Mattioli exposes Amazon's aggressive, anti-competitive tactics in new book

Amazon has historically been a black box, and people don't understand how it competes and how it seems to always win, Dana Mattioli, a veteran Wall Street Journal reporter and author of a new book on the giant online retailer, said Wednesday, May 2, following a National Press Club Headliners Book Rap. 

She said she wrote "The Everything War: Amazon's Ruthless Quest to Own the World and Remake Corporate Power" to shine a light on Amazon's aggressive posture toward businesses that sell products on its site. 

"I hope the book really lifts the veil on Amazon's anti-competitive practices and also how it has its thumb on the scale," said Mattioli, who has covered Amazon for years. 

Amazon's tactics can be devastating for businesses, Mattioli said during the Club event. She explained that firms willingly share their top-level insights with Amazon, only to be taken advantage of. 

"[Companies] make their top people available to Amazon, senior managers for interviews, and the same thing would happen every time," Mattioli said. "Amazon would…take all the information [and] ghost them. Stop returning emails. Then 10 months later, or a year later, they've announced the same product." 

Any business owner wanting to meet with Amazon must sign a "residual clause" in a non-disclosure agreement, Mattioli said. "It says, almost verbatim, anything retained in the memory of an Amazon executive in these meetings could be used without legal penalty."

Businesses operating on the Amazon platform can experience severe limits on financial gains due to the significant cut Amazon takes from sales -- 45% of every dollar. In her book, Mattioli cites an example of a seller who earned $10 million in revenue, but after paying for advertising and giving Amazon its take plus overhead, the profit turned out to be $30,000.

There’s little oversight of what Amazon sells, Mattioli said.

"Amazon cannot even begin to police the stuff coming in and out of its warehouses or its [Fulfilment By Amazon] program, and as a result, there's so much dangerous product being sold," she said. "They were selling carbon monoxide detectors that [didn't] detect carbon monoxide; children's toys with lead in them; and baby hoodies with strings around the neck” that are banned in the United States because of the strangulation hazard.

She said leaders of Amazon's Marketplace shared with her their fear of making purchases on the platform. “We don't shop on it... we would never buy Christmas lights, [because we] don't want it to set [our] house on fire," the executives said. 

Amazon is facing an antitrust lawsuit from the Federal Trade Commission, which has accused it of imposing higher prices on American consumers and charging exorbitant fees to many online merchants who currently have no choice but to rely on Amazon to stay in business. The regulator also claimed Amazon's search results are biased to prefer Amazon's products over those that it knows are of higher quality. 

"It's Amazon's world, and we're living in it," Mattioli said.