Despite the fact that over a month has passed since Amazon announced that it would be purchasing Whole Foods for $13.4 billion, lawmakers are still worried about the changes this potential move could bring.

Rep. David Cicilline (D-RI) has requested a subcomittee hearing on the purchase in the U.S. House of Representative due to concerns over depressed wages and stifled innovation.

“Amazon’s proposed purchase of Whole Foods could impact neighborhood grocery stores and hardworking consumers across America,” Cicilline, the top Democrat on the House of Representatives Judiciary Committee’s antitrust panel, said in a statement released Friday. “Congress has a responsibility to fully scrutinize this merger before it goes ahead.”

Cicilline basically cites Amazon’s movement toward automation as to why this merger may be dangerous. He adds that the markets indicated initial fears that Whole Foods would run away with all of the market share in the U.S. grocery market. The day the purchase was announced, Target shares dropped by 9 percent, WalMart dropped 5 percent, and Kroger dropped 13 percent. It is worth noting, however, that Whole Foods only controls 1.7 percent of the current market.

The Federal Trade Commission (FTC) is currently reviewing the proposed merger, meaning there still is time for the deal to fall apart–or for Washington officials to step in and stop it. But precedent indicates that that may not be likely.

Lina Khan, an associate research scholar with Yale Law School, published a lengthy analysis of Amazon’s business practices and how it has avoided antitrust issues. One of her key arguments is that since the Reagan Administration, antitrust enforcement has focused on the final price of goods for consumers. Before that, regulators would analyze the structure of a market a merger was entering into and check to see how possible it was for new competitors to enter. Since Amazon is quite good at providing lower prices to its customers, the FTC has turned a blind eye to the company’s growth.

This may lead some to believe that the Amazon-Whole Foods merger will become another example of this trend, as both companies have presented evidence that price increases are unlikely. However, Cicilline is working to change what he believes is the increasingly narrow mentality of the subcommittee. He said in his statement:

Although the role of employment and inequality in antitrust enforcement has declined in recent decades, the Subcommittee should have an active oversight role in determining whether this trend serves the public interest, is faithful to the legislative intent of the antitrust laws, or whether additional enforcement is warranted to reverse the harmful effects of consolidation on workers and labor inequality.

Cicilline is not the first lawmaker to raise concerns with the merger. Rep. Ro Khanna (D-CA) called on the Department of Justice and FTC to review the merger–which he said could impact jobs and wages–the day the merger was announced.

“We need to reorient antitrust policy to factor in the harm that economic concentration causes for American workers,” he told Vice News. “We also need to be mindful that concentrated industries stifle innovation.”

Gabe Fernandez

Gabe is an editorial intern at Law Street. He is a Peruvian-American Senior at the University of Maryland pursuing a double degree in Multiplatform Journalism and Marketing. In his free time, he can be found photographing concerts, running around the city, and supporting Manchester United. Contact Gabe at Staff@LawStreetMedia.com.

The post Concerns Continue to Grow Over Amazon’s Whole Foods Purchase appeared first on Law Street.

Last year, JD.com, China’s version of Amazon, got its business off the ground–literally. The company launched a fleet of delivery drones that have been bringing packages to buyers within minutes. In one province, the company just received government approval to use drone delivery for packages weighing more than a ton, according to Vox. This form of delivery has been especially effective for JD.com in delivering packages to rural areas. The drones are fully automated and follow set paths. Rather than delivering straight to the customer’s door, they drop orders at a specific site in rural villages, where locally-based contractors then deliver the packages.

Faster delivery that reaches more people–it seems like a logical step for American companies. So why aren’t delivery drones flooding our skies? Read on to find out.

What’s Stopping the Drones?

The idea of drone delivery isn’t a new concept to American business leaders. Back in 2013, Amazon chief executive Jeff Bezos discussed the possibility of drone delivery in a “60 Minutes” interview. Much of his segment is already dated–Bezos talked about the very beginnings of developing original television programming for Amazon Studios–however, he said drone delivery was only a few years away. American customers are still waiting on the first air delivery and Prime Air’s website does not yet list an official launch date for the service to be available to buyers.

“We will deploy when and where we have the regulatory support needed to safely realize our vision,” the website reads. “We’re excited about this technology and one day using it to deliver packages to customers around the world in 30 minutes or less.”

The biggest barrier is government regulation. The Federal Aviation Administration has historically been hazy on drone policy. The department has come under fire for not establishing clear privacy or safety laws for drones, also known as unmanned aerial vehicles.

In 2015, the FAA required drone users to register in a federal database. Last month, a federal appeals court in Washington, D.C. overturned that regulation, ruling that it did not have legal standing over those flying drones for recreational, not commercial, purposes.

With regard to commercial drone usage, the FAA’s guidelines, set last June, do not permit aerial package delivery. According to the regulations, drones used for commercial purposes must remain in the line of sight of the pilot. Tech companies and others interested in commercial drone usage are lobbying the FAA to change those regulations. Amazon itself has several lobbyists working on this goal.

Going Global

To get around these federal roadblocks, Amazon has moved across the pond to test its delivery. Last summer, the company gained approval from the U.K. to test drones in the country’s airspace. Just a few months later, in a private trial, the company made its first drone delivery–an Amazon FireStick and a package of popcorn–to a customer in Cambridge.

In New Zealand, Domino’s is experimenting with drone delivery pizzas. And an American startup based in California is using the vehicles to transport medical supplies to Rwanda. Earlier this month, Amazon announced the creation of a drone testing center in Paris, which will work with the centers in the U.S., U.K., Austria, and Israel.

The delay in drone use in the U.S. is frustrating–to consumers, companies, and drone-use advocates. Timothy Carone, a professor at the University of Notre Dame and expert on automation (he co-authored the book “Future Automation–Changes to Lives and Businesses”), told Wired in December that it is “unfortunate, almost tragic” that Amazon is piloting drone delivery in the U.K., rather than in the U.S.

“The FAA, like most government agencies, works on times scales that are increasingly slower than the evolution of new businesses and technologies,” Carone said. “Soon it will make decisions on technologies that are already outdated.”

Since then, Prime Air has only made one delivery on U.S. soil–at an invite-only tech conference in March–and the delivery was pre-approved by the FAA. The convenience store 7-Eleven has had mild success in delivering packages via drone, but all of its trials have been within the pilot’s line of site, to customers within a mile of the Reno, Nevada store.

Other Concerns

Beyond the regulatory barriers, there are a multitude of other concerns and problems that Amazon and other companies will have to address before drone delivery becomes commonplace in the U.S.

Air safety and environmental concerns are top priority. To ensure that drones can coexist peacefully with other aircrafts, avoid crashing into tall buildings and construction cranes, and aren’t hazardous to birds, trees, or bodies of water, companies that wish to use drones will have to work closely with air traffic control, even developing new systems. Amazon has said that data from its trials in the U.K. are helping to develop and improve air traffic control systems that deal with drones in both the U.S., through NASA, and in the U.K. And there is, of course, the very real fear that drone deliveries will wipe out thousands of driving and packaging jobs.

On top of these challenges, leadership at Prime Air has seen some turnover. The co-founder of the project, Daniel Buchmueller, quietly left Amazon at the end of last year, at what seems to be a pivotal time in the company’s pursuit of aerial delivery.

What’s Next For Drone Policy?

President Donald Trump’s actions on drones have largely dealt with warfare. In a controversial decision in March, Trump handed authority to launch drone strikes to the CIA. Under President Barack Obama, only the military had the power to launch strikes, making the operations more transparent since the Pentagon has to report on all airstrikes.

The new presidential administration has had little to say on commercial and recreational drone usage. But last week, the White House backed proposed legislation that would allow the government to track and destroy drones flying over U.S. soil that it deems a security threat. This is a security and privacy issue–the administration is concerned about the ability of terrorists to use drones to carry weapons or conduct surveillance.

The draft document warns that government activities, like wildland firefighting, search and rescue operations, and border control, could be threatened by the commercial availability of unmanned aircraft systems. According to the document, drones are difficult to detect and monitor, but the technology available to do so may not be currently legal for such purposes.

“Some of the most promising technical countermeasures for detecting and mitigating [unmanned aircraft systems] may be construed to be illegal under certain laws that were passed when UAS were unforeseen,” the document reads. “These laws include statutes governing electronic communications, access to protected computers, and interference with civil aircraft.”

It is unclear how legislation like this, should it pass, would affect the ability of companies like Amazon to use drones for delivery.

“An Emerging Technology”

Elaine Chao, the new transportation secretary, spoke briefly on drones for commercial use during her confirmation hearings. She has not proposed any changes to policy as of yet, but emphasized the importance of safety regulations in any drone laws.

“Safety will continue to be the primary objective,” Chao said. “Regulatory decisions should be rooted in analysis derived from sound science and data.”

“Farewell Reception Honoring Hudson Distinguished Fellow and Secretary of Transportation-designate Elaine L. Chao” Courtesy of Hudson Institute: License (CC BY 2.0)

Chao also acknowledged that the government’s “failure to pace with emerging technologies” is causing U.S. transport to fall behind other countries.

“It’s an emerging technology, there are those who see the benefits of commercializing them for various uses, it’s transforming the way we work, the way we do commerce,” she said. “There are also those who are very concerned about privacy issues, security issues, and again for going forward with an emerging technology as important as this with such vast implications for our future, I think we need to talk about it, we need to have again a national consensus for where we’re going.”

Conclusion

With JD.com’s success with drone delivery, and Amazon’s fourth international development center opening soon, everyone from consumers to CEOs are anxiously awaiting improvements to federal policy that will make drone delivery a reality for Americans. Some say the key lies in redefining drones so that they are not considered aircrafts and subject to the same regulations as jetliners.

Even without delivery, the presence of drones themselves is only going to become more prominent as the months go on. The FAA estimated earlier this year that the number of drones used for recreational purposes will increase from 1.1 million in 2016 to more than 3.5 million over the next five years. For commercial drones, the fleet could grow from 42,000 in 2016 to as many as 1.6 million by the end of 2021, depending on how quickly regulations catch up.

With numbers like that, it’s understandable that American consumers are getting antsy waiting for drone-dropped packages to appear on their doorsteps.

Avery Anapol

Avery Anapol is a blogger and freelancer for Law Street Media. She holds a BA in journalism and mass communication from the George Washington University. When she’s not writing, Avery enjoys traveling, reading fiction, cooking, and waking up early. Contact Avery at Staff@LawStreetMedia.com.

The post Where Are the Drones?: How Red Tape is Slowing Down Drone Delivery appeared first on Law Street.

Major internet companies are joining a day of action to protest the Federal Communication Commission and its planned decision to eliminate Obama-era net neutrality regulations.

Amazon, Etsy, and Kickstarter are just some of the 52 companies and organizations that are participating in this internet-wide event on July 12. It’s being hosted by advocacy groups Fight for the Future, Freepress Action Fund, and Demand Progress. Other notable participants include Vimeo, Reddit, and Mozilla, creator of the Firefox Web Browser.

Not much information is available on what will exactly happen on the day of the protest on the event’s site, only that more details will be sent out to participants who join the mailing list as the day approaches. However, the website does promise to “make it easy for your followers / visitors to take action” in the protest.

Net neutrality is the idea that internet providers should treat all online traffic equally. Current FCC policy (Title II of the Telecommunications Act) regulates broadband providers to ensure that indiscriminate services are being provided to the public at large. In other words, the FCC is currently making sure that your Netflix streams are not being slowed down because your provider has a deal with Hulu.

President Donald Trump’s newly appointed FCC chair, Ajit Pai, promised last year to take a “weed whacker” to the internet regulations set up during Obama Administration. Pai, along with the rest of the FCC’s Republican majority, said in the agency’s open meeting that the current rules stifle creativity and prevent internet providers from trying innovative ways to make money in a digital world.

Member companies of the Internet and Television Association have stated that they support the idea of net neutrality, but would  prefer the federal government not be the body that enforces it. But companies that are actually based online have a much different opinion on the matter.

“Net neutrality made it possible for Vimeo, along with countless other startups, to innovate and thrive,” said Michael Cheah, general counsel of Vimeo, in a statement. “The FCC’s proposed rollback of the 2015 open internet rules threatens to impede that innovation and allow a handful of incumbent ISPs to determine winners and losers.”

This is not the first time internet companies have chosen to stand up to threats against net neutrality. Google, Netflix, and Twitter protested in similar fashion back in 2014 in support of reclassifying broadband services under Title II regulations. Since then, the rules have faced many challenges in court but have yet to be overturned.

As for Pai, this will be the second large-scale act of protest his commission will face this year. Comedian, and host of “Last Week Tonight,” John Oliver encouraged his viewers in May to comment on the FCC proposal that would dismantle Title II regulations. The resulting traffic crashed the commission’s site.

Gabe Fernandez

Gabe is an editorial intern at Law Street. He is a Peruvian-American Senior at the University of Maryland pursuing a double degree in Multiplatform Journalism and Marketing. In his free time, he can be found photographing concerts, running around the city, and supporting Manchester United. Contact Gabe at Staff@LawStreetMedia.com.

The post Amazon, Etsy, and Kickstarter Headline Net Neutrality Protest appeared first on Law Street.

Amazon says it will let a homeless shelter move into one of its new buildings in Seattle once the construction is completed. The company initially allowed the shelter to temporarily move into a motel on one of its properties, but now the retail giant proposed a long-term solution.

The original deal was for the organization, Mary’s Place, to stay in the motel until it was time to tear it down and start construction on the new building. But in a generous arrangement that was announced on Wednesday, Amazon said it will make room for Mary’s Place in one of its new buildings and that the solution will be “permanent.”

This is a huge deal for the nonprofit, which turns unused buildings into temporary shelters and has had to move around frequently. The new space will consist of 47,000 square feet and will be able to house 220 people. Amazon will pay for the design and construction of the building. It will also pay all utilities, and let Mary’s Place stay there rent-free.

What the homeless shelter in Amazon’s building will look like. Occupies half of shorter Amazon building on right https://t.co/B5JHJopYxD pic.twitter.com/nZEPUKWDS5

— Nick Wingfield (@nickwingfield) May 10, 2017

Amazon itself has faced criticism for how it treats its warehouse workers due to the seasonality of its business, with the sales volume increasing significantly around the holidays. This means Amazon employs a large number of people in the last quarter of the year. The pay for short-term workers is low, starting at around $10 an hour, and there is no job security or benefits. After the holidays, seasonal workers lose their jobs and can’t apply for an Amazon position again until after a year.

For people struggling to make ends meet, or those who live in a homeless shelter, seasonal employment is a difficult problem. Often, when they get a job, they move out of the shelter and try to find a more permanent solution too quickly. Many run out of money when they are let go from the temporary job and have to go back. It’s hard to break the cycle of homelessness.

Seattle has also had a particularly bad homelessness problem. In 2015, the situation became so bad that the mayor declared a state of emergency in the city. That year, more than 45 people died on the streets, and almost 3,000 children attending public schools were homeless. Last year, the number of homeless people in the area exceeded 10,000, of which about 4,500 lived on the streets, according to numbers from the Seattle/King County Coalition on Homelessness.

The crisis has been blamed on the heroin epidemic, job losses after the Great Recession, and inadequate means to treat people with mental illnesses. The city also receives less money for affordable housing from the federal government than in previous years. Many people sleep in tents along the road or below highway overpasses.

The people working at Mary’s Place are relieved to finally have a permanent spot. “I see it as this huge gift because everywhere we go, we end up leaving,” said Marty Hartman, executive director of the shelter. Amazon’s vice president for global real estate and facilities, John Schoettler, said that this is an investment in the neighborhood. Amazon also has a bigger responsibility than before; nowadays it has 30,000 employees in Seattle, which makes it the biggest private employer in the city.

Emma Von Zeipel

Emma Von Zeipel is a staff writer at Law Street Media. She is originally from one of the islands of Stockholm, Sweden. After working for Democratic Voice of Burma in Thailand, she ended up in New York City. She has a BA in journalism from Stockholm University and is passionate about human rights, good books, horses, and European chocolate. Contact Emma at EVonZeipel@LawStreetMedia.com.

The post Amazon’s New Building in Seattle will Include a Homeless Shelter appeared first on Law Street.

“Alexa, is your speech protected by the First Amendment?”

Amazon says yes, specifically regarding a murder trial in which authorities are trying to access recordings from one of its devices owned by the defendant.

The case involves an Arkansas man named James Andrew Bates, who police suspect murdered his friend Victor Collins after Collins was found dead in Bates’ hot tub in 2015. They obtained a search warrant for 48 hours of audio recorded by Bates’ Amazon Echo speaker around the time of Collins’ death.

Though Amazon has provided authorities with Bates’ subscriber information, they are challenging the warrant for the Echo data on constitutional grounds.

An Amazon Echo is a cylindrical speaker that can be linked to an artificially intelligent personal assistant called Alexa, whose voice plays over the speaker. Similar to how Siri functions, when a user activates Alexa by saying its name (or another “wake word”), they can ask it to answer questions, play music, send messages, or order food delivery.

Amazon first released the Echo in 2014, but the gadget has become more popular in the past year, topping the list of holiday season best-sellers and appearing in the company’s first-ever Super Bowl commercial in 2016.

In a 91-page memorandum to an Arkansas circuit court seeking to quash the warrant, the company’s lawyers wrote that both a user’s requests to Alexa and its response are protected by the First Amendment, and that handing over this information to the government would violate its customers’ privacy.

Citing the Supreme Court case Riley v. California, which determined that digital information on a cell phone could not be seized without a warrant, the legal team argued:

Once the Echo device detects the wake word, the Alexa Voice Service endeavors to respond to any ensuing voice communications detected in the user’s home. Accordingly, searching Alexa’s recordings is not the same as searching a drawer, a pocket, or a glove compartment. Like cell phones, such modern ‘smart’ electronic devices contain a multitude of data that can ‘reveal much more in combination than any isolated record,’ allowing those with access to it to reconstruct ‘[t]he sum of an individual’s private life.’ Riley v. California, 134 S. Ct. 2473, 2489 (2014).

Amazon added that the prosecutors should have to show a “compelling need” for the recordings, meaning that they would not be able to find the information they need elsewhere, and that they should have to prove that the recordings are necessary to the investigation.

The case reflects a growing trend of law enforcement clashing with technology giants. Following the 2015 San Bernardino attacks, the FBI ordered Apple to create a software that would allow it to uncover encrypted information on one of the shooter’s phones. Apple fought back with the assertion that providing the government with the key to one phone would endanger the security of all iPhones. Furthermore, the company said that forcing its engineers to write code for such a software would be classified as compelled speech, a violation of the First Amendment. Ultimately, the FBI found a third party to unlock the phone for them.

Victoria Sheridan

Victoria is an editorial intern at Law Street. She is a senior journalism major and French minor at George Washington University. She’s also an editor at GW’s student newspaper, The Hatchet. In her free time, she is either traveling or planning her next trip abroad. Contact Victoria at VSheridan@LawStreetMedia.com.

The post Are Your Conversations with Alexa Protected by the First Amendment? appeared first on Law Street.

Leaders of tech giants are finding ways to oppose President Donald Trump’s ban on immigrants from Muslim-majority countries, which could hurt their employees and potential new hires.

Apple CEO Tim Cook said he would consider taking legal action against the order, while the heads of other companies have pledged millions of dollars to the American Civil Liberties Union (ACLU).

According to the Wall Street Journal, the ban affects hundreds of Apple employees. Cook told the Journal:

More than any country in the world, this country is strong because of our immigrant background and our capacity and ability as people to welcome people from all kinds of  backgrounds. That’s what makes us special. We ought to pause and really think deeply through that.

On January 27, Trump signed the executive order blocking citizens of Iran, Iraq, Libya, Somalia, Sudan, and Syria from entering the United States for at least 90 days (though the ban could be expanded), citing concerns over foreign terrorism. The measure also prevents refugees from being admitted into the country for four months.

While Cook has not specified exactly what type of action Apple would take, Amazon’s CEO Jeff Bezos has already taken to court to condemn the ban. The company submitted a sworn statement supporting the Washington state attorney general, who filed a lawsuit against Trump’s order. Amazon employs nearly 50 people born in one of the seven countries, and is currently offering jobs to non-U.S. citizens, some of whom were born in Iran.

Meanwhile, Twitter’s CEO Jack Dorsey and Chairman Omid Kordestani plan to donate $1.59 million to the ACLU, respectively matching $530,000 that Twitter employees raised for the organization.

The Executive Order's humanitarian and economic impact is real and upsetting. We benefit from what refugees and immigrants bring to the U.S. https://t.co/HdwVGzIECt

— jack (@jack) January 28, 2017

The ACLU sued Trump on January 28 on behalf of two men from Iraq – one of whom is a former engineer and interpreter for the U.S. government – who were detained at JFK International Airport in New York.

The taxi service app Lyft announced support for the ACLU as well, promising to donate $1 million over the next four years. Lyft’s primary competitor, Uber, faced backlash when it continued to pick up passengers from JFK during protests – which some saw as a move to profit from the situation. Uber responded to the complaints by calling the ban “unjust” and setting up a $3 million legal defense fund for its drivers impacted by the ban.

3/ We are donating $1,000,000 over the next four years to the ACLU to defend our constitution. https://t.co/0umGOlkhSx

— logangreen (@logangreen) January 29, 2017

Google cofounder Sergey Brin at SFO protest: "I'm here because I'm a refugee." (Photo from Matt Kang/Forbes) pic.twitter.com/GwhsSwDPLT

— Ryan Mac (@RMac18) January 29, 2017

The blanket entry ban on citizens from certain primarily Muslim countries is not the best way to address the country’s challenges

— Elon Musk (@elonmusk) January 29, 2017

Executives and founders of companies like Facebook, Google, Microsoft, and Tesla have also released statements criticizing the order.

Victoria Sheridan

Victoria is an editorial intern at Law Street. She is a senior journalism major and French minor at George Washington University. She’s also an editor at GW’s student newspaper, The Hatchet. In her free time, she is either traveling or planning her next trip abroad. Contact Victoria at VSheridan@LawStreetMedia.com.

The post Technology Companies Rally Against Immigration Ban appeared first on Law Street.

It’s the day before New Year’s Eve, and 2016 is about to be officially over. If you’re happy to see it go, check out this parody horror movie trailer someone made about the past year. This is the last RantCrush of 2016 but we’ll see you again on January 3, 2017. Happy New Year! Welcome to RantCrush Top 5, where we take you through today’s top five controversial stories in the world of law and policy. Who’s ranting and raving right now? Check it out below:

The U.S.-Russia Relationship Status: It’s Complicated

President Barack Obama was not happy when it became clear that Russia had in fact tampered with the U.S. election. Yesterday afternoon, he ordered 35 Russian diplomats, residing in Washington and San Francisco, to leave the country. He also imposed sanctions on Russia and closed two Russian compounds in New York and Maryland. These actions were reportedly part of a series of consequences for the Russian election hacking and interference. But U.S. officials also blamed Russian harassment of American diplomats and officials in Moscow.

“The actions would amount to the strongest American response ever taken to a state-sponsored cyberattack.” https://t.co/TI9P1G7quj

— Teddy Schleifer (@teddyschleifer) December 29, 2016

Then came reports that Russia would reciprocate by expelling the same number of American diplomats. But only hours after that proclamation, President Vladimir Putin said that he wouldn’t expel any American diplomats, which was a surprising announcement considering the diplomatic tradition of reciprocal punishment. He said that he wants to restore the Russian-American relationship once President-elect Donald Trump takes power. It remains to be seen what he actually means by that.

Emma Von Zeipel

Emma Von Zeipel is a staff writer at Law Street Media. She is originally from one of the islands of Stockholm, Sweden. After working for Democratic Voice of Burma in Thailand, she ended up in New York City. She has a BA in journalism from Stockholm University and is passionate about human rights, good books, horses, and European chocolate. Contact Emma at EVonZeipel@LawStreetMedia.com.

The post RantCrush Top 5: December 30, 2016 appeared first on Law Street.

Hey everyone! If you feel a little down because of all the celebrity deaths at the end of 2016, take a much-needed break and enjoy today’s RantCrush. Read through our rants of the day and end on a funny note with a fantastic parody video featuring a singing Barack Obama. Welcome to RantCrush Top 5, where we take you through today’s top five controversial stories in the world of law and policy. Who’s ranting and raving right now? Check it out below:

Police Officers Believe Alexa Could Solve This Murder Case

A November 2015 case that involved a dead man found floating in a hot tub could possibly be resolved with the help of Amazon’s Alexa. At least that’s what the police in Bentonville, Arkansas believe.

Victor Collins was found dead in James Bates’ backyard hot tub–the two worked together. Broken bottles, a black eye, and bloodstains around the tub made it seem like a clear murder case, but there was no hard evidence. But Bates had an Amazon Echo, an electronic device that reacts to the activation word “Alexa,” like Apple’s Siri. When you activate it, it starts recording and streams what you say to an online server. Police seized the device and asked Amazon to hand them the recorded information from its server. But Amazon said “no way.”

Police want to interrogate Amazon Alexa re: murder suspect. Someone..thing..is always listening now.https://t.co/9zDrx6Z56n

— Ira Flatow (@iraflatow) December 28, 2016

“Amazon will not release customer information without a valid and binding legal demand properly served on us,” a company spokeswoman said to the LA Times. The Echo only starts recording if someone says the activation word, so the chances that it would contain something of value in a murder investigation are very slim. But hey, who knows? Maybe it’s worth a try.

Emma Von Zeipel

Emma Von Zeipel is a staff writer at Law Street Media. She is originally from one of the islands of Stockholm, Sweden. After working for Democratic Voice of Burma in Thailand, she ended up in New York City. She has a BA in journalism from Stockholm University and is passionate about human rights, good books, horses, and European chocolate. Contact Emma at EVonZeipel@LawStreetMedia.com.

The post RantCrush Top 5: December 29, 2016 appeared first on Law Street.

Governor Rick “Oops” Perry Will Be Energy Secretary

This morning the Trump transition team announced that Rex Tillerson will be the new Secretary of State. But that’s not all! Trump has also picked former Texas Governor Rick Perry to lead the Energy Department. This is a little ironic, because when Perry ran for president in 2012, he mentioned three departments he wanted to get rid of during a debate; but could only name two. This gaffe became known as his “oops moment” that essentially sunk his campaign.

Perry’s mystery third department was the Department of Energy, which he is now set to lead. Just like Scott Pruitt at the EPA, Perry is a critic of the department he will head, which makes us think there are some big changes ahead.

Perry’s qualification for Dept. Energy is that he once forgot he wanted to abolish it. #nothingmatters https://t.co/IciWbpPGvd via @YouTube

— Elliott Lusztig (@ezlusztig) December 13, 2016

Perry ran against Trump during the Republican presidential primary and criticized him on the campaign trail, but later turned around and said “Donald Trump should be our guy.” Let’s see what happens next.

Emma Von Zeipel

Emma Von Zeipel is a staff writer at Law Street Media. She is originally from one of the islands of Stockholm, Sweden. After working for Democratic Voice of Burma in Thailand, she ended up in New York City. She has a BA in journalism from Stockholm University and is passionate about human rights, good books, horses, and European chocolate. Contact Emma at EVonZeipel@LawStreetMedia.com.

The post RantCrush Top 5: December 13, 2016 appeared first on Law Street.

Amazon is planning to open a line of new, futuristic grocery stores, where you can get everything you need without standing in line or checking out. No more impatiently waiting behind people with an overloaded cart, or realizing you forgot your wallet at home.

It sounds like the future, but the online retailer plans to open the first physical store in early 2017. The first will be located in downtown Seattle, but according to the company’s internal plans, it could open up 2,000 new shops across the country within the next decade.

The company showed what the stores would look like in a video released Monday.

Introducing #AmazonGo, a new kind of store with no lines and no checkout. https://t.co/WMii0bWevi pic.twitter.com/OmZdzobA5F

— Amazon (@amazon) December 5, 2016

The shopping would work through an app with the same name as the store–Amazon Go. You would scan your smartphone at a digital gate when entering the store, and then the app would detect which products you pick out and put in your bag. When leaving, the sensors at the exit would notice and the app would automatically charge your Amazon account. Amazon says the stores would use the same technologies as self-driving cars do; computer vision, sensor fusion, and deep learning. The stores would be relatively small, taking up approximately 1,800 square feet.

This seems pretty great for consumers, who would save time and effort by using the Amazon Go stores. But with all this new technology doing the work for us this kind of automation, if it becomes widespread, could lead to a lot of people losing their jobs and source of income. There are already driverless cars in development, so what will happen when that technology is good and safe enough to replace taxi drivers? Likewise, grocery store cashiers are probably not overly excited about Amazon’s new plans.

Amazon Go eliminates the need for cashiers. There are 3.4 million of them in America. https://t.co/GwTvptSjMj

— Christopher Mims (@mims) December 5, 2016

Amazon has flirted with increasing its influence in physical markets for some time now, for example by opening three IRL bookstores with two more on the way. The company also already offers grocery delivery in some major cities. The first Amazon Go store in Seattle is actually already open to Amazon employees, who are currently beta testing the technology. And if everything goes according to plan, it will open to the public early next year.

Amazon Go pic.twitter.com/Eygx2mOh2q

— Caroline McCarthy (@caro) December 5, 2016

Emma Von Zeipel

Emma Von Zeipel is a staff writer at Law Street Media. She is originally from one of the islands of Stockholm, Sweden. After working for Democratic Voice of Burma in Thailand, she ended up in New York City. She has a BA in journalism from Stockholm University and is passionate about human rights, good books, horses, and European chocolate. Contact Emma at EVonZeipel@LawStreetMedia.com.

The post Amazon Plans to Open Grocery Stores Without Checkout Lines appeared first on Law Street.

Welcome to RantCrush Top 5, where we take you through today’s top five controversial stories in the world of law and policy. Who’s ranting and raving right now? Check it out below:

So…I Guess Nike’s Stock is Up?

Executives from Boston-based sportswear company New Balance told the Wall Street Journal that they believe Donald Trump will get things moving in the right direction. Consumers reacted with fury and by setting their shoes on fire.

@SoleCollector @newbalance good to know. I made a little bonfire tonight pic.twitter.com/yOdCTbQgac

— skreetware (@milftears) November 10, 2016

Hundreds of people posted pictures of their burning shoes or of throwing them in the garbage. Some others said they would keep buying stuff from NB because the company opposes the Trans-Pacific Partnership trade agreement. But the ones who dropped their support of the brand were more visual.

@SoleCollector @newbalance pic.twitter.com/i8IdsxzMu4

— gay boots (@omaha_trash) November 10, 2016

Rant Crush

RantCrush collects the top trending topics in the law and policy world each day just for you.

The post RantCrush Top 5: November 11, 2016 appeared first on Law Street.

In August, Walmart purchased the online-only retail website Jet.com for $3 billion. Before the sale, Jet.com forecasted that it would be losing money until at least 2020, as it attempts to establish itself prior to becoming profitable. That raises the question of why the world’s largest retailer, with an online presence of its own, would decide to buy a fledgling retail site that didn’t plan on making money for several years. Read on to find the answer to that question and how it is influenced by the changing retail marketplace, where online presence is more important than brick and mortar stores and is necessary to compete against online behemoths like Amazon and Alibaba.

Walmart and Jet.com

Walmart bought Jet.com for $3 billion in cash and $300 million worth of shares for people high up in the company. Although Jet.com CEO Marc Lore will take over the online business of both retailers, they will remain separate entities. This is partly to retain Jet.com’s potential appeal to new users, such as millennials, who might view the site differently than they would Walmart. Jet.com’s business model was originally similar to its major competitors such as Amazon, which charges annual fees for membership while offering special deals and services. However, that plan was scrapped in October 2015 when Jet.com’s discounts became available to everyone at no additional cost.

The hope for many at Jet.com–including its CEO, who also founded another online retailer startup that was purchased by Amazon–is that with Walmart’s economy of scale it can ramp up sales and turn a profit sooner than expected. The company also hopes to expand beyond the United States, where it currently operates.

The video below looks at Jet.com’s initial business model and how it sought to compete with Amazon:

The Why

While Jet.com has the potential to improve Walmart’s e-commerce presence and its overall sales, why did it decide to make this move and spend $3.3 billion on a startup that is years away from making a profit? The answer is that the retail market itself is rapidly shifting. In January, Walmart announced that it will be shutting down 269 stores, including 154 in the United States. The Walmart downsizing was just a precursor to a bigger change within the retail industry. In June, another wave of major retailers, including the likes of Macy’s and J.C. Penny, announced huge layoffs of their own. In total, as many as 38,000 jobs have been lost in retail so far this year, second only to the crude oil industry.

All these layoffs point to the fact that the way Americans buy their goods is shifting from brick and mortar stores to an online marketplace. Indeed, last quarter the nationwide e-commerce market in the United States grew by 15 percent. Walmart is certainly part of this growth, as its online sales grew by 7 percent during that period but that was slower than the industry as a whole and considerably slower than competitors like Amazon. The pace of Walmart’s online growth has slowed for nine consecutive quarters while its competitors continue to post large gains.

Although Walmart managed to make $14 billion in 2015 through online sales, that was only a paltry 3 percent of its total revenue. While Walmart has made efforts to improve its own online sales–such as expanding the number of products listed and allowing merchants to provide descriptions of their goods–the move to incorporate Jet.com may make sense as it tries to keep up.

While Jet.com’s revenue doesn’t come close to the amount of money made by Walmart’s e-commerce efforts, it has grown relatively quickly with about 400,000 new customers each month. It has sustained this growth by offering lower prices than Walmart and others like Amazon, by linking the buyers directly with the sellers while not accumulating a massive warehouse of inventory. Jet.com’s different style of business and the demographics that it caters to are likely why Walmart found the company so attractive. The following video looks at why Walmart purchased Jet.com:

Competing Against Amazon (and Alibaba)

Walmart’s overall goal is to compete or at least challenge Amazon’s dominance in the American e-commerce market. While Walmart made more in total revenue, Amazon made far more in online sales, pulling in $107 billion (including the web-services component) to Walmart’s previously mentioned $14 billion. Not only did Amazon make more in total, its growth in sales increased at a far greater rate, 31 percent to Walmart’s 7 percent last quarter. Amazon’s growth was also twice as much as the industry as a whole.

Walmart has already taken shots at its online retail rival. On top of recent investments, like its purchase of Jet.com and other efforts to improve its own e-commerce presence, Walmart has also been mimicking some of Amazon’s best practices. Namely, in response to Amazon’s Prime’s free two-day shipping for members, Walmart announced its own Shipping Pass promotion. Shipping Pass provides Walmart shoppers with the option to buy free two-day shipping for a year at about half the price of an Amazon Prime membership. However, unlike Amazon, this deal does not also include a wide range of other benefits like video and music streaming.

One thing that Walmart is unlikely to copy is Amazon’s new strategy of opening physical stores. Seemingly running counter to the emerging conventional wisdom, Amazon recently opened a brick and mortar store in Seattle and plans to open another in San Diego. While the exact rationale behind this decision remains unknown, Amazon founder Jeff Bezos told the Wall Street Journal that the company is experimenting with a lot of new ideas to maximize its revenue. As of now, it looks like Amazon is alone in its decision to open additional physical stores.

International Competition

Although Amazon has established itself as the big fish in the U.S. e-commerce industry and in much of the rest of the world, an even greater threat may be emerging in China. There, a company known as Alibaba controls about 80 percent of the market. Walmart has already taken steps to counter this threat with 400 locations in China and it recently partnered with JD.com to expand its influence in the Chinese market. The accompanying video looks at Alibaba’s business model:

Alibaba is slightly less of a threat to Walmart now because it is primarily focused on China. Additionally, its first foray into the U.S. market failed. However, it does hold a stake in other American companies, namely Groupon, and at one point it even owned a stake in Jet.com. The company’s focus in the near term seems to be learning the nuances of the American market, which could make it a serious challenger in years to come.

Conclusion

Walmart’s purchase of a company that planned to lose money for at least the next four years is indicative of the changing reality of the retail industry. Namely, while retail has long been the domain of brick and mortar physical stores with Walmart leading in sales, things are changing. While physical stores still account for a large proportion of all sales, retailers continue to put an emphasis on e-commerce.

While Walmart is still one of the largest if not the outright largest retailer in the world, in the e-commerce sphere, it lags behind. When it comes to online sales, it finds itself behind the reigning heavyweight Amazon and up against other stiff competitors, such as Alibaba, in developing markets. This explains Walmart’s recent purchase of the fledgling startup, Jet.com, and partnership with other e-commerce sites operating only in China. While $3 billion may seem like a lot, if it gives Walmart an edge online it could be worth much more. But most importantly, this purchase provides more evidence that the future of the retail industry is in online sales. This purchase reflects this trend and illustrates some of the challenges that traditional companies with physical stores may have as they try to adjust.

Currently, none of these three retail titans seems to have outright control over the online market. Walmart appears to be trying to figure out how to fully tap this market like it has the traditional retail industry. Going forward, whichever company is able to most effectively harness these trends will likely be the most successful. Walmart’s purchase of Jet.com may reflect its desire to succeed in a market where it has, so far, fallen behind.

Resources

Tech Crunch: Confirmed: Walmart Buys Jet.com for $3B in cash to Fight Amazon

USA Today: List of the 154 stores Walmart is Closing

CNN Money: Layoffs in Aisle 4! Retailers are Big Job Killers

Wall Street Journal: Wal-Mart to Acquire Jet.com for $3.3 Billion in Cash, Stock

The Street: Walmart’s New Alliance to Take on Alibaba and Amazon

USA Today: Walmart vs. Amazon: Walmart offers Free Trial of 2-day Shipping Program

Wall Street Journal: Amazon Plans More Stores, Bulked-Up Prime Services

Forbes: How Alibaba is Working Toward Establishing Itself in The U.S.? 

Michael Sliwinski

Michael Sliwinski (@MoneyMike4289) is a 2011 graduate of Ohio University in Athens with a Bachelor’s in History, as well as a 2014 graduate of the University of Georgia with a Master’s in International Policy. In his free time he enjoys writing, reading, and outdoor activites, particularly basketball. Contact Michael at staff@LawStreetMedia.com.

The post What Walmart’s Purchase of Jet.com Says About the Retail Industry appeared first on Law Street.

The U.S. government issued new rules on Tuesday regarding the flying of commercial drones, opening up a ton of business opportunities. Drones–small, unmanned aircraft–can be used for taking photos, to survey damage done by natural disasters, and plenty more. But using drones for delivering packages, as e-commerce giant Amazon plans on doing, will not be possible under the new rules.

The problem for Amazon and other retailers with hopes of delivering orders via drones is the requirement that mandates the pilot to always be in the line of sight of the aircraft. In addition, drones can only fly in daylight, and can’t weigh more than 55 pounds.

DOT and FAA Finalize Rules for Small Unmanned Aircraft Systems https://t.co/yr1VUrygOf #drones #flysafe pic.twitter.com/XaUTA9rhB7

— The FAA (@FAANews) June 21, 2016

The Big Brother Aspect

The biggest issue with regulating drones has been ensuring safety and privacy. Several groups have expressed fears that they could be used for spying on people, or are simply not safe enough. The fact that they can now be as small as insects, and can use cameras with facial recognition technology, is indeed unsettling to some. “The FAA continues to ignore the top concern of Americans about the deployment of commercial drones in the United States–the need for strong privacy safeguards,” Marc Rotenberg, president of Electronic Privacy Information Center, told the Boston Globe.

Drone captures 70 tiger sharks feasting on a whale https://t.co/JGGv3F9pPa pic.twitter.com/gBrqVjmVYZ

— Drones (@drones) May 24, 2016

Despite this, some in the business sector are happy with the new rules. Michael Drobac, a lawyer for drone efforts at companies like Amazon and Google, said:

Within months you will see the incredible impact of these rules with commercial drones becoming commonplace in a variety of uses. This will show the technology is reliable, and then it becomes harder to argue against broader uses–like for delivery.

More Jobs

According to the press release from the Federal Aviation Administration, the new regulations could open up more than 100,000 new jobs within the next 10 years, and could generate more than $80 billion for the U.S. economy. U.S. Transportation Secretary Anthony Foxx said: “We are part of a new era in aviation, and the potential for unmanned aircraft will make it safer and easier to do certain jobs, gather information, and deploy disaster relief.”

Before the new rules, a piloting license was needed in order to operate a drone, but with the new rules you only need  a “remote pilot certificate,” which is attainable by passing an aeronautical knowledge test. You must be at least 16-years-old to fly a drone, and cannot fly the aircraft over other people. The new rules don’t affect hobbyists, however, so if you own a drone and want to know what is allowed, you can read the FAA’s “Fly for Fun” guidelines here.

Emma Von Zeipel

Emma Von Zeipel is a staff writer at Law Street Media. She is originally from one of the islands of Stockholm, Sweden. After working for Democratic Voice of Burma in Thailand, she ended up in New York City. She has a BA in journalism from Stockholm University and is passionate about human rights, good books, horses, and European chocolate. Contact Emma at EVonZeipel@LawStreetMedia.com.

The post FAA Issues New Rules for Commercial Drones appeared first on Law Street.

Just because an app is labeled as “free,” doesn’t mean it won’t end up costing you.

No one knows this fact better than parents who discovered Amazon was billing them for unauthorized in-app purchases racked up by their children. As a result a federal judge has determined that Amazon will be held liable for the charges since it did not sufficiently warn its customers about the possible charges associated with free apps.

The lawsuit was first brought against Apple by the Federal Trade Commission(FTC) in July 2014, after the agency reached settlements with both Apple and Google concerning the same issue.

In an FTC press release Chairwoman Edith Ramirez said,

We are pleased the federal judge found Amazon liable for unfairly billing consumers for unauthorized in-app purchases by children.We look forward to making a case for full refunds to consumers as a result of Amazon’s actions.

Oftentimes app developers incorporate revenue generating features aka “in-app purchasing” into their free apps in order to upgrade or customize users’ gaming experiences. These can be seen in the form of additional gaming coins, extra levels, or lives.

The problem arises when parents download apps onto their kids’ devices using their username and password, which inadvertently grants their children access to saved billing information.

In the case of Amazon, entering one’s password into a device opens up a window for approximately 15 minutes to an hour, in which children can spend at will without having to re-enter information.

Following the FTC’s case against Apple, the App Store was forced to change its labeling of apps from “Free” to “Get,” in order not to confuse customers on whether or not the app could still contain in-app purchases.

The FTC also won $32.5 million in the settlement with Apple, and another $19 million from Google to be refunded back to customers. In the case against Amazon, both parties still have to present more information to the court before an official settlement amount can be determined.

Alexis Evans

Alexis Evans is an Assistant Editor at Law Street and a Buckeye State native. She has a Bachelor’s Degree in Journalism and a minor in Business from Ohio University. Contact Alexis at aevans@LawStreetMedia.com.

The post Amazon Found Liable for In-App Purchases Made By Kids appeared first on Law Street.

If there’s one thing most of us out there are probably guilty of, it’s failing to read in full those terms of service agreements that seem to be a necessary evil when creating an account on any app or website.

Most of us don’t even know what we’re agreeing to when we quickly check off the box, and companies are well aware of this fact. That’s why Amazon decided to add in a cheeky apocalyptic caveat into its terms that should inspire users to start taking a closer look.

Hidden in the Amazon Web Service Terms for a new free 3D video game engine called Lumberyard is a clause that states game developers can’t use its materials for “life-critical or safety-critical systems.” However, that rule will be voided in the event of viral undead outbreak, a.k.a. a zombie invasion. The clause reads,

57.10 Acceptable Use; Safety-Critical Systems. Your use of the Lumberyard Materials must comply with the AWS Acceptable Use Policy. The Lumberyard Materials are not intended for use with life-critical or safety-critical systems, such as use in operation of medical equipment, automated transportation systems, autonomous vehicles, aircraft or air traffic control, nuclear facilities, manned spacecraft, or military use in connection with live combat. However, this restriction will not apply in the event of the occurrence (certified by the United States Centers for Disease Control or successor body) of a widespread viral infection transmitted via bites or contact with bodily fluids that causes human corpses to reanimate and seek to consume living human flesh, blood, brain or nerve tissue and is likely to result in the fall of organized civilization.

So in other words, if zombies attack you can legally use Lumberyard anyway you want!

By adding a bit of humor into what most people would call boring legalese, Amazon got people to pay more attention to what they’re effectively signing, and generated some buzz for its product. If for some reason you’d still rather click “read” than take the time to actually go through those legally binding terms after reading this, just know you may be missing out on your legal hall pass in the event of the zombie apocalypse.

Alexis Evans

Alexis Evans is an Assistant Editor at Law Street and a Buckeye State native. She has a Bachelor’s Degree in Journalism and a minor in Business from Ohio University. Contact Alexis at aevans@LawStreetMedia.com.

The post Amazon Will Release You From Its Terms of Service if Zombies Attack appeared first on Law Street.

Rumor had it that Amazon would be opening 300-400 brick-and-mortar stores in the upcoming years this past Tuesday, according to a Wall Street Journal article. By Wednesday the original source admitted his words were not the plans of Amazon, but not without getting the hopes up of several reporters and many Americans old enough to remember Borders. The reality of a future with the perks of digital commerce and the advantage of neighborhood stores may be a short lived dream, but it is an indication that we are not completely sold on the idea of a future with total digital reliance.

The rumor all began with Sandeep Mathrani, CEO of General Growth Properties (GCP), a real estate investment trust that specializes in shopping malls. During an investor call, Mr. Mathrani reportedly said, “You’ve got Amazon opening bricks and mortar bookstores, and their goal is to open, as I understand, 300 to 400 bookstores.” The Wall Street Journal took Mr. Mathrani’s word about the stores, and soon other reporters were spreading the word about Amazon’s new plan for a bookstore on a corner near you. Just yesterday though, GCP distanced itself from comments made by the CEO. The company iterated that the CEO’s statements did not represent Amazon’s plans.

The first Amazon bookstore opened in Seattle this past November, so it is not hard to believe they could exist. In Seattle, Amazon’s store stocks its shelves with the most popular selling titles online. Similar to other bookstores, Amazon sells related products such as its own Kindles and even Bose headphones. Any items sold in the store match the price of items online, so the prices are not displayed on the actual books or anywhere next to the books in the store. Instead customers have to scan the books in the store or use an App on their phone to find out prices, which one visitor in Seattle found to be an “infuriating difference” in what first appeared to be a normal bookstore.

Why would Amazon even need bookstores though, especially if they were one of the reasons for the decline of so many bookstores a few years ago? Well, it has been interpreted as a new trend for online retailers. E-tailers such as Birchbox, Warby Parker, and Bonbons use retail stores as a way of expanding their brand name, while mall retailers welcome the companies to fill in the vacancies of traditional stores closing in their malls. Sometimes these physical stores only come in pop up form, but whether they are there for one day or five months, physical stores allow customers to try out the items they’re interested in purchasing. Amazon needs little help expanding the brand’s name, but the stores would be helpful in promoting its new Echo speaker and Fire TV.

Along with worrying whether the bookstores were indeed real, some blogs assured readers not to get their hopes up. However, this warning wasn’t because of the speculation about the actual bookstores, but rather because the bookstores would not resemble those of the past. Fast Company noted the bookstores as “part showroom/boutique, part warehouse, part pickup and shipping window, and, yes, part traditional bookstore.” In some respects the furor over the Amazon bookstores surfaced from our own expectations of the past to return. Bookstores were always more than just a place to buy books. They were alcoves in neighborhoods where all generations could lose themselves in the surrounding titles of narratives, cookbooks, historical novels, and other works. Hopefully, Amazon realizes mixing a little bit of the past with the future would not be such a bad rumor to prove true.

Dorsey Hill

Dorsey is a member of Barnard College’s class of 2016 with a major in Urban Studies and concentration in Political Science. As a native of Chicago and resident of New York City, Dorsey loves to explore the multiple cultural facets of cities. She has a deep interest in social justice issue especially those relevant to urban environments. Contact Dorsey at Staff@LawStreetMedia.com.

The post All the Best Fads Make a Comeback: Rumors of Amazon Stores appeared first on Law Street.

No matter what you call them–hoverboards, swagways, swegways, or just plain silly, you’ve probably seen them. They’re the new two-wheeled skateboard-y type things that are propelled by a passenger shifting weight, and they’re a pretty hot new trend on city sidewalks. Given their seemingly-overnight popularity, it would be safe to assume that they’d also be a hot new holiday gift, and promoted by online retailers as such. But au contraire, new safety concerns actually have Amazon–the king of online retail–pulling many of the from the site. Additionally, the federal government is now looking into the safety of such devices. So it might not be all fun and games this holiday season for producers of the hoverboards.

Amazon has pulled hoverboards from the major producers, including Swagway, but some of the smaller companies that produce the devices are still up. According to Swagway, the takedowns took place after an email stating:

Amazon sent out a notice on Friday just before 5 p.m. PST, to all ‘hoverboard’ sellers to ‘provide documentation demonstrating that all hoverboards you list are compliant with applicable safety standards.’

Amazon isn’t the only company that has taken a step (or a roll?) away from the hoverboards. Overstock.com also announced that it will be pulling the hoverboards from its site.

Despite the hoverboards’ popularity, there have been multiple allegations that the devices can catch fire. They operate using lithium-ion batteries, which can overheat and cause problems. That issue makes it difficult to transport the hoverboards, which is why a few different airlines have already banned them. Safety officials in the United Kingdom also impounded 15,000 of the hoverboards earlier this month due to a faulty plug.

Additionally, the U.S. Consumer Product Safety Commission has said it has received at least 11 reports of hoverboard fires in 10 different states. Patty Davis, a spokesperson for the commission told CNN Money:

We consider this a priority investigation. This is a popular holiday item and it’s going to be in a lot of consumers’ homes, and we’d like to quickly get to the bottom of why some hoverboards catch fire.

Given how quickly hoverboards have caught on, this news isn’t going to be great for the all-but fledgling industry. Hoverboard manufacturers have to figure out how to get safety concerns under control, the sooner the better.

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

The post Amazon Stops Selling Some Hoverboards Over Safety Concerns appeared first on Law Street.

Amazon has taken a stand against “fake reviewers,” filing a lawsuit against more than 1,000 people who allegedly offered to post fake product reviews on the global commerce website for money.

The lawsuit targets people who were using Fiverr.com, a website where people complete simple tasks or services for strangers for a cost of $5, to write fake product reviews. Following a private investigation, Amazon uncovered and named a total of 1,114 “John Doe” defendants that were found to have “promised positive or 5-star reviews for Amazon sellers’ products.”

Amazon Complaint by Jacob Demmitt

In at least one instance, the seller of a ‘Verified Review’ (i.e., an ‘AmazonVerified Purchase’) was willing to receive an empty envelope, not the product itself, simply to create a shipping record in an attempt to deceive Amazon and its customers.

If this lawsuit feels a little like deja vu, you might recall the company filing a similar suit in April, where it sued several websites that sold fake reviews of products on Amazon.com.

However, this time instead of going after Fiverr.com, Amazon chose instead to target the individuals on its site that were offering to make the fake reviews. The decision was clearly motivated by the company’s desire to uphold the integrity of its comment feature and discourage others from continuing the practice. The lawsuit reads,

Defendants are misleading Amazon’s customers and tarnishing Amazon’s brand for their own profit and the profit of a handful of dishonest sellers and manufacturers. Amazon is bringing this action to protect its customers from this misconduct, by stopping defendants and uprooting the ecosystem in which they participate

As an avid online shopper, I can personally attest to a product review’s power of suggestion. Sometimes just a few positive words from a stranger can be the deciding factor between buying one item or the next. Sites like Amazon.com understand this, and expect its database of feedback to remain a  trustworthy resource for its consumers. So when people use sites like Fiverr.com to craft fictitious opinions, it taints the whole system. Amazon is smart to go after these phony reviewers.

Alexis Evans

Alexis Evans is an Assistant Editor at Law Street and a Buckeye State native. She has a Bachelor’s Degree in Journalism and a minor in Business from Ohio University. Contact Alexis at aevans@LawStreetMedia.com.

The post Amazon Targets More Than 1,000 “Fake Reviewers” in New Lawsuit appeared first on Law Street.

Digital books have proliferated with the invention of e-readers and e-reading apps over the last decade. Many of these books come from self-publishing–authors who write and publish the books themselves, eschewing traditional publishing houses and print copies. Some people do it as a way to get their words out there, while others use it as a way to make money on the side.

Either way, it is a market that is quickly becoming oversaturated with books that aren’t always of the highest quality, and often contain typos, inaccurate information, and in many cases, are plagiarized from other sources. Facing negative feedback, Amazon is changing the way people pay for their books by creating a by-page payment system. Read on to learn more about Amazon’s latest self-publishing policy.

Self-Publishing on Amazon

Self-publishing represents a huge part of Amazon’s profits–nearly 31 percent of e-book sales come from self-publishing. Books start at just $0.99 and jump up from there, with many books offering free promotions or BOGO opportunities for serialized works, though most works hover around $2.99-$3.99. In Amazon’s current model, readers generally buy the books outright–that won’t change; however, what will change is the way the Amazon Lending Library works.

It isn’t just a huge opportunity for Amazon, but rather a huge opportunity for the writing and reading communities. People who may not have been able to find publishers or agents are now able to at least get their words out there. And who knows what will happen? Self-publishing was E.L. James’ first step toward huge success.

Problems

Amazon has said that the program wasn’t actually for the readers, but instead came from the outcries of writers, who previously were paid $1.29-$2.88 every time that their books were borrowed through Amazon’s Lending Library program.

We’re making this switch in response to great feedback we received from authors who asked us to better align payout with the length of books and how much customers read. Under the new payment method, you’ll be paid for each page individual customers read of your book, the first time they read it.

But certainly there were readers involved in the complaints as well. Many were complaining that books weren’t to the level they were expecting or that they weren’t quality publications. Many thought that the books were just packed with “key words” that would simply rank high on the search, but that the actual quality of the pages wasn’t high.

Pay by Page

The idea behind Amazon’s new policy of pay by the page is simple: authors will get paid simply for the number of pages that a person actually reads. The thought behind it is that books that aren’t quite up to the standards readers expect won’t have as many people reading them cover to cover, so authors are incentivized to raise their games. It also offers a great chance for writers to get feedback and see where people are leaving their work–which is great because authors can edit anything they’ve posted to Amazon.

Starting on July 1, authors who specifically publish through something called the KDP Select Program will start getting paid per page, which is quite a large change from what they used to do. With the old method of payment, Amazon would simply split up the money that they made among authors based on the number of times their books were borrowed through one of Amazon’s Kindle options–either Kindle Unlimited, which is a sort of library subscription that costs $9.99 a month, or the Kindle Lending Library, which is available to Amazon Prime members.

Now, however, authors are paid for the amount of time the screen remains up. Amazon isn’t forcing authors into the program, but they can choose to opt in.

Amazon has had to do some work to get everything ready for the new program, which is only available through the Kindle Lending Library, including a standardization of page lengths and text sizes. TechCrunch warns that long dedication pages or quotes at the start of your book won’t help earn you money, either:

We calculate KENPC (Kindle Edition Normalized Page Count) based on standard settings (e.g. font, line height, line spacing, etc.), and we’ll use KENPC to measure the number of pages customers read in your book, starting with the Start Reading Location (SRL) to the end of your book. Amazon typically sets SRL at chapter 1 so readers can start reading the core content of your book as soon as they open it.

The program, which does cap the amount of money an author can make at $3 million per month, is currently in the first few weeks of testing, and there have been few initial reactions.

Criticism of Pay by Page

The idea hasn’t exactly gone over well with some authors. Hari Kunzru, author of “The Impressionist,” revealed his thoughts that the new payment system “feels like the thin end of a wedge.” He later went on to explain that he felt like Amazon was trying to assert its dominance over small-time writers.

Peter Maass, author of “Love Thy Neighbor” and “Crude World,” offered up a valid point, writing, “I’d like (the) same in restaurants — pay for how much of (a) burger I eat.”

Authors may be making less per book. Inquisitr explains: “That means if a book has a KENPC of only 100 and someone reads it from front to back, an author make 60 cents for the entire download. If they only read the first 10 KENPs, then the author makes six cents.”

A nameless literary agent explained to the Guardian why this could be a problem: “A lot of self-published romance authors are disabled, stay-at-home mums, or even a few returned veterans who work in the field because a regular job just isn’t something they can handle. People are shedding a lot of tears over this.” The new model could very well mean that these people will get paid less, especially as they tend to be the people who writer longer, novel-length books instead of “how to” guides that many “Professional Self Publishers” work on.

Just like any other situation, there are likely to be people who are going to take advantage of the system. People may make books that are significantly longer to take advantage of the money, or they may post shorter chapters that have fewer words per page. Running with that thought, the Guardian highlights an interesting problem:

But now we’re getting into murky territory. It is impossible to write a book that every reader will enjoy. Donna Tartt’s “The Goldfinch,” close to 800 pages long, failed to keep many Kobo readers engaged all the way through; data showed that around 55 percent of readers did not finish it. Yet “The Goldfinch” won the Pulitzer Prize for fiction. Do the figures prove that Tartt needs to learn from her readers and write a “better” book next time, despite being awarded one of the highest literary honours? Should she follow the numbers, or write the books she wants to?

Which leads us right into another problem: Do certain books have an advantage over other books under Amazon’s new policy? It would appear so as it not only has to do with length, but also with the genre of story. Memoirs and thrillers–known as page turners–would have a clear advantage over historical books or criticism, as they tend to entice readers to stick around the longest.

Conclusion

So will Amazon’s newest system benefit writers and readers? It truthfully depends on who you are and your writing style. Readers have the most to benefit from the system, especially if they use the Lending Library and can just return the book. However, it could also push writers to become more serious about what they do.

As the program is still in its infancy, there is no data that can explain how the system is fairing for authors or Amazon; however, Amazon is likely not willing to give up a large piece of profit, so if there are problems, changes will be swift.

Resources

Inquisitr: Kindle Unlimited KENPC Explained: Self-Published Authors Could be Looking at Massive Pay Cut

Kindle Direct Publishing: Kindle Unlimited Pages Read

Live Mint: Thrillers at an Advantage in New Amazon Royalties System

Tech Crunch: Amazon Tweaks Kindle Publishing Royalties to Encourage Page Turners

Guardian: Pay-Per-Page: Amazon to Align Payment With How Much Customers Read

Business Journal: Self-Published Authors Hoping For a Real Page-Turner

Gizmodo: Amazon Will Soon Start Paying Authors Based on e-Book Pages Read

New Republic: Amazon’s Pay Per Page Deal is No Big Deal

Publishers Weekly: Surprising Self-Publishing Statistics

Reuters: Amazon to Pay Self-Published Authors Based on Pages Read

Smashwords: 2014 Smashwords Survey Reveals New Opportunities for Indie Authors

Atlantic: What If Authors Were Paid Every Time Someone Turned a Page?

Reader’s Digest: How Can the Average Writer Make Money Self-Publishing e-Books?

Noel Diem

Law Street contributor Noel Diem is an editor and aspiring author based in Reading, Pennsylvania. She is an alum of Albright College where she studied English and Secondary Education. In her spare time she enjoys traveling, theater, fashion, and literature. Contact Noel at staff@LawStreetMedia.com.

The post Is Amazon’s New Self-Publishing Pay-By-Page Policy Good For Writers? appeared first on Law Street.

The future is now…on hold until further notice. The Federal Aviation Administration (FAA) has proposed drone regulations that will make Amazon’s future drone service (dubbed “Amazon Prime Air”) nearly impossible to implement. Unfamiliar with the online retailer’s plan to send packages via unmanned drone? Take at look at this video with Amazon CEO Jeff Bezos featured on CBS This Morning.

The concept of drone ethics has become a hot-button issue both in the United States and abroad. Most recently, the off-Broadway play “Grounded,” starring Anne Hathaway, has brought issues regarding remote drone pilots into the spotlight.

Drone regulation remains a highly divisive issue. There is no question that drones have the potential to be used as weapons of war  as well as tools for efficient aid delivery.

Let’s highlight some clear benefits to delivery by drone in the United States. If small aircraft are being used, that means having fewer delivery trucks on the road, less fuel being consumed, and faster delivery times. Companies like Amazon and Google are urging the FAA to revise its irksome rules that impede the use of drone technology rather than accommodate it.

For example, under FAA rules all drone operators must fly aircraft “only within their line of sight.” While this rule might make sense for a recreational drone user, it does not necessarily make sense for a commercial drone that could be programmed to follow a GPS path to an exact location.

Speaking of recreational drone users–if you or anyone you know owns a drone, you could get into big trouble if you do not abide by the FAA’s policies regarding small, unarmed aircraft systems.

Seems like a lot of rules for a device that could be bought online for under a hundred bucks. In fact, on most sites there are no age restrictions to purchase drones. Are kids or teenagers going to know that flying drones above 400 feet is illegal? Are they even going to abide by the FAA’s rules even if they do know? Hopefully they don’t try to fly drones in harsh weather. Or fly too close to seagulls. Or interfere with local air traffic. (Suddenly smart phones don’t seem so dangerous anymore.)

The FAA has created conservative rules regarding drone use, and it is going to take its time evaluating comments from the public and private sectors while it revises those rules. Roughly speaking, it will take 18 to 24 months for the FAA to review everything and speak with Amazon regarding proposed policy changes.

Corinne Fitamant

Corinne Fitamant is a graduate of Fordham College at Lincoln Center where she received a Bachelors degree in Communications and a minor in Theatre Arts. When she isn’t pondering issues of social justice and/or celebrity culture, she can be found playing the guitar and eating chocolate. Contact Corinne at staff@LawStreetMedia.com.

The post Looking Forward to Amazon Deliveries Via Drone? FAA Says Not So Fast appeared first on Law Street.

Images of deforestation are among the most striking when it comes to addressing human impact on the environment and all the problems that follow. Similarly, endangered animals are constantly in the conversation and the need to enact more protections and conservation measures remains pressing.

Read More: Endangered Species Protections: Are We Doing Enough?

Yet what tends to be overlooked is that from both an ecological and human policy-related standpoint these things are deeply interrelated. When we consider how to protect and improve our forests and our biodiversity, we should think about them in tandem.

Among the innumerable reasons why maintaining forests is important, one is that they store carbon. Having it naturally contained in the biomass means that there is less in the atmosphere; forests help keep greenhouse gases and climate change in check. But, as has been a topic of conversation for decades now, some of the most substantial ones, such as the Amazon Rainforest, are in danger. A 30-year study by the University of Leeds concluded that the unnaturally large amount of carbon in the atmosphere has accelerated the lifespans of trees there. This means that they die younger; high tree mortality is an unexpected contributor to the shrinking of the rainforest. It is not just a matter of logging and increased building. With a higher tree mortality and a decreasing range of the forest, the amount of carbon the rainforest can store has been overtaken by the amount of fossil fuel emissions in Latin America.

Courtesy of CIFOR via Flickr.

Another consequence of deforestation is the loss of biodiversity that resides therein. It has been determined that there exists a “threshold” for forest cover, and if it is surpassed then the loss of species accelerates in quantity and geographic spread. Most surveys tracking deforesting activity indicate that thresholds are drawing quite near or have recently been surpassed. The problem with the way this issue is approached is that Brazilian law applies activity to individual farms and their property. Rather, due to the more complex nature of animal geographies and forest topography, policies need to take into account particular regions in the rainforest.

This concept is further complicated by the interrelatedness of forests and animals. It is not just a matter of aesthetically preserving animals, but they play an integral role in the health of the forest itself. Similar to how bees have a key function in floral reproduction because they distribute pollen from plant to plant, large animals spread around tree seeds as they go about their business. Big mammals in particular tend to have a wide range, traveling far in search of food and marking their territory. As forests and animals affect each other reciprocally, damaging one invariably damages the other, which in turn degenerates the other further and onward in the vicious cycle. This is another series of reasons why the New Jersey bear hunt ought to be rethought.

Courtesy of laurence_baulch via Flickr.

These problems are not restricted to the Amazon and Latin America. The national park system in the United States is primarily designed to preserve scenic natural wonders. Yet a new study demonstrates that the locations of these parks do not line up with the general locations of biodiversity in the country that are in need of protection. The bulk of parks is concentrated in the American West, where the lands are relatively sparsely inhabited compared to the East, South, and Appalachians, which contain many “unique or rare species” whose interests are not properly addressed. It is in these geographic regions, researchers explain, that the majority of the continent’s endemic species are located. Meaning that they are not found elsewhere in the world or in other habitats, endemic species play an vital role in the health and operations of their ecosystems. Once more, if they become too severely threatened and begin to die out then the surrounding forests and general environments themselves, and subsequently human health, are likely to degrade substantially.

In addition to striving to protect the correct and most vulnerable areas, there are generally speaking two measures we can take in order to avert crises. The first is to pursue development in a more conservation-oriented fashion. Laying down specific ground rules when pursuing building projects, especially roadways and infrastructure, can help decrease the amount of destruction that follows. This way, as representatives of the plan have put it, “We’re not anti-development, we’re anti-environmentally destructive development.” The second course of action is to actively attempt to restore forest cover. Leading the way in this endeavor is China, whose Three-North Shelter Forest Program is creating a corridor of trees intended to diminish expansion of the Gobi Desert. Reducing desertification will also ensure there is more farmable land, which is obviously in human interest as well.

We have been talking for a very long time about saving the trees and preserving the rainforest. But there is a lot more at stake than symbolic environmentalism or ensuring there is enough oxygen to breathe. Carbon storage, wildlife habitats, anti-erosion, anti-desertification, and many other things on a long list are at stake. Addressing these concerns, while also thinking about the status of many animals, will help to improve the condition of both as well as the many interrelated factors on the Earth.

Franklin R. Halprin

Franklin R. Halprin holds an MA in History & Environmental Politics from Rutgers University where he studied human-environmental relationships and settlement patterns in the nineteenth century Southwest. His research focuses on the influences of social and cultural factors on the development of environmental policy. Contact Frank at staff@LawStreetMedia.com.

The post Why Protecting Forests and Animals Should Be the Same Mission appeared first on Law Street.

Commercial aviation received a long-awaited triumph Sunday when the Federal Aviation Association (FAA) released draft rules for small Unmanned Aircraft Systems (UAS) that could mark the beginning of a commercial drone trend for businesses. According to The Washington Post, once these rules undergo public review and are finalized, the FAA estimates more than 7,000 businesses will obtain drone permits within three years.

These new UAS rules would make it relatively easy for businesses to acquire drone piloting licenses. After paying about $200 in fees, operators would simply have to pass a written proficiency test, and be vetted by the TSA to receive a license–no flight demonstrations necessary.

However these new FAA rules have some limitations that aren’t entirely business friendly. Operators must be at least 17-years-old and are required to remain within eyesight of their drones at all times. Drones can also only be flown during daylight hours under 100 mph and below an altitude of 500 feet. These restrictions would make long distance flights impossible, squashing “drone delivery” plans for Domino’s Pizza “Domicopter,” newspaper distributors, and Amazon’s plan to deliver goods by drone.

Amazon’s Prime Air promised to reinvent modern delivery systems, with designs to “safely get packages into customers’ hands in 30 minutes or less using small unmanned aerial vehicles.” An example of how the futuristic delivery system would work can be seen in the video below.

In July, Amazon execs pleading with the FAA for more regulatory support after hampered outdoor testing efforts, threatening to take their system overseas if not given a solution. This seems to have had no effect on the FAA decision making. Paul Misener, Amazon’s vice president for global policy, told USA Today that these current rules wouldn’t allow Prime Air to operate in the United States, but it’s not likely to stop Amazon from working towards a time when it can operate. Misner stated:

The FAA needs to begin and expeditiously complete the formal process to address the needs of our business, and ultimately our customers. We are committed to realizing our vision for Prime Air and are prepared to deploy where we have the regulatory support we need.

These regulations only apply to drones weighing 55 pounds or less. The FAA is still drafting plans for larger drones that are expected to take several more years before being sorted out. The small hobby drones that have become exceedingly popular in the U.S. aren’t subject to the rulings either. Under a law passed by Congress in 2012, the FAA is largely prohibited from regulating them as long as they do not interfere with air traffic.

Don’t expect to see  one of these buzzing billboards anytime soon though; businesses likely won’t be able to begin adopting them until at least early 2017. As for Amazon, Prime Air may not be a complete lost cause in the states. Commercial drone regulations are likely to loosen as they become more commonplace.

Alexis Evans

Alexis Evans is an Assistant Editor at Law Street and a Buckeye State native. She has a Bachelor’s Degree in Journalism and a minor in Business from Ohio University. Contact Alexis at aevans@LawStreetMedia.com.

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It’s still the holiday season, and during this time of the year it’s easy to forget to check the news. Luckily, Law Street has you covered with this week’s edition of “In Case You Missed It.” Our top story last week covered the ongoing legal battle between Colorado, Nebraska, and Oklahoma over Colorado’s legalization of recreational marijuana, written by Anneliese Mahoney. Our number two post, by Lexine DeLuc,a should help any Serial fans out there with their withdrawals–it’s a great collection of parodies inspired by the hit podcast. Finally, rounding out the list was a story from blogger Katherine Fabian on how to spot fake handbags during your holiday gift shopping. ICYMI: Check out what you missed on Law Street last week.

#1 Nebraska and Oklahoma Sue Colorado Over Marijuana Legalization

Colorado voted to legalize recreational marijuana in 2012, and officially started selling it in the beginning of this year. Now, almost a year later, Colorado is experiencing some backlash for its choice to legalize. Two of Colorado’s neighbors–Nebraska and Oklahoma–are suing the state because of the impact of legal marijuana within their borders. Read the full article here.

#2 Five Parodies to Get You Through Serial Withdrawal

Serial‘s first season has ended and if you’re feeling a little separation anxiety, here are the top five parodies to help fill that void. The list includes selections from Saturday Night Live, Funny or Die, SubmissionsOnlyTV, and even a few parodies with multiple episodes. Read the full article here.

#3 Holiday Gift Guide: How to Authenticate a Designer Handbag

It’s almost 2015 and there is now a plethora of consignment sites to get your second-hand designer goods. But as great as sites like Ebay, Amazon, and the new Alibaba are, sometimes sellers aren’t always honest when they claim their items are authentic. So to make sure that you don’t get duped (like my poor brother did when he ordered those fake Nikes from China) I’ve put together a handy guide on how to spot a fake. Read the full article here.

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

The post ICYMI: Best of the Week appeared first on Law Street.

Last week, Federal Judge Denise Cote approved a class action settlement agreement in which Apple may begin paying $400 million dollars to as many as 23 million consumers. The suit regarded antitrust law violations that it committed when it conspired to raise e-book prices with book publishers.

According to Publishers Weekly, the settlement terms are as follows:

Apple will pay $400 million to consumers only if the liability finding survives the appeal process; it will pay $50 million if the liability question is vacated or remanded for further proceedings. If the liability finding is reversed on appeal, Apple will pay nothing.

The actions that precipitated the lawsuit started a few years ago. Before 2010, the big-6 publishers (now the big-5 publishers since the Penguin-Random House merger) used the wholesale model to sell e-books. Under the wholesale model, publishers recommended a retail price to a wholesaler and sold the book to the wholesaler for a certain percentage off the publisher’s recommended retail price. The wholesaler then sold the book to the retailer, who set its own e-book prices. For example, a publisher could set a recommended retail price for a book of $15.99, sell the book to the wholesaler for a fifty percent discount of $7.99, and the retailer could then sell the book at $10.99.

Amazon then began selling e-books at $9.99, and publishers initially had trouble competing. In 2010, Apple convinced the big-6 publishers to change business models, and the publishers entered into the agency model. Under the agency model, publishers set the retail price  of an e-book and use retailers as agents to sell the e-book. The retailer then receives thirty percent of the sales price of the e-book, and the publisher receives the remaining seventy percent. For example, a publisher can set a retail e-book price at $15.99, and the retailer must sell the e-book at $15.99; however, the retailer receives thirty percent of the sales price, and the publisher receives the remaining seventy percent.

The Department of Justice soon accused five of the big-6 publishers and Apple of fixing e-book prices to thwart Amazon’s $9.99 e-book price, and the publishers and Apple were later found guilty of violating the Sherman Act. Penguin, Hachette Book Group, Macmillan, HarperCollins, and Simon and Schuster paid $75 million, $31 million, $25 million, $19 million, and $17 million in damages respectively to e-book consumers, for a grand total of roughly $167 million in damages.

The potential $400 million class action settlement with Apple is in addition to the $167 million paid in damages by the publishers, so all eyes in the publishing industry will be focused on the Second Circuit on when it hears Apple’s appeal on December 15..

This class action settlement comes at an interesting time in the book publishing industry.  As part of the original DOJ antitrust settlement, Hachette, HarperCollins, and Simon Schuster ended their contracts with e-book retailers like Amazon and allowed retailers to renegotiate the contracts. Moreover, the settlement allowed retailers to return to the wholesale model, and the three publishers also agreed to not interfere with price discounts for two years. Now, Hachette and Simon and Schuster have entered into separate agreements with Amazon concerning e-book prices.

Apple and the publishers are undoubtedly hoping for a reversal, but I don’t think that is likely.  We will just have to see what happens.

Joseph Perry

Joseph Perry is a graduate of St. John’s University School of Law whose goal is to become a publishing and media law attorney. He has interned at William Morris Endeavor, Rodale, Inc., Columbia University Press, and is currently interning at Hachette Book Group and volunteering at the Media Law Resource Center, which has given him insight into the legal aspects of the publishing and media industries. Contact Joe at staff@LawStreetMedia.com.

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My publishing career is unique because it has solely been through an intern’s eyes. I attended the 2010 NYU Summer Publishing Institute–where, I might add, I met my fiancée, who is currently a book editor. Like most English majors, I wanted to be an editor; however, by the end of the six-week program, my tune changed 180 degrees, and I knew I wanted to be a literary agent and a book publishing attorney. Two years later, I enrolled in law school.

Excluding one summer internship at talent agency William Morris Endeavor, the bulk of my legal internships have been with book publishers like Rodale, Inc., Columbia University Press, and Hachette Book Group. You can say that I’ve found my way across the publishing landscape.

Regardless of where I’ve interned, however, I’m continually amazed at the people I’ve come across and the amount of effort it takes to publish books, which outsiders—consumers, critics, and dare I say, even authors—may not realize.

It’s no secret that the majority of employees in book publishing are grossly underpaid (interns included, if they are paid at all). For the majority of departments, employees start earning larger salaries once they reach senior positions, which can take more than a decade at times. However, the lack of pay produces camaraderie among book publishing industry members, especially younger employees who trade in their lack of a paycheck for the opportunity to assist in creating great art and surrounding themselves with books all day.

From top to bottom, book publishers are made up of mostly English majors who are editors, or who had dreams of becoming editors, but gravitated toward marketing, publicity, production, finance, art, contracts, subsidiary rights, or if you’re like me, the legal department. For this reason, publishing companies are unique in that each department contains members who are just as passionate, or even more passionate, than the next department about books.

This passion creates a work ethic within employees that the public may associate with big law firm attorneys, doctors, or investment bankers. Bringing work home and working on weekends can be the norm for some, especially when first beginning a book publishing career. Editorial assistants, in particular, are known to work extremely long hours, and their lives, which used to contain a full social calendar, are suddenly taken over by their authors’ books. They live and breathe through their authors’ successes or lack thereof. Life isn’t much better for mid-level and senior employees who bear the brunt of the responsibility for producing great books, turning a profit, and essentially keeping the book publishing industry afloat.

No matter how little they’re paid or how hard they work, what amazes me the most about the publishing industry is how genuine and kind everyone is.  Somehow they manage to wake up, wait in rush hour traffic—sometimes traversing across states lines—and walk into the office, smiling brightly or laughing, knowing deep down that they get to develop their own piece of culture.

This is why I’m glad Amazon and Hachette agreed to e-book and print price terms yesterday.  Forget the economic reasons. Forget who was right or who was wrong. The book publishing industry produces wonderful, kind people who help create art that can change you. Let’s not forget about that, and more importantly, let’s not forget about them.

Sometimes, I feel they were lost in the shuffle during the dispute. The media didn’t pay attention to them. Why would they? They didn’t create newsworthy events. Nevertheless, for six months they all sat in their cubicles and wondered aloud or to themselves what would happen if Amazon won. Would the book publishing industry meet the music industry’s fate? Would they be out of a job? Would they have to find a new career?

Fortunately, they’re not going anywhere.

Joseph Perry

Joseph Perry is a graduate of St. John’s University School of Law whose goal is to become a publishing and media law attorney. He has interned at William Morris Endeavor, Rodale, Inc., Columbia University Press, and is currently interning at Hachette Book Group and volunteering at the Media Law Resource Center, which has given him insight into the legal aspects of the publishing and media industries. Contact Joe at staff@LawStreetMedia.com.

The post Hachette v. Amazon Deal Matters (But Not For the Reasons You Think) appeared first on Law Street.

Amazon is bigger than ever. As The New York Times reports, Amazon’s Kindle is at the top of the list for e-readers, the company launched new TV-streaming devices, and its Fire Phone was posed as a contender to the iPhone and other successful smartphones. But problems are piling up for the online retail giant. Wired Magazine declared the Fire Phone a failure and the new Fire TV Stick is backordered until January, according to CNET. Further, Amazon is in hot water with seemingly relentless criticism.

Literary agent Andrew Wylie recently denounced Amazon at a writers’ conference in Toronto, as the Guardian reports. Known to many as “the Jackal” for his business strategies, Wylie condemned Amazon’s powerful grip on distribution as being ISIS-like. A comparison of any organization to those radicals terrorizing Iraq and Syria is not an easy claim to substantiate, and hardly appropriate. Nonetheless, Wylie’s polemic rakes Amazon through the coals and foresees an end to its digital dominance. “I believe with the restored health of the publishing industry and having some sense of where this sort of ISIS-like distribution channel, Amazon, is going to be buried and in which plot of sand they will be stuck, [publishers] will be able to raise the author’s digital royalty to 40 percent or 50 percent,” Wylie said. While the Guardian writes that “Wylie said he believed Amazon’s digital monopoly could be weakened,” Amazon isn’t truly operating as a monopoly, or a seller with ultimate market power to set prices.

Nobel prize-winning economist Paul Krugman wrote about Amazon’s power earlier this month. The company, Krugman says, is not so much acting as a monopolist as “it is acting as a monopsonist, a dominant buyer with the power to push prices down.” Rather than sucking as much profit as possible from consumers, Amazon keeps “prices low, to reinforce its dominance. What it has done, instead, is use its market power to put a squeeze on publishers, in effect driving down the prices it pays for books.” Amazon’s dominance lies in its ability to demand extremely low prices from publishing companies so that its own resale prices are low for online shoppers.

Around the world, too, the company is facing trouble. This year, a German union has had ongoing disputes with Amazon. This shouldn’t be taken lightly, as “Amazon employs a total of 9,000 warehouse staff at nine distribution centers in Germany, its second-biggest market behind the United States, plus 14,000 seasonal workers,” Reuters reports. The union, called Verdi, is demanding greater pay for warehouse workers while the company “regards warehouse staff as logistics workers and says they receive above-average pay by the standards of that industry.” The contention of which industry the workers even belong to is central to the disputes. “The crux of the issue is whether the workers are operating in logistics or retail capacities,” according to a CNET article covering strikes. Verdi wants its workers classified in the retail and distribution sector, in which standard labor wages would be higher.

Amazon will not be able to keep up with these publicity attacks no matter the new products it releases, especially when the products’ quality is also poor. Whether criticism is coming from the polemic—if grossly hyperbolic—Wylie, the analytic Krugman, or the tenacious Verdi, Amazon needs to respond to its critics as soon as possible. Further, it needs to change its corporate structure: there need to be fairer deals with publishers and fairer negotiations with laborers. Without these concessions, Amazon will fall by the wayside; either it will succumb to competition that treats other businesses and workers more fairly, or to government intervention that forces it to behave better.

Jake Ephros

Jake Ephros is a native of Montclair, New Jersey where he volunteered for political campaigns from a young age. He studies Political Science, Economics, and Philosophy at American University and looks forward to a career built around political activism, through journalism, organizing, or the government. Contact Jake at staff@LawStreetMedia.com.

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For a few months now, retail giant Amazon.com, and book publisher Hachette have been feuding. The most recent development in their fight came on July 30, 2014, when Amazon pushed for Hachette to allow the sale of e-books at a cheaper price of $9.99. The math behind Amazon’s reasoning is laid out clearly on their website. For every book priced at $14.99, Amazon would sell 1.74 more copies if the book was priced at $9.99.  As the saga stretches onward, Hachette’s bargaining power continues to erode, and it’s looking like this will turn into a clear win for Amazon.

The Background

The battle began earlier this year when readers logged on to Amazon only to discover the pre-order button for certain Hachette books, like J.K. Rowling’s “The Silkworm,” had disappeared. Amazon began understocking Hachette books. Customers reported the books they ordered took extra time to arrive. The website recommended users buy a non-Hachette book instead.

Some observers cite these tactics as instances of bullying by the retail giant. Many saw it as a new low, since the company was actively damaging the customer experience. More than 900 prominent authors have staked their positions against Amazon. Stephen Colbert, carried by Hachette, is not just mad, but “mad prime.”

E-book pricing disputes are nothing new. Book publishers have long pushed for an “agency” model of pricing, where the publishers dictate pricing. Amazon instead advocates a “wholesale” model, where retailers set the retail price and can offer discounts. Publishers aren’t fans of these hefty discounts which can give one retailer–like Amazon–a huge advantage.

The “big five” publishers–Hachette, HarperCollins, MacMillan, Penguin Random House, and Simon and Schuster–thought they found a way out of the issue when they signed contracts with Apple in 2010 to ensure an agency pricing model for e-books. Amazon was not happy. The Department of Justice’s Antitrust Division rushed to Amazon’s aid and brought a suit against these companies for price fixing. The publishers all settled out of court, but Apple was found guilty of price-fixing–a decision it is still appealing. Since the settlement, Amazon has been allowed to discount e-books up to 30 percent. But any discount by Amazon comes from their own pocket, which obviously isn’t preferable for the company.

A Lawsuit in the Works?

With the 2012 settlement set to expire this year, it is likely the recent dispute is Amazon’s attempt to open a new window for pricing negotiations. Amazon wants to buffer its own earnings rather than taking a hit from out-pricing competitors. Publishers are fearful Amazon will dominate the market even further, demand lower wholesale prices, and squeeze profit margins to zero.

Despite Amazon’s questionable tactics, it is difficult to see how Hachette could win in an antitrust suit against Amazon. First, Amazon is not a classic monopoly. If anything, Amazon would be a monopsony. While a monopoly occurs when a dominant seller can raise prices of what it sells, a monopsony occurs when the buyer of goods can unlawfully lower the price of what is buys. Both can distort the market, and both can violate antitrust laws.

Amazon controls more than 60 percent of the e-book market and more than 40 percent of new book sales. But simply dominating the market is not an antitrust violation. The precedent for pushing a monopsony case against Amazon does not look promising. There has never been a case in U.S. competition law where a single company was declared a monopsonist. Most scholars today agree the Amazon and Hachette dispute is just that–a typical business dispute–rather than an antitrust violation.

“Dominant Power”

Section Two of the Sherman Antitrust Act, the 1890 Act which regulates anti-competitive business practices, outlaws monopolistic power in the relevant market acquired or maintained through exclusionary or anti-competitive behavior.

By bringing a lawsuit, Hachette would first have to prove Amazon is the dominant buyer in the “relevant market.” It is unclear if the market would be defined as the market for e-books, for Hachette books in general, or for Hachette books online. For Amazon to be the dominant power in the market, Hachette must have no other viable options to sell their e-books. Since publishers do have the freedom to sell e-books through other websites, many argue Amazon cannot be considered a monopsony.

“Anticompetitive Practices”

Secondly, Amazon must have engaged in “exclusionary or anticompetitive practices,” such as refusal to deal or predatory pricing. “Refusal to deal” involves restricting the supply of goods or the methods of buying or selling goods. By partially cutting off Hachette from the market in recent months, the argument could be made that Amazon is refusing to deal. However, courts narrowly interpret “refusal to deal” and are unlikely to see Amazon’s acts as an antitrust violation.

A lawsuit could be brought on the grounds that Amazon is engaged in predatory pricing practices by setting low prices to drive out all other competition. However, the bar to prove predatory pricing is very high. It would be hard to prove Amazon is not simply engaged in legitimate price competition. Since antitrust suits aim to help consumers, low prices are not typically seen as a problem.

Proving predatory pricing usually means proving that suppliers are forced to sell books at such a loss that there is decrease in the overall supply of books for consumers. So far this has not been the case. There has been no reduction in the variety of new books, nor has Amazon driven out all competitors to later jack up prices themselves.

The Upshot

Book publishers realize how little power they have against Amazon, so the recent trend in the industry has been to merge for greater bargaining power. Penguin recently merged with Random House, and HarperCollins bought Harlequin. Bigger publishers mean greater power plays and a better chance for even pricing negotiations with Amazon.

Ultimately it isn’t likely that Hachette has a case against Amazon on its own. If anything, the legal battle may be whether Amazon engaged in deceptive sales practices by saying certain Hachette titles were unavailable. For now, Amazon’s market power itself isn’t hurting consumers’ wallets, and Hachette can still sell e-books through other vendors. The pricing wars will continue, but don’t expect Hachette to win an antitrust suit anytime soon.

—

Alexandra Stembaugh is a senior at the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

Featured image courtesy of [Karin Lizana via Flickr]

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

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I imagine the folks at places like Apple and Google have huge smirks on their faces as they watch the media frenzy Amazon Fire has caused. Why? Because companies like Apple and Google ARE technology, that’s their whole reason for existing. In contrast to them, Amazon is more like a digital supermarket with competitively priced inventory, and the added advantage of delivering its goods directly to consumers. Increasing Internet sales is its number one goal, so Amazon continually creates new apps and devices to achieve it. The difference between Amazon and a company like Google is that Amazon doesn’t have a passion for creating innovative technology for the sake of being a heavy hitter in the tech community. Due to this difference, Amazon Fire will be intriguing, until it is quickly replaced with a significantly better product.

What sets Amazon Fire apart from other smartphones is its built in and specialized Augmented Reality interface. Augmented Reality (AR) provides a connection between the real world and the digital world with overlays of video, audio, 3-D content, and location-based information. AR is what users experience with Google Glass and apps created by companies like Metaio, Layar, and Aurasma. When using the Fire phone’s firefly feature, the phone can instantly identify an object, price it,  and provide an option to buy through Amazon. This is most certainly convenient; however the phone’s built in capabilities aren’t much different from the Amazon Flow app, which is already available for both Android and iOS phones.  Although Amazon has used AR in its effort to increase sales, it definitely isn’t the first company to experiment with this technology, and it is actually behind in the ability to capitalize on all the known AR capabilities.

The use of this technology for marketing and ads as well as within specific industries like real estate has evolved since the early 2000s. Metaio is one of the first companies to promote the use of Augmented Reality through print campaigns and consumer usable home design and decoration AR solutions. Metaio, a German company, was founded in 2003 by CEO Thomas Alt. For Alt, the creation of AR stemmed from a project with Volkswagen. To build upon this technology, Metaio was awarded a German government grant to continue the work, which resulted in the creation of Augmented Reality. Since Metaio’s inception, it  has remained at the forefront of AR innovation and truly envisions AR as the new frontier. While companies like Google have partnered with Blipper to create real-time interactive image recognition Augmented Reality for Google Glass, Metaio is far more advanced.  It’s moved on to thermal touch, to make the whole world a touchscreen.

So what is my point?  Augmented Reality is the main selling point that Amazon is using to entice consumers to buy the Amazon Fire phone, but the company isn’t even using the feature its greatest abilities. Amazon Fire’s AR capabilities are basic compared to the new innovations that companies like Metaio are creating. On top of that, companies like Google have already released AR products and are continuing to push the limits of those capabilities. Google is just perfecting its established  AR and waiting to have a monster release of a product that’ll be too amazing for most people to ignore. Amazon is at a clear disadvantage due to the priorities established in its business model compared to the business models of actual tech companies. Because of this difference, technology companies can dedicate their time and resources to improving products while  Amazon is happy to have a hot product until it quickly becomes obsolete.

Think about it, when is the last time someone bought a Kindle e-reader? I imagine Amazon Fire’s product life will parallel that: big explosion and quick fizzle out.

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Teerah Goodrum (@AisleNotes), is a recent Graduate of Howard University with a Masters degree in Public Administration and Public Policy. Her time on Capitol Hill as a Science and Technology Legislative Assistant has given her insight into the tech community. In her spare time she enjoys visiting her favorite city, Seattle, and playing fantasy football.

Featured image courtesy of [Billy Brown via Flickr]

Teerah Goodrum

Teerah Goodrum is a Graduate of Howard University with a Masters degree in Public Administration and Public Policy. Her time on Capitol Hill as a Science and Technology Legislative Assistant has given her insight into the tech community. In her spare time she enjoys visiting her favorite city, Seattle, and playing fantasy football. Contact Teerah at staff@LawStreetMedia.com.

The post That Amazon Fire Phone You Pre-Ordered is Already Outdated appeared first on Law Street.

How many times do we check online reviews of a product before choosing to buy it? Reviews are important for many consumers to make sure they are spending their money on something that is of good quality. But can companies really sue customers for posting a negative review of a product on an online forum?

After posting a negative Amazon review of a Mediabridge brand router, a Florida man recently received a letter from Mediabridge’s lawyers threatening a lawsuit. The company claimed that the review contained false information intended to hurt its reputation and that the man’s statements could be considered slanderous. The company went on to warn that it would sue the man unless he removed his review, stopped purchasing Mediabridge products, and ceased future discussion of the company on the internet.

Can companies really sue individuals over their negative reviews on the internet?

Legal precedent works in favor of the companies. For example, Virginia courts heard a case in 2012 of a similar issue on Yelp and Angie’s List. A retired military captain living in Fairfax County posted a negative review of a contracting service on Yelp and Angie’s List claiming that not only was the service poor, but also that she was billed for services that weren’t performed, and the contractor may have also stolen jewelry. The contractor, Christopher Dietz, sued her for $750,000 for defamatory remarks on an internet review site. Dietz argued that the reviewer’s statements were false and that her negative review impacted his business and reputation. The court held for the contractor. The case was later overturned by the Virginia Supreme Court.

How could this affect consumers?

Providing real insight into the quality of goods and services is the purpose of consumer reviews. It is helpful to read positive reviews in order to make a wise purchase, but negative reviews are also important to warn others of faulty products and poor service. If consumers realize that they can be sued over their critical comments about products, however, many may not be truthful or even write reviews at all anymore. Consumers have a right to know information about the quality of a good o service before they spend their money, but if people are deterred from sharing this information for fear they may create legal trouble for themselves it will become much harder for consumers to make informed decisions.

Can consumer reviews be protected?

Companies like Amazon need to step up to protect their customers. According to Amazon’s terms of use, product sellers are not allowed to demand consumers remove their reviews. These terms are there for a reason: Amazon wants customers to freely critique the items they have purchased through the site. If companies threaten customers with lawsuits over negative reviews, then Amazon needs to step in.

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Sarah Helden (@SHelden430)

[National Journal] [TIME] [Amazon]

Featured image courtesy of [Wikipedia]

Sarah Helden

Sarah Helden is a graduate of The George Washington University and a student at the London School of Economics. She was formerly an intern at Law Street Media. Contact Sarah at staff@LawStreetmedia.com.

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This may be the one of the only stories you see about Amazon today that does not involve a mention of drones. But as sexy as that drone story might be, what else is happening with the retail giant has the potential for a much more immediate and far-reaching impact.

For years, Amazon has gotten away with not charging state sales tax. They have a few different tactics to avoid these taxes. The most popular is a constitutional argument. The constitution prevents states from interfering in interstate commerce. Multiple Supreme Court cases, included National Bellas Hess v. Department of Revenue and Quill Corp. v. North Dakota have affirmed this, stating that unless a company has a physical nexus in a state, they do not have to collect sales taxes. Of course, the Constitution, as well as both Bellas Hess (1967) and Quill (1992) were written before something like Amazon could be imagined. During the time of Hess and Quill, mail-order companies existed, but the potential of Internet shopping had not yet been realized.

Jeff Bezos, Amazon’s CEO has said that Amazon would be perfectly happy to collect sales taxes, but has claimed that local sales taxes are outdated and complicated. In 2008, he complained, “that local tax collection was so ‘horrendously complicated,’ that it imposed ‘an undue burden’ on his company.”

Amazon also plays dirty to avoid collecting sales taxes, essentially holding states hostage. For example, Amazon will announce that they are building a distribution center or warehouse in a particular state. But, in South Carolina, unless the state agreed to pass some sort of special agreement or law to exempt Amazon from collecting sales tax, they would cancel plans to build that warehouse. This led to a Catch-22 situation for South Carolina—either they could exempt Amazon and lose revenue, or they could lose much-needed jobs.

Texas had a similar story. When Texas attempted to make Amazon collect sales tax, they fired workers and shutdown their warehouse that employed 119 people. Often states or local municipalities create a deal rather than enter into an expensive fight with Amazon. For example, the three small municipalities in Texas that will be future Amazon warehouse sites have agreed to rebate significant portions of sale taxes collected—up to 85%–back to Amazon.

It is estimated that states lost more than $23 billion last year because of Amazon (as well as other online retailers). Well, this trick is becoming less popular—Amazon does collect sales taxes in 16 states now.

This large debate has turned into a series of lawsuits. Most recently, the New York Court of Appeals ruled that while Amazon had no nexus in that state, Amazon’s affiliations with third-party retailers that are based in New York and receive commissions meet the nexus benchmark and necessitate that Amazon should be collecting sales tax. Today, the case took another twist when the Supreme Court decided not to get involved in the states’ efforts.

Amazon, drones or no drones, has certainly revolutionized the world of not just online shopping, but shopping in general. By not charging sales tax, Amazon is able to undercut the prices of their competitors with physical stores who do have to adhere to state laws. It is clear that Amazon has been cheating states out of millions of dollars. It’s about time they pay.

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Anneliese Mahoney (@AMahoney8672) is Lead Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

Featured image courtesy of [Wvfunnyman via Wikipedia]

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

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