Amazon also targeted John Players, a menswear brand then owned by Indian conglomerate ITC Ltd.

Chandru Kalro, managing director of TTK Prestige, which owns the Prestige brand in India, told Reuters, “We have no knowledge of us being a ‘reference brand’ for Amazon and we don’t know what it means to be an Amazon reference brand.”

Aditya Birla Group declined to comment. ITC did not respond to a request for comment.

An Amazon document listed brands of conglomerates led by two prominent Indian business figures as among those the U.S. e-commerce firm was targeting for copying. From left: Kumar Mangalam Birla and Kishore Biyani.

“We concluded to follow the measurements of Business Shirt of John Miller for Xessentia because of wide acceptance with our customer base.”

An explanation in an internal Amazon document of why the company decided to copy John Miller shirts

In early 2016, Amazon private-brand employees were internally noting the success of Xessentia, a clothing brand they had launched on Amazon.in in partnership with a seller. The seller owned the brand; Amazon designed the products.

Sales of Xessentia men’s business shirts were surging, and in the first quarter of 2016 had become that category’s second-most popular brand on the India site after the American brand Arrow, licensed to the Indian company Arvind Fashions. To create the Xessentia line, Amazon had used Louis Philippe as the benchmark brand, because it was “premium and popular,” the 2016 document said.

But something was amiss: About one in every 12 Xessentia shirts was being returned in the first quarter of 2016 for sizing issues. More than 350 were returned because customers complained they were too small.

Amazon employees conducted a “deep dive,” the 2016 document reports, by poring over a year’s worth of data from Amazon.in, including customer complaints and return numbers for Xessentia, Arrow and seven other brands. They found that a brand of men’s business shirts in India called John Miller had far outsold Xessentia shirts, despite carrying “a similar” average selling price. John Miller also had about half the rate of customer returns for “quality issues.”

This table, from a 2016 document, shows the internal data Amazon accessed when deciding which men’s business shirt to use as the “benchmark” for copying. Employees took into account several metrics, including number of shirts sold, percentage of customer returns due to quality issues and average selling price (ASP), in choosing to copy the John Miller brand.

The upshot: “Our learning is that our customer is different from the Louis Philippe customer and doesn’t prefer this fit,” the 2016 document stated. “We concluded to follow the measurements of Business Shirt of John Miller for Xessentia because of wide acceptance with our customer base.”

So Amazon revised the fit of Xessentia shirts to copy John Miller’s sizing, matching it down to the neck, shoulder, armhole, sleeve and waist dimensions.

This table, from the 2016 document, shows how Amazon changed the measurements of men's shirts it had designed for a brand called Xessentia because many customers returned them saying they were too small. Amazon had been using the measurements of an Indian brand called Louis Philippe for the shirts, but decided to change to John Miller, another Indian brand, in response to the complaints. The "variance" refers to the difference in measurements between the old Xessentia shirts, based on the Louis Philippe brand, and the new Xessentia shirts, based on the John Miller brand. (Note: The table misspells the Louis Philippe brand name.)

Amazon didn’t reply to questions about its Xessentia project. Arvind Fashions declined to comment.

John Miller is a brand owned by retail mogul Kishore Biyani. Amazon and Biyani later became business partners in India, but had a falling out. Amazon is now embroiled in a legal battle with Biyani over the proposed sale of his retail assets to Reliance, which is run by billionaire Mukesh Ambani, considered India’s wealthiest man. Ambani and Amazon are fierce rivals, with the Indian magnate in recent years launching his own e-commerce business.

A spokesperson for Biyani’s Future Group said the company was “shocked and surprised” to learn that Amazon was using Indian brands to build its own. “They are in a powerful position of being both an online marketplace operator and a seller and collector of data,” the spokesperson said in a statement to Reuters. “This is leading to misuse of consumer and seller data giving them the power to kill Indian entrepreneurs and their brands.”

After the launch of Xessentia, Amazon introduced a brand of U.S.-and-European-style clothes in India called Symbol.

“For every product line identified for launch, we will identify an optimal reference brand based on customer reviews and size of business,” state the plans for Symbol and another private brand. “The replication of the ‘Fit’ of this reference brand will be a crucial step in our product development process.”

The Symbol brand is still going strong. On Oct. 11, 11 of the top 25 best-selling men’s formal shirts on Amazon.in carried the Symbol brand name.

‘Systematic campaign of copying’

Amazon has been repeatedly accused in the United States of copying product designs.

In 2018, home-goods retailer Williams-Sonoma Inc filed a federal lawsuit against Amazon, accusing the e-commerce giant of copying its proprietary designs for chairs, lamps and other products for an Amazon private brand called Rivet.

“Amazon has engaged in a systematic campaign of copying,” the lawsuit alleged. The exhibits filed in the case included pictures of similar-looking products from Amazon and a Williams-Sonoma brand. In court filings, Amazon denied the copying allegations. Last year, the two parties reached a confidential settlement. Both didn’t comment about the case for this story.

Joey Zwillinger, co-founder of Allbirds Inc, a San Francisco-based maker of sustainable footwear and apparel, told Reuters that around 2016 or 2017, Amazon began inviting his company to sell its goods on the e-commerce giant’s platform. Allbirds said no.

Then, in 2019, Amazon introduced a wool-blend sneaker that closely resembled a popular Allbirds wool shoe – and sold for much less. Zwillinger said the Amazon product used cheaper material but that the design was so similar, “it’s hard to tell the difference in a silhouette.”

Two examples of alleged copying by Amazon - a chair and a coffee table - appear in exhibits filed in a U.S. federal court by home-goods retailer Williams-Sonoma Inc. The Williams-Sonoma products are on the left; Amazon’s are on the right. Last year, the two parties reached a confidential settlement.

Allbirds didn’t sue. There are always subtle differences in designs, and copycat cases can be time-consuming, Zwillinger said. But he and Allbirds’ other co-founder posted online a letter to Bezos, noting that the Amazon product was “strikingly similar to our Wool Runner” sneaker. Writing that Allbirds was “flattered at the similarities,” they offered to help Amazon use more sustainable materials in its product.

Zwillinger told Reuters that they didn’t receive a response. Amazon had no comment.

In India, Amazon didn’t just knock off products for itself. One of its employees suggested that another seller consider replicating a company’s products.

In 2020, Amazon India employee Aditi Singh advised Mohit Anand, who was then selling products on Amazon.in, on how he could succeed on the platform. She suggested that Anand “replicate” a furniture company’s products, according to a recording of a phone call reviewed by Reuters.

Noting that an Indian furniture brand called DeckUp was selling well on Amazon.in, Singh suggested that if Anand were to “replicate DeckUp’s range” and charge lower prices, then the products “will sell very well” on Amazon.in. Anand told Reuters that he didn’t take the advice.

Utheja Pulluri, DeckUp's founder and a former Amazon India employee, said that as long as the e-commerce giant was “not sharing confidential data on us, I don’t have a problem … This appears to be business guidance, a generic insight.”

Singh referred a Reuters request for comment to Amazon’s public relations team. The company didn’t comment.

‘Search seeding’ and ‘sparkles’

How high products rank when customers search the Amazon website is critical to online sellers’ success. An internal document in 2017 noted that more than half of users’ clicks on search results are for the products listed in the top eight.

Amazon has said its search algorithms don’t favor its private-brand products. Asked during the 2019 congressional hearing whether Amazon alters algorithms to direct consumers to its own goods, associate general counsel Nate Sutton replied: “The algorithms are optimized to predict what customers want to buy regardless of the seller.”

Yet the internal Amazon documents show that in India, Amazon manipulated search results to favor its own products.

The company used a technique called “search seeding” to boost the rankings of its AmazonBasics and Solimo brand goods, according to the 2016 private-brand report. Referring to Amazon’s product codes – known as ASINs, or Amazon Standard Identification Numbers – the report stated: “We used search seeding for newly launched ASINs to ensure that they feature in the first 2 or three ASINs in search results.”

The document also referred to another technique that gave Amazon an edge: “search sparkles.”

“We have aggressively used search sparkles on PC, Mobile and App to specifically promote Solimo products on relevant customer searches from ‘All Product Search’ and Category search,” the 2016 private-brand report said.

According to one current and two former Amazon employees, search seeding and search sparkles are digital techniques the company has used to direct customers to certain products.

Two of the sources said Amazon has used seeding to alter search rankings to boost products, such as new ones, whose sales are so low that there’s insufficient data for the company’s technology to rank them. Sparkles are banners that Amazon has planted above search results to direct customers to certain products the company wants to promote.

While such tools have legitimate uses to assist online shoppers find certain hot new products, using search seeding to boost the rankings of Amazon’s own products hurts rival merchants’ sales on the platform, one of the former employees said.

Search seeding and sparkles were both used to promote AmazonBasics products on the company’s India platform, the 2016 document reveals. Within months of the launch of AmazonBasics in India in 2015, four of its products were “#1 Bestsellers in their category week after week,” the 2016 document said. It added that “promos” were placed on “detail pages of competitor products to direct traffic to AmazonBasics brands products.”

Piyush Tulsian, a New Delhi retailer of computer accessories, told Reuters he used to earn about $1,500 a month selling mouse pads on Amazon.in made by Logitech International, which is headquartered in Switzerland.

Piyush Tulsian, a retailer who sells products on Amazon.in, said his sales of Logitech mouse pads dropped after customers who viewed details about the mouse pad were shown an ad for a cheaper product being sold under an Amazon brand. Tulsian is seen here in his New Delhi shop last month. REUTERS/Anushree Fadnavis

Then, about two years ago, he said he started noticing that his sales were dropping. He said he discovered that customers who viewed details about the Logitech mouse pad he was selling for $21 were shown an advertisement for an AmazonBasics pad that was about 60% cheaper. The Logitech product also began appearing much lower in search results, he said.

“It’s very frustrating,” said Tulsian, who is 36. “They are mistreating sellers.” He said he stopped selling the Logitech mouse pad on Amazon.in and was stuck with 150 unsold ones.

Amazon had no comment. Logitech declined to comment.

Controversy over the business practices of foreign e-commerce companies in India has heated up in recent months. In June, the government proposed draft regulations that threaten to impose further restrictions on Amazon and other e-commerce companies, including local players, after receiving complaints by consumers and traders of unfair business practices. The proposed rules could restrict Amazon and others from selling their own private-brand products in India.

Later that month, India’s commerce minister accused large e-commerce companies of flouting local laws and said he had observed “a little bit of arrogance,” particularly by American ones. The other big platform in India is Flipkart, owned by American retail giant Walmart Inc. Flipkart didn’t comment.

In early July, Amazon announced it would introduce to India a program it already offers businesses elsewhere. Called the “Intellectual Property Accelerator” program, it gives certain sellers on Amazon.in access to services provided by intellectual-property experts and law firms.

One aim, Amazon said, is to help sellers “protect their brands.”

A worker sorts packages for delivery in a van outside an Amazon facility in the Indian city of Ahmedabad earlier this year. REUTERS/Amit Dave

Additional reporting by Jeffrey Dastin in San Francisco

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