The Everything War': Inside Amazon with author and Wall Street Journal reporter Dana Mattioli

Dana Mattioli

What I hope this book does is that it lifts the veil on a purposefully secretive company that it reveals to readers just how Amazon wins all the time and shows instances of how Amazon has its fingers on the scale.

Todd Bishop

Welcome to Geekwire. I'm Geekwire co founder Todd Bishop. This week, the Everything warm, Amazon's ruthless quest to own the world and remake corporate power. That's the title of a new book about the company by Wall Street Journal reporter Dana Mattioli, who joins us on this episode. Dana, it's great to see you.

Dana Mattioli

Great to see you as well. This book is a real page turner. I know I'm not the prototypical reader of yours in that regard and that I follow Amazon really closely, but it's a read that I've really enjoyed. It started with a grabber in the introduction, in the author's note, you explained the process that you went through to report this book. You spoke with more than 600 people and you list the types of people you spoke with, including current and former Amazon employees.

Todd Bishop

And then you said this. The book includes dozens of hours of interviews with 17 current and former s team members. That's the senior leadership team at Amazon. All of them conducted without the company's knowledge, and interviews with five current and former board members. I got to say that caught my attention right out of the gate.

Tell me about the process, first, of reporting this book. Yeah, I will say this is a meticulously sourced book. I spent three years reporting it. When I first started it, I wasn't pregnant. I now have a two and a half year old.

Dana Mattioli

To give you some scope here. And my focus at the Wall Street Journal, where I'm the lead Amazon reporter, has been to really do deep dives, investigations into Amazon. And that's what was the basis for the backbone of this book. Like I say in the author's note, and that might be an undercount, we had hundreds of pages of internal documents that I used to report this book. So many sources spoke to me and I tried to get as many of them as I could on the record.

You know, it's a damning look inside Amazon's business practices. And I knew in order to put that out in the world, it needed to be bulletproof. In terms of my sourcing, what was. Your interaction like with the company itself? Because as you write, it's not a product of access journalism.

Todd Bishop

And yet you did communicate with them. I kept marking the places where it was you stating something that was clear and definitive and well sourced and then Amazon specifically denying it, a spokesman said that was not true. What was it like interacting with the company in the process of reporting and writing this book? Yeah, this was definitely not a product of access journalism. But to be fair to the company and to be accurate, I did a full walk through many, many, many hours of calls with Amazon's pr to share my reporting, to tell them how I was couching things and give them the opportunity to provide comments or pushback or background.

Dana Mattioli

And I incorporated that pretty generously throughout. As you know, you've been documenting many of these things in the Wall Street Journal, but the book goes much further. Can you summarize at a high level what you learned about the company and were able to report in the book that people who might be close readers of the Wall Street Journal might not know already? Yeah, the book goes far beyond the reporting. And what I realized in investigating the company with the journal was that it was just too much to ever fit into a 2000 word article.

Right. There was just so much more. And I think once we announced that the book was coming out, the inbound of tips and documents just really helped bolster the project. I'll say. There's like a bunch of different reveals in the book.

We do get into different business tactics, like Amazon's propensity to look at data that it has access to because it's one of the predominant companies across industries, to self preference or get an edge. That builds on some investigations into its private label team where they were snooping on third party sellers to get their internal data and create bestsellers for Amazon private label and undercut them. I also get into the use of Amazon's access to data throughout its deal making and venture capital arms. I think some of the really gripping story detail these founders and entrepreneurs who go to Amazon in good faith negotiations to be acquired or to get an investment through the Alexa fund. And there's a pattern that plays out where they share all of their information and people throughout Amazon's organization show up that stand to benefit from that information, and it winds up getting used the same at the Alexa voice services part of the business.

I also think there's some really fascinating details on Amazon's government relations push as the company comes under assault for destroying Main street, the mall competition. They make a really concerted effort to change the narrative, and with very mixed success, they bring in a heavy hitter, Jake Harney from the, you know, the Obama administration. And he proves mostly useless, especially with the Biden administration where he had a lot of friends. Right? So there's a lot in this book to unpack a lot of reveals that go way beyond the reporting.

Todd Bishop

So let's start with one story that's been really fundamental to your reporting at the Wall Street Journal, and which, as you say, goes further in the book. And that is the ability of people inside Amazon who are working on Amazon's own private label brands in the past to access the data about third party sellers and use that to inform their decision making and their strategic moves related to their own products. This is something that has been the subject of congressional inquiries. It's something that Amazon has really carefully parsed in its statements. What did you learn through your reporting for the book about Amazon in terms of this practice?

Dana Mattioli

It's really fascinating. I learned Amazon, even though they're one of the biggest, most sophisticated companies in the world, has very primitive firewalls in place to protect confidential data. And that's not just limited to private label. I heard this in other areas of the company, too, as well as especially its venture capital arm. One person that worked on this team told me that during due diligence, everything went horribly wrong.

There's an anecdote in the book on that front, where a founder who's meeting with the Alexa Fund for an investment sets up a data room and she puts all of her proprietary information in that data room for Amazon to look at, the Alexa fund to look at. And she worked in private equity, so she was wise to the right use of data. She set up a system to make sure that no one outside of who's supposed to access it, accesses it, because, you know, Amazon's also her competitor. So it's an uncomfortable situation. She learned almost immediately that there are people throughout the Amazon organization not affiliated with the Alexa Fund team looking at her proprietary documents.

And she went to speak to a lawyer about what she could do there. But people are afraid to sue Amazon. So, yes, this happened on the private label team, this happened on the Alexa fund team and in other areas as well. And as one employee told me, she said the company still had operated in this really startup way, meaning you often had access to data for your job that you didn't need access to. When you're moving fast, you're not really thinking clearly about, well, how do we make sure that only the right people have access to this data set?

The internal infrastructure of the company is basically popsicle sticks and like duct tape. After the book came out this week, I asked Amazon for comment on the various topics that I discussed with Dana Mattioli. And I'll be sharing the company's responses at various points in this episode on this topic, an Amazon spokesperson said, we do not condone the misuse of proprietary confidential information and thoroughly investigate any reports of employees doing so and take action which may include termination. We have strict policies in place and keeping proprietary information secure is embedded into how the team operates, end quote. Do you feel like through your reporting, through congressional scrutiny, through regulatory action now by the FTC, Amazon has sufficiently addressed this practice?

I think it's really interesting. I don't think so. You know, they've tried to deny that the company is behaving in this way on the private label side, which I think at this point is just indisputable. I mean, my reporting has been backed up by regulators with subpoena power that found this. Right.

So it's weird for them to deny this. You know, what's strange to me is that they claim that they did this internal investigation into the practice and they didn't find anything, but they won't share that investigation. That allegedly clears their name with Congress to the point where Congress had to ask the Department of Justice for criminal referral around this practice because they won't share the data. It just seems strange to me that a company that apparently did an internal investigation that would completely clear its name wouldn't share something like that. And one of the things that you report in the book is that the investigation was done in a manner that it could be protected by lawyer client privilege.

Todd Bishop

And Amazon cited that in saying to Congress that it did not want to provide the details of the investigation. Yeah, they very methodically conducted the investigation using outside lawyers to have attorney client privilege so that it couldn't be subpoenaed or they wouldn't be forced to share it. And that's exactly what played out. Amazon's spokesperson said this week, quote, we use publicly available data to inform our strategy in service of providing the best experience for our customers. But we draw a clear line against using non public, seller specific data to compete with sellers.

And our policy goes further than any. Retailer we know of. We take this policy seriously. We thoroughly train on it. Audit and investigate any reports of violations.

Public allegations of policy violations have been based on misunderstandings and not on credible evidence. Any suggestion that there was pressure from Amazon executives to violate this policy in developing our private brands is flat out incorrect, end quote. My takeaway, and correct me if I'm wrong on this, was that it was not a situation where Amazon's leaders, like Jeff Bezos specifically went to people on the Amazon private label team, for example, and said, hey, go grab that data. That'll help you perform better. It was more of the culture and the ambition of the leaders that translated into that kind of activity.

Todd Bishop

And it struck me. You compared this in the book to what happened with Wells Fargo, where the goals of the corporate leaders translated into bad activity by people who were opening millions of deposit and credit card accounts without customers knowledge. And you write a culture of unattainable goals, the risk of losing their jobs and turning a blind eye to bad behavior created a perfect storm for rampant misconduct. Do you think Jeff Bezos, Andy Jassy, other leaders of the company now and past, have a full sense yet for how their culture has translated into the tactics and the activities of their employees in this way? I don't.

Dana Mattioli

I have to say, I've covered companies for nearly 18 years at the Wall Street Journal, and this culture is so different from any company I've ever covered. And I think some of the senior leaders aren't just aware of how much pressure that this environment creates for their employees. And that's why it reminded me of Wells Fargo. It wasn't like the CEO of Wells Fargo was saying, open up all these accounts. Don't tell the clients.

Right. I think when you set up a culture where some people describe it, a little bit like the Hunger Games, where you have to perform and you're competing against equally brilliant employees every day, and none of you want to be in that bottom 6%, none of you want to risk getting cut before you get to your restricted stock units. That it does incentivize some people to do things that they're not supposed to do. And Jeff Bezos is not directly telling them to do that, of course, but. It happened on the question of the company's culture and the impact on its employees behavior.

The Amazon spokesperson said, this is false and not supported by any material the author has presented. Amazon's culture centers on innovating for customers to make their lives better and easier. End quote. One place where Jeff Bezos approach did have a very specific impact on the company's tactics and strategy was in social media. And I want to talk about that when we come back.

Todd Bishop

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Todd Bishop

Welcome back. It's Todd Bishop. I'm talking this week with Dana Mattioli, the author of the new book the Everything War, Amazon's ruthless Quest to own the world and remake corporate power. So, Dana, toward the end of the. Book, I have to say some of.

The biggest page turners for me were the inside stories of what was happening in the Amazon conference rooms where Jeff Bezos and others were directing employees to respond to the likes of Bernie Sanders and Jeff Bezos himself, later getting into a public Twitter spat with President Biden, or at least President Biden's Twitter account. How would you describe Jeff Bezos approach to social media? It's funny. One of the things that I found most surprising in reporting out this book is how thin skinned Bezos could be for this public figure billionaire. There are situations where he's just really upset and angry and feels misunderstood.

Dana Mattioli

He doesn't understand why politicians or regulators are criticizing the company for its business practices or its treatment of warehouse workers. And there's a scene where they just kind of lose the plot a bit. It's around the time where the Alabama workers are trying to unionize in the warehouses, right? And there's a lot of attention on this, Amazon's notoriously anti union. And Bernie Sanders writes that he's going to go to Bessemer where there's the organization efforts.

And this really gets under the senior leadership team's skin. And it's kind of funny to me because the amount of net worth on these conference calls to devise nasty tweets to senators is kind of comical. There was one tweet in particular where Dave Clark, who was then the head of Amazon's consumer business, said, quote, I often say we are the Bernie Sanders of employers, but that's not quite right because we actually deliver a progressive workplace for our constituents, a $15 minimum wage, healthcare from day one, career progression, and a safe and inclusive work environment. There is a pattern here. And in fact, I think I could go back to some of Amazon's executives tweets and some of Amazon's corporate account tweets.

Todd Bishop

It's like you can hear the voice of Jeff Bezos behind some of this. Stuff, stuff even in some comments from PR and stories, he was like kind of tinkering behind the scenes. This is very much in the voice of Bezos from what I'm told. He was like one of the lead architects of this tweet. They spent a lot of time on this series of tweets and what's interesting to me is that these tweets came at a time when Amazon was under immense scrutiny about its business practices.

Dana Mattioli

Whether it's a monopoly, the tide was turning, or it had turned. And the DC team is trying to mend bridges and make connections on the hill and thwart litigation that could break Amazon up or hurt it. And they had a process called watering the flowers, where they were trying to make friends and influence people on the hill. And then Jeff and his team would often come in and just stomp all over those flowers and send mean tweets to people that this team was trying to cozy up to, and it just undermined the efforts. And you write about Brian Huisman, who's a key policy executive in Washington, DC for Amazon, and him having to text an apology to one legislator that he had made friends with, and that congressman just sort of not responding, sort of ghosting him.

Do you think that Bezos and team. Realized the damage they were doing to the efforts of the DC team to make nice with policymakers and legislators? I don't think they did realize that. I spoke to someone involved in the tweets, to Bernie, and then it was Elizabeth Warren and then Congressman Pocan. And I said, like, were you not concerned about what they would think of these tweets?

Dana Mattioli

And basically the person said, Bernie Sanders couldn't hate us any more than he already did. I was like, but that's not what it's about. What about the perception? Because other people saw those tweets, other senators saw those tweets, other congresspeople. And I don't think they were thinking that far in advance.

They just wanted to win the battle on Twitter. Right. But I could tell you the DC team was pissed about these tweets because then they had to go and try to patch things up. I have Bryan Husman's tweet to Congressman Pokan, and he's kind of growling a bit and embarrassed about the behavior of the leaders on the team, and he's never heard back. It's almost like they blew up a relationship in 40 words.

Todd Bishop

And you mentioned earlier, Jay Carney, who was the press secretary under President Obama, had also worked previously for then vice President Biden. And a lot of the assumption when Amazon hired him into a top policy position was that he would have inroads into the White House. First off, in 2016, like much of the rest of the world, Amazon was shocked when President Trump was elected. And that was the first setback for Carney in those efforts. But then, even after Biden got elected.

There was a much frostier relationship, I think, based on some of your reporting. Much to Jay Carney's surprise, he was not able to have the sway with the Biden administration that he thought he would. Yeah. Carney could not get a meeting for Jeff Bezos and Biden at the White House if his life depended on it. I mean, Bezos became Persona non grata at the White House partly not because of Jay, partly was because of tweets like we later see in the book directed at the Biden administration.

Dana Mattioli

And there's scenes in the book where Jay is really frustrated because a lot of his close colleagues and friends are in the cabinet for Biden or have powerful positions. And I have scenes where he's texting Ron Klain, the chief of staff. President Biden kind of begging for Amazon to be included on roundtables about the economy, job creation, and the White House is just not receptive. And in some ways, the Biden administration, even though it didn't have the combative stance of the Trump White House and the nasty tweets, was much more detrimental to Amazon than Trump. And it really stung Amazon that Biden embraced, literally.

Todd Bishop

The leader of the Amazon labor union, Chris Smalls, who had been at odds with Amazon, invited him to the White House when he didn't invite Jeff Bezos. Also, the White House would frequently talk with Walmart and their CEO, Doug McMillan. And there's a great quote that you have in there from a White House official saying Bezos had been very publicly critical of the president in a way that Doug McMillian wasn't. It's much easier to have a conversation with someone who's not out there kicking the shit out of you. It's hard to pick up the phone to talk to somebody and have a candid conversation with him when that's their public posture.

And that's not a long time ago. I mean, that's relatively recent, within the past couple of years. And it kind of set the stage for the current posture of the Biden administration in the form of the FTC toward Amazon. Yeah, it's funny, after the whole pee in the bottle tweet incident with the senators, Amazon took a step back and Bezos kind of took a step back from tweeting, but it didn't last long. He then goes on and criticizes the Biden administration pretty vocally.

Dana Mattioli

The White House definitely took note and they really did cozy up to the Walmart executive team, including Doug McMillan, which was playing a more traditional Washington long game and having more diplomatic relations with the White House. And I think it's just really indicative of this pugnacious approach to PR, to government relations, to the way they compete that bleeds through the company in a lot of respects and maybe in places that it traditionally wouldn't at other companies. And the pee in the bottle tweet, for those that didn't have the pleasure of following that story, was a response to another legislator who had questioned Amazon's practices and cited the widely reported fact at the time that some of their drivers had to pee in bottles. Amazon cluelessly replied as if that had never happened and later had to walk that back. And it was embarrassing.

Todd Bishop

And to your point, it seemed like for a moment at least, they realized the damage that they were causing. Yeah, I think that's right. I think they were really embarrassed about the pee specific tweet that episode. But the change in behavior really did not last long and it burned bridges. And what you see, and I don't think this is a direct cause of this at all.

Dana Mattioli

But Biden put Lena Khan as the chair of the FTC, which is like this seminal moment in antitrust history. And it's like arguably like he hand picked the worst person to regulate the agency overseeing Amazon for Amazon. He's notoriously pro union when Amazon is not, and he's a big backer of this new antitrust approach. I just think that the Biden administration has proved really challenging for this company. And in that way, the book comes full circle.

Todd Bishop

You start with Lena Khan and tell the story of this law student who has a breakthrough moment with a paper, and then you conclude with the recently filed FTC lawsuit against Amazon. And I want to talk about that when we come back. You're listening to Geekwire and we will be right back.

Welcome back. It's Todd Bishop. You're listening to the Geekwire podcast and my guest this week is Dana Mattioli. She is a reporter for the Wall Street Journal and the author of the new book the Everything War, Amazon's Ruthless Quest to own the world and remake corporate power. It is out on April 23, published by Little, Brown.

Dana, you start the book with the story of Lena Khan and this landmark law Review article that she wrote about Amazon's antitrust paradox. I appreciated your book, not just for the fact that I got these juicy inside details about Amazon, but frankly, you filled out my understanding of the evolution of antitrust law in a way that I hadn't fully understood before. There's something about just reading chapters about something as opposed to reading bits and pieces of articles here and there that gives you a much more comprehensive understanding. How would you describe what Lena Khan brought to the discussion of antitrust and specifically to Amazon with this article? I mean, it's sort of remarkable.

Dana Mattioli

Lena Khan, when she wrote this article, was a 27 year old law school student that no one had ever heard of. And, you know, most people don't just casually read law review articles. It's usually they have a very small base of readers, academics, hundreds of people, not thousands or millions. Right. She had spent some time at a think tank in DC called Open Markets Institute after college.

Didn't really go into it knowing much about antitrust, but learned about it because this was an anti monopoly think tank. And during the course of her time at open markets, she came up against Amazon a lot. She started researching the company and she started seeing parallels between Amazon and Jeff Bezos and Standard Oil and John Rockefeller. So, like this gilded age monopoly that was broken up by the Supreme Court. And to Lena, it just seemed so strange that people weren't questioning Amazon's power at this period of time.

So she starts gathering some reporting and speaking to hedge fund managers and competitors to Amazon and putting together some writing. But then she gets into Yale Law school and she has to kind of shelp it, but she can't let this go. And over the course of her time there, she fleshes the rest of it out in this really seminal Law review article. And what's amazing here is that, like I said, she's an unknown, but this article strikes such a chord. It's like lightning in a bottle.

It goes viral and people start really discussing the possibility that Amazon could be a monopoly. They start questioning, is it okay that it has the majority of e commerce in the US? Is it okay that it runs the world's biggest online platform for e commerce and also competes on it? What's happening with all that data? And it really starts the conversation in a way that it wasn't happening before.

It was almost like she was this Ida Tarbell to Amazon. It's funny you should say that. I was going to bring up Ida Tarbell later. I actually, coincidentally have been reading a book about Ida Tarbell's reporting on John Rockefeller and Standard Oil. You referenced Ida Tarbell in your book.

Todd Bishop

It's interesting. Her stuff started as magazine articles and turned into exposes in the form of books. Did you learn anything or take any inspiration from her work in your work on Amazon? In this book? You know, I think I read the same book as you, and I think it was remarkable what she was able to dig up.

Dana Mattioli

And in reading Ida's investigations, there were some parallels between what she found with Standard oil and what Lena found with Amazon. Was it taking on the trust? Is that the book that. By Steve Weinberg? Oh, no, it's not.

I need to get that one. Yeah. So that book is much more focused on the journalism. I think I might know the other book you're referencing. It's more of like a.

Todd Bishop

Almost like a biography. A compilation of all of her taking on the trust. Yeah, taking on the trust. Okay. It's like if you read Titan and then taking on the trust.

Dana Mattioli

I love Titan. Yeah. You know, Standard Oil, when they were broken up, it was for something called restraining trade. But basically some of the behaviors that the Supreme Court found was that they were like bribing rail officials to get kickbacks, but they were also doing things like spying on their competitors. Even though this is not the digital age, they had, like, near perfect intel on the oil refining environment because of how big they were.

And that's a theme that comes up in my reporting for Amazon, for sure. Private label Alexa Voice Services, the Alexa Fund. One of the tactics that Standard Oil was also criticized for was predatory pricing and also forcing competitors to sell to them under the threat that if you don't, then we'll put you out of business. And there's a scene in the book where Amazon also threatens predatory pricing toward diapers.com and says, if you sell to someone else, we'll cut the price of our diapers to zero. Which brings it to its knees.

Right. So there are some parallels here. And then also this is just in my own research I found interesting is that John Rockefeller and Bezos had absentee itinerant biological fathers. Rockefeller's dad, as you know from reading the book, was a literal snake oil sales. Oh, yeah.

Todd Bishop

Yeah. And he had another family in a different part of the state or the country. And Jeff Bezos dad famously was not involved in his life. I think he was in the circus. Right.

Dana Mattioli

And I think that also gives CEO's this drive sort of prove themselves. Right. So there are some parallels there. And at a high level, there are a number of parallels between Amazon and these trusts that were the target of government regulators and led to the phrase antitrust back in the industrial revolution. And the common themes are you've got a company that builds up vast power and uses that to extend into new markets and also to create leverage over those that it interacts with such that they don't feel empowered to challenge or question or act independently.

Todd Bishop

In the face of that power, and you see that come through in a number of different ways in the book. Am I getting the big picture themes correct? There's. Yeah, you are. Part of what makes Amazon so interesting is that it's not just a market leader in retail.

Dana Mattioli

It's a market leader in so many different industries, cloud computing, smart devices, logistics, and it's a top one, two, or three company in a staggering number of industries. Which means that it has just so much leverage in negotiations because even its competitors have to work with it in some respect. You know, HBO needs to be on the fire tv stick, and people need its cloud services. And just the vast number of tentacles it has and how companies need to partner with one, two, or three tentacles that makes them have all the leverage in negotiations. And there's scenes in the book where that gets abused.

Amazon's spokesperson disputed the comparison to Standard Oil. Quote, Standard Oil trust controlled roughly 90% of the refined oil in the United States. Amazon accounts for about 4% of us retail. Any comparison of the two companies is not based in reality. End quote.

Again, that stat cited by the company is 4% of all us retail. Antitrust cases often hinge on market definitions. And I would add as further context. That Amazon represents about 40% of us e commerce sales, according to data from emarketer. I was really struck by the concluding chapters about the FTC lawsuit.

Todd Bishop

You scrutinize Lena Khan very closely as well, and point out the challenges that she's had inside the FTC, a lot of the pushback, and point out that even though she had this landmark law review article, the ultimate case that the FTC brought did not rely on the fundamental shift that Lena Khan proposed in that article about not focusing as much on consumer prices and the fact that companies should still be scrutinized even if they're lowering prices. The FTC's lawsuit really brought out these other principles in the case. Yeah, it's funny. The lawsuit that the FTC filed against Amazon differs so much from that 2017 paper that she wrote. The 2017 paper alleges that Amazon, among other things, is a predatory pricer, that it prices things low to try to put people out of business, whereas the FTC case against Amazon in 2023 is that Amazon is raising prices for consumers not only on Amazon.com comma, but because it's so powerful across the online economy.

Dana Mattioli

So those are two very different claims. Right. And her critics were quick to point that out. They're like, well, we can't have it both ways. I've spoken to people about that to understand where the discrepancy lies.

And they say that when Lena was investigating Amazon for her paper, it was doing that between 2014 and 2017, when it ran right, and that Amazon at that period of time was engaging in some predatory pricing. It was undercutting the market in order to steal share from rivals and set it up in this perch. And the Amazon that the FTC sued in 2023 was no longer building its monopoly through predatory pricing. It was the monopoly. And once you become the monopoly, you could charge what's called monopoly rental because companies like you name it, Toys R Us, Circuit City, most of the department stores don't exist anymore, and you have less competition, you then can raise the prices.

You could charge more fees. And they say that that's the version of Amazon that's depicted in this lawsuit. And this comes through in the fact that upwards of 50% of the revenue that many third party sellers generate on Amazon ends up going to Amazon in the form of a variety of fees. Amazon's made small tweaks. They've made it so people don't necessarily have to use their fulfillment by Amazon service to get the prime designation, but they've been small tweaks around the edges.

Todd Bishop

And you therefore have this dynamic. And it's kind of counterintuitive because Amazon would say, wait a second, we're very much into low prices. We're trying to get as low of prices as possible. Can you describe that pricing dynamic and how that works? Dana?

Dana Mattioli

Sure. The FTC is alleging that because sellers know they need to be on Amazon, 40% of all e commerce in the US happens there, that Amazon is able to levy all sorts of fees on them. And that's exploded in recent years. So these services that Amazon deems optional, like advertising or being on fulfillment by prime, that come with fees. Sellers say that you really need to use both of them in order to be successful.

And the upshot of that is that Amazon now takes $0.50 for every dollar in revenue that a seller makes on Amazon. And that's up a lot from just a few years ago, it was 19%. And as a result of that, sellers have had to raise their prices for consumers to offset all the fees. And I have an example in the book that was kind of staggering to me. It's this company that makes buckets and other industrial goods.

And I spoke to the CEO. He does $10 million a year in revenues on Amazon. Okay? He pays Amazon $1.5 million each year in commissions, another $1.5 million each year in advertisements to show up in search. And this is just wild to me.

After all the cost of doing business on Amazon, shipping items, paying his employees cost of goods, his Amazon revenues become just $30,000 in total profits after taxes. And what does he have to do? His buckets that he sells for $3.90. He has to sell for dollar 30 on Amazon. So that's like a direct way it plays out.

What the FTC is saying is that because people like him are raising their prices to offset the fees and because you have to use the Amazon low price as your floor everywhere else, it means if you're selling that bucket on Walmart or target, you also have to sell it for dollar 30 or more. Otherwise, you're not in compliance with Amazon's terms and you could be kicked off the site. On the FTC lawsuit, Amazon's spokesperson said, quote, the company fundamentally disagrees with the FTC's allegations because they are wrong or misleading and they would harm consumers and independent businesses. Regarding Dana Mattioli's book, the company said, overall, quote, Amazon's success is the result of continually innovating for consumers and small businesses over three decades to make their lives better and easier every day. The facts show Amazon has made shopping easier and more convenient for customers, spurred lower prices, enabled millions of successful small businesses, and significantly increased competition in retail.

End quote. Dana, in the end, where does this leave us? Because you've got this powerful company, and one of the things you point out is that even if they were to be broken up by the government, many of the individual pieces would be just as valuable, if not more valuable, on their own. What can we take away from the book? What you found and what's next for Amazon and for commerce broadly?

Dana Mattioli

I think that if the government were to be successful here in a breakup, you could run into the standard oil problem, where it was broken up into 30 something companies by the government, and then each of those companies became the predominant company in their industry in their own rights. It made the exxons of the world right. So it's not like the company Standard Oil lost any power in the end. It actually, the sum of the parts was greater than the whole. I mean, what happens next?

This lawsuit will play out over the course of years. It's not going to even go before a judge until 2026. I don't expect anything to change for shoppers in the interim. What I hope this book does is that it lifts the veil on a purposefully secretive company that it reveals to readers just how Amazon wins all the time and shows instances of how Amazon has its fingers on the scale, and I think we achieved a lot of that. Well, Dana Mattioli, thank you very much for speaking with us.

Thank you for having me. The book is the everything War, Amazon's ruthless quest to own the world and remake corporate power by Dana Mattioli. It's available wherever books are sold, which. Of course includes Amazon. See the show notes for more, including links to the book and to Dana Mattioli's reporting for the Wall Street Journal.

Thanks for listening. Be sure to rate and review the Geekwire podcast on your favorite podcast app. And if you're listening on Spotify, let's try an experiment. I'd encourage you to leave a comment with your reaction and thoughts on this episode in the Spotify app. Of course, you can also always email me@todeekwire.com.

Dot I'm looking forward to hearing and seeing what everybody has to say. I'm Geekwire co founder Todd Bishop. We'll be back next week with a. New episode of the Geekwire podcast.

Dana Mattioli

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The Everything War': Inside Amazon with author and Wall Street Journal reporter Dana Mattioli

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1: Introduction

2: Data Practices and Internal Culture

3: Amazon and the Regulatory Landscape

4: Corporate Power and Public Relations

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