Amazon Accused Of Practicing Pirate Capitalism

2013/12/02

This seems a little odd really, an accusation that Amazon is practicing a form of pirate capitalism. When in fact, looking at it all the right way around it would appear to be an organisation solely devoted to the welfare of its customers. Not all that much piratical about that.


As the background to the story there are one of two things the company might be doing that don’t sound all that fair:

“Lush does not allow Amazon to sell its products and its co-founder, Mark Constantine, is extremely critical of the way the US company operates. But when visitors to Amazon type the word “lush” into its search field, they are directed to alternative cosmetic products that the online giant suggests they might like to buy instead.


Now Lush is taking Amazon to court, claiming it is infringing its trademark.


The court case will tell us whether that trademark is indeed being infringed. And I guess it could go either way: diverting people away to other products based upon the keyword could be infringement. Or it could be that since they don’t allow Amazon to sell their products then the company has every right to suggest alternatives to things it’s not allowed to sell. But it’s the larger complaint that interests me here, this idea of piratical capitalism:

“Constantine said Amazon’s alleged infringement of Lush’s intellectual property was a “way of bullying businesses to use its services and we refused”. In an interview in the New Review examining how Amazon operates, he said: “We’ve been in the high court this week to sue it for breach of trademark. It’s cost us half a million pounds so far to defend our business. Most companies just can’t afford that. But we’ve done it because it’s a matter of principle. [Amazon] keeps forcing your hand and yet it doesn’t have a viable business model. The only way it can afford to run it is by not paying tax. If it had to behave in a more conventional way, it would struggle.”


That allegation just doesn’t make sense in the slightest. No one is accusing Amazon of not paying employment taxes for example, or business rates. The only one that Amazon is even accused of dodging is corporation tax. That is, a tax on profits. And as long as a company can continue to finance itself there’s no reason at all why a model that doesn’t produce profits is unsustainable.


“He suggested that the internet giant was promoting a form of outmoded capitalism that was shunned by many consumers.


““It’s a form of piracy capitalism,” Constantine said. “[Amazon] rushes into people’s countries, it takes the money out, and dumps it in some port of convenience. That’s not a business in any traditional sense. It’s an ugly return to a form of exploitative capitalism that we had a century ago and we decided as a society to move on from.”


And the problem with that is that it’s an even more nonsensical view of the company. For Amazon doesn’t take things out of anywhere. For, as those will good memories will recall, the company doesn’t make profits globally. Indeed, it’s stated aim is not to make profits as yet. And if you’re not making profits then you cannot be sucking the money out, can you? Rather, all of the capital, the expertise, the knowledge and the effort is being devoted to making the shopping experience for Amazon’s customers better. Which really cannot be described as anything piratical. For, you know, pirates used to come abroad and take things away. Virginities, jewels, booze, thjese sorts of things. And Amazon is not doing that, quite the opposite, it’s actually delivering things people want cheaper than they can get them elsewhere.


All of which is most un-piratical.


(Source: Forbes.com)