We Have a Question for Jeff Bezos and Other Billionaires

Will you finally let your workers unionize?

As this was unfolding, most of Big Tech, including Amazon, sent white-collar workers home to “flatten the curve” and fight the pandemic. Tim saw company leadership go to great lengths to make sure this new system was working and actively seek feedback from the remote workers. Christy heard from a warehouse employee who said productivity targets made it difficult for workers to take a break even for hand washing without a mark on their record. Pay for warehouse workers starts at $15 an hour with minimal access to time off; in May Amazon ended the unpaid leave policy that for a few weeks allowed them to stay home if they had Covid-19 symptoms.The contrast in the treatment of knowledge and warehouse workers couldn’t be starker. Equally clear is the cause: One group has power, the other doesn’t.

Amazon’s decision to fire the activists was easy to make in the United States, where Amazon workers have no union and are left to fend for themselves. With no right to paid sick leave or protection from unfair dismissal, American workers are among the most vulnerable in the world to pressure from any employer, not just Amazon.

Union-represented Amazon workers in Spain, Italy, France and Germany initially failed to resolve their concerns through negotiation, but with court action, regulatory intervention and strikes, they got their needs addressed.

Let’s look at France: Unions there brought a civil case arguing that Amazon had taken inadequate steps to protect workers from infection risk and that it had sidestepped the unions’ statutory role. The court ordered Amazon to limit its sales to only “essential” items, or face harsh penalties until it could reach a safety agreement with the unions. Rather than negotiate, Amazon closed its French operations and appealed. But the appellate court also sided with the workers, who ultimately negotiated a settlement including mandatory union consultation over safety measures, union hiring of external experts to assess the measures’ effectiveness and a continued increase in workers’ hourly pay. The news from Europe shows that Amazon can work with unions and get good results.

Both of us want Amazon to share the wealth with workers and stop putting the relentless pursuit of revenue growth ahead of all other concerns. One way or another, this requires putting more power in the hands of workers. Regulation and legislation are part of the solution. But there’s no need to wait; power can be taken, not just given. That’s what unions are for.

Amazon is a data-driven company. It should recognize the evidence showing that countries with more collective bargaining have a stronger social fabric and better growth, and are more able to weather economic ups and downs. Businesses with collective bargaining relationships, including Auchan Retail and Carrefour, navigated the Covid-19 crisis with less disruption to their businesses and emerged with their reputations intact and even enhanced.

For its own future and the future of the global economy, Amazon should become more responsive to the women and men who’ve enriched shareholders and be willing to recognize and bargain with their representatives. When it comes to the rights of its workers, it should be a leader, not a laggard.

It’s not just Amazon: The need for more unionization is urgent across Big Tech. Amazon stands out because it combines the extraordinary profit margins of these companies with employing hundreds of thousands of front-line workers. There are fewer of these workers at the other iconic tech companies, but nevertheless their employees also deserve a voice over the issues that matter to them.

The question for Mr. Bezos and the billionaires of the world is: Are they ready to rise to the occasion? Will Big Tech listen to and work with its employees to help the world overcome the worst economic and social crisis in recent history?

How AWS came to be

 

There are lots of stories about the formation of AWS, but this much we know: 10 years ago, Amazon Web Services, the cloud Infrastructure as a Service arm of Amazon.com, was launched with little fanfare as a side business for Amazon.com. Today, it’s a highly successful company in its own right, riding a remarkable $10 billion run rate.

In fact, according to data from Synergy Research, in the decade since its launch, AWS has grown into the most successful cloud infrastructure company on the planet, garnering more than 30 percent of the market. That’s more than its three closest rivals — Microsoft, IBM and Google — combined (and by a fair margin).

Chart from Synergy Research with Infrastructure as a Service market share.

What you may not know is that the roots for the idea of AWS go back to the 2000 timeframe when Amazon was a far different company than it is today — simply an e-commerce company struggling with scale problems. Those issues forced the company to build some solid internal systems to deal with the hyper growth it was experiencing — and that laid the foundation for what would become AWS.

Speaking recently at an event in Washington, DC, AWS CEO Andy Jassy, who has been there from the beginning, explained how these core systems developed out of need over a three-year period beginning in 2000, and, before they knew it, without any real planning, they had the makings of a business that would become AWS.

Creating internal systems

It began way back in the 2000 timeframe when the company wanted to launch an e-commerce service called Merchant.com to help third-party merchants like Target or Marks & Spencer build online shopping sites on top of Amazon’s e-commerce engine. It turned out to be a lot harder than they thought to build an external development platform, because, like many startups, when it launched in 1994, it didn’t really plan well for future requirements. Instead of an organized development environment, they had unknowingly created a jumbled mess. That made it a huge challenge to separate the various services to make a centralized development platform that would be useful for third parties.

So very quietly around 2000, we became a services company with really no fanfare.Andy Jassy, AWS CEO

At that point, the company took its first step toward building the AWS business by untangling that mess into a set of well-documented APIs. While it drove the smoother development of Merchant.com, it also served the internal developer audience well, too, and it set the stage for a much more organized and disciplined way of developing tools internally going forward.

“We expected all the teams internally from that point on to build in a decoupled, API-access fashion, and then all of the internal teams inside of Amazon expected to be able to consume their peer internal development team services in that way. So very quietly around 2000, we became a services company with really no fanfare,” Jassy said.

AWS CEO Andy Jassy speaking in Washington, DC in June, 2016.

At about the same time, the company was growing quickly and hiring new software engineers, yet they were still finding, in spite of the additional people, they weren’t building applications any faster. When Jassy, who was Amazon CEO Jeff Bezos’ chief of staff at the time, dug into the problem, he found a running complaint. The executive team expected a project to take three months, but it was taking three months just to build the database, compute or storage component. Everyone was building their own resources for an individual project, with no thought to scale or reuse. (I think you can guess where this is going.)

The internal teams at Amazon required a set of common infrastructure services everyone could access without reinventing the wheel every time, and that’s precisely what Amazon set out to build — and that’s when they began to realize they might have something bigger.

A perfectly wonderful awful idea

Jassy tells of an executive retreat at Jeff Bezos’ house in 2003. It was there that the executive team conducted an exercise identifying the company’s core competencies — an exercise they expected to last 30 minutes, but ended up going on a fair bit longer. Of course, they knew they had skills to offer a broad selection of products, and they were good at fulfilling and shipping orders, but when they started to dig they realized they had these other skills they hadn’t considered.

In retrospect it seems fairly obvious, but at the time I don’t think we had ever really internalized that.Andy Jassy, AWS CEO

As the team worked, Jassy recalled, they realized they had also become quite good at running infrastructure services like compute, storage and database (due to those previously articulated internal requirements). What’s more, they had become highly skilled at running reliable, scalable, cost-effective data centers out of need. As a low-margin business like Amazon, they had to be as lean and efficient as possible.

It was at that point, without even fully articulating it, that they started to formulate the idea of what AWS could be, and they began to wonder if they had an additional business providing infrastructure services to developers.

“In retrospect it seems fairly obvious, but at the time I don’t think we had ever really internalized that,” Jassy explained.

The operating system for the internet

They didn’t exactly have an “aha” moment, but they did begin to build on the initial nugget of an idea that began at the retreat — and in the Summer of 2003, they started to think of this set of services as an operating system of sorts for the internet. Remember, this is still three years before they launched AWS, so it was an idea that would take time to bake.

I don’t think any of us had the audacity to predict it would grow as big or as fast as it has.Andy Jassy, AWS CEO

“If you believe companies will build applications from scratch on top of the infrastructure services if the right selection [of services] existed, and we believed they would if the right selection existed, then the operating system becomes the internet, which is really different from what had been the case for the [previous] 30 years,” Jassy said.

That led to a new discussion about the components of this operating system, and how Amazon could help build them. As they explored further, by the Fall of 2003 they concluded that this was a green field where all the components required to run the internet OS had yet to be built — at which point I’m imagining their eyes lit up.

“We realized we could contribute all of those key components of that internet operating system, and with that we went to pursue this much broader mission, which is AWS today, which is really to allow any organization or company or any developer to run their technology applications on top of our technology infrastructure platform.”

Then they set out to do just that — and the rest, as they say, is history. A few years later the company launched their Infrastructure as a Service (a term that probably didn’t exist until later). It took time for the idea to take hold, but today it’s a highly lucrative business.

AWS was first to market with a modern cloud infrastructure service when it launched Amazon Elastic Compute Cloud in August, 2006. Surprisingly, it took several years before a competitor responded. As such, they control a vast amount of market share, at least for now. Rest assured, some very well-heeled competitors like Microsoft, Google, IBM and others are gunning for them.

When asked if he ever foresaw the success they’ve achieved, Jassy was humble, saying, “I don’t think any of us had the audacity to predict it would grow as big or as fast as it has.”

But given how the company carefully laid the groundwork for what would become AWS, you have to think that they saw something here that nobody else did, an idea that they believed could be huge. As it turned out, what they saw was nothing less than the future of computing.

Is Amazon Unstoppable?

Politicians want to rein in the retail giant. But Jeff Bezos, the master of cutthroat capitalism, is ready to fight back.

In 2017, a few months after Forbes named Jeff Bezos, the founder of Amazon, the world’s richest man, a rumor spread among the company’s executives: Bill Gates, the former wealthiest person on earth, had called Bezos’s assistant to schedule a lunch, asking if Tuesday or Wednesday was available. The assistant informed Bezos of the invitation, and told him that both days were open. Bezos, who had built an empire exhorting employees to be “vocally self-critical,” and to never “believe their or their team’s body odor smells of perfume,” issued a command: Make it Thursday.

Bezos’s power play was so mild that it likely wasn’t noticed by Gates, but within Amazon the story sparked a small panic (and, later, an official denial). Such a willful act of vanity felt like a bad omen. At Amazon’s headquarters, in Seattle, the company’s fourteen Leadership Principles—painted on walls, posted in bathrooms, printed on laminated cards in executives’ wallets—urge employees to “never say ‘that’s not my job,’ ” to “examine their strongest convictions with humility,” to “not compromise for the sake of social cohesion,” and to commit to excellence even if “people may think these standards are unreasonably high.” (When I recently asked various employees to recite the precepts, they did so with alarming gusto: “ ‘Frugality breeds resourcefulness, self-sufficiency, and invention!’ ”) A former executive said, “That’s how we earn our success—we’re willing to be frugal and egoless, and obsessed with delighting our customers.”

Amazon is now America’s second-largest private employer. (Walmart is the largest.) It traffics more than a third of all retail products bought or sold online in the U.S.; it owns Whole Foods and helps arrange the shipment of items purchased across the Web, including on eBay and Etsy. Amazon’s Web-services division powers vast portions of the Internet, from Netflix to the C.I.A. You probably contribute to Amazon’s profits whether you intend to or not. Critics say that Amazon, much like Google and Facebook, has grown too large and powerful to be trusted. Everyone from Senator Elizabeth Warren to President Donald Trump has depicted Amazon as dangerously unconstrained. This past summer, at a debate among the Democratic Presidential candidates, Senator Bernie Sanders said, “Five hundred thousand Americans are sleeping out on the street, and yet companies like Amazon, that made billions in profits, did not pay one nickel in federal income tax.” And Steven Mnuchin, the Treasury Secretary, declared that Amazon has “destroyed the retail industry across the United States.” The Federal Trade Commission and the European Union, meanwhile, are independently pursuing investigations of Amazon for potential antitrust violations. In recent months, inquiries by news organizations have documented Amazon’s sale of illegal or deadly products, and have exposed how the company’s fast-delivery policies have resulted in drivers speeding down streets and through intersections, killing people. Company insiders were accustomed to complaints from rivals at book publishers or executives at big-box stores. Those attacks rarely felt personal. Now, a recently retired Amazon executive told me, “people are worried—we’re suddenly on the firing line.”

Amazon executives were also concerned about dramatic changes within the company. In 2015, Amazon had roughly two hundred thousand employees. Since then, its workforce had nearly tripled. Bezos, now fifty-five, had transformed as well, from a pudgy bookseller with an elephant-seal laugh to a sleek, muscled mogul whose empire included a television-and-movie studio. (Bezos declined to be interviewed for this article.) Amazon executives comforted themselves with the thought that, even if the story about the Bill Gates lunch was true, at least their boss wasn’t reckless, like, say, Elon Musk or Travis Kalanick or Adam Neumann. Many admired Bezos’s dedication to his wife and children, and saw it as an embodiment of the company’s integrity. Still, they whispered, what if his flywheel has gone off track?

The notion of the flywheel—the heavy disk within a machine that, once spinning, pushes gears and production relentlessly forward—is venerated within Amazon, as Ian Freed learned on his first day of work, in 2004. Freed had initially glimpsed the power of the Internet as a Harvard student, when he guessed an e-mail address in Indonesia that led him to strike up a correspondence with the country’s minister of telecommunications. After graduating, Freed built computer networks in Russia and drafted policy papers for the World Bank and the United States Agency for International Development. He felt that every organization he advised failed to take advantage of all the opportunities created by the Internet. He moved to the West Coast, where he became an expert in streaming networks. Then he joined Amazon, as a director of its fledgling mobile-services team. During an orientation that included a warehouse stint unloading boxes of shampoo and stocking shelves with toothpaste, he realized that people at the company saw things in a fundamentally different way.

Most firms have a mission statement that even the C.E.O. has trouble remembering. Amazon employees, Freed discovered, studied the Leadership Principles like Talmudic texts. During his first few years, he occasionally pulled colleagues, and even Bezos, aside to ask questions. What, for example, does “leaders are right a lot” really mean? Bezos explained, “If you have a really good idea, stick to it, but be flexible on how you get there. Be stubborn on your vision but flexible on the details.” Executives at other companies tended to lay out definitive plans. But Bezos urged his people to be adaptable. “People who are right a lot change their mind,” he once said. “They have the same data set that they had at the beginning, but they wake up, and they re-analyze things all the time, and they come to a new conclusion, and then they change their mind.” Freed often felt an impulse to answer his subordinates’ questions, but at Amazon leaders are encouraged to let team members puzzle out problems on their own.

About a year after joining the company, Freed became Bezos’s technical assistant, which gave him entrée to almost any meeting and provided a deep education in the company’s culture. Amazon’s internal processes were “mechanisms,” Freed learned, as in “What’s the mechanism for talking to the press?” Executives were expected to reduce “complexifiers,” and someone who failed to suggest ways to simplify a process might be interrupted by Bezos asking, “Are you lazy or just incompetent?”

Cartoon by Edward Koren

The Leadership Principles were never paraphrased; when a question over wording arose, the laminated cards were often whipped out. PowerPoint was discouraged. Product proposals had to be written out as six-page narratives—Bezos believed that storytelling forced critical thinking—accompanied by a mock press release. Meetings started with a period of silent reading, and each proposal concluded with a list of F.A.Q.s, such as “What will most disappoint the customer on the first day of release?”

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Tech companies are often profligate, but Amazon had an ethic of thrift. Freed learned to anticipate the eye rolls that greeted new employees who printed on just one side of paper, or the admonishment coming to anyone who wanted to book a business-class seat. Whenever Amazon moved to new offices, Bezos had them furnished with cheap desks made from wooden doors. Whereas other tech companies supplied employees with an array of free meals and snacks, Amazon offered only coffee and bananas. (In a statement, Amazon said that it is “frugal on behalf of our customers.”)

Freed and other Amazonians were delighted by the company’s quirks. Bezos amused his colleagues when he humble-bragged about being such a sci-fi nerd that he owned a Jean-Luc Picard uniform from “Star Trek: The Next Generation.” And staffers loved it when Amazon offered a promotion, known as Share the Pi, in which customers were given a discount of 1.57 per cent (3.14 divided by two). When Amazon leaders joined the low-carb craze, they ended meetings debating the finer points of ketosis, and raced one another up the stairs. It wasn’t fair to call Amazon a cult, but it wasn’t entirely unfair, either. “We never claim that our approach is the right one,” Bezos wrote, in a 2016 letter to shareholders. “Just that it’s ours.”

Above all, Freed loved Amazon’s focus on spinning its flywheels faster, and finding new markets where they could whirl. “Amazon’s culture is designed to prevent bureaucracies,” he told me. “Everything Jeff does is to stop a big-company mentality from taking hold, so that Amazon can continue behaving like a group of startups.” Among the worst sins was doing anything that slowed the company down. (As the Leadership Principles put it, “Speed matters.”) Freed was soon assigned to help oversee the creation of a new e-reader, the Kindle. His team expanded quickly (“Hire and Develop the Best”), came up with dozens of concepts and prototypes (“Invent and Simplify”), and, in just a few years, delivered a device of startling simplicity and elegance. When the Kindle was launched, in 2007, it sold out in less than six hours, and soon became one of the most popular gadgets of the past quarter century.

As Freed learned, it was also fine to stumble at Amazon, as long as the experience yielded strategic insight. After overseeing the Kindle, Freed was asked to help lead a team developing the company’s first smartphone. Bezos had become enamored of a sophisticated display that approximated 3-D. For four years, Freed oversaw a group that grew to a thousand employees, and spent more than a hundred million dollars. But when the Amazon Fire Phone was released, in 2014, it was a flop. No matter: when Freed had presented an early prototype of the phone’s software to Bezos, he’d shown him how it included voice recognition that could hear, and then play, any popular song whose title a user said aloud. “I can ask for any song?” Bezos asked. “What about ‘Hotel California’?” The tune began playing. “This is fantastic,” he said.

A few days after that presentation, Bezos asked Freed to help build a cloud-based computer that responded to voice commands, like the one in “Star Trek.” Freed started amassing a team that eventually reached two hundred people, and was given a fifty-million-dollar budget. The Fire Phone’s voice-recognition technology had been licensed from another firm, and wasn’t an exact fit for what Amazon was seeking. So Freed and his team hired speech scientists and artificial-intelligence experts, and created new software that could comprehend someone from Louisiana as well as someone from Liverpool—and distinguish the babble of a toddler from parents talking with food in their mouths. The team chose a name (and a “wakeup” word) for the device by considering hundreds of possibilities, before landing on Alexa—a name that was sufficiently familiar yet unusual enough to avoid too many accidental commands. Just four months after releasing the disastrous Fire Phone, Freed revealed the Echo, a voice-activated speaker that can tell you the weather, compile a grocery list, remind you to take a pie out of the oven, and play “Hotel California.” The initial price was a hundred and ninety-nine dollars. Today, you can buy one for half that, and fifty million homes have them.

Around the time of the Echo’s launch, Amazon wrote off more than a hundred and seventy million dollars in costs associated with the Fire Phone. Bezos told Freed, “You can’t, for one minute, feel bad about the Fire Phone. Promise me you won’t lose a minute of sleep.” By 2015, Freed was a vice-president and Amazon was the most valuable retailer in the world.

Identifying and building flywheels became second nature to Freed. When a junior executive came by his desk with an idea—“What if we made a streaming device that you could plug into a television?”—Freed invited him to lunch, coached him through writing a mock press release, and took him to pitch the idea to Bezos. They reminded Bezos that, with existing streaming devices, searching for content was difficult. “It’s really hard to type ‘Gene Hackman movies from the nineteen-seventies’ when you’re using a remote control,” Freed explained. Amazon’s product, he said, would allow customers to simply say what they wanted to watch. The flywheel began spinning. If Amazon sold a streaming device, it could collect more data on popular shows; if Amazon had that data, it could begin profitably producing its own premium movies and television series; if Amazon made that content free for Prime members—customers who already paid ninety-nine dollars per year for two-day delivery—then more people would sign up for Prime; if more people signed up for Prime, the company would have greater leverage in negotiating with UPS and FedEx; lower shipping costs would mean bigger profits every time Amazon sold anything on its site. The Amazon Fire TV, as the device was named, soon became one of the most popular streaming devices on the planet. Amazon Studios began producing premium shows, and before long it had won two Oscars for “Manchester by the Sea” and eight Emmys for “The Marvelous Mrs. Maisel.” In 2017, the number of Amazon Prime subscribers surpassed a hundred million.

Although Freed was thriving at Amazon, he could see that there was something dizzying about its flywheel mentality. “It was hard,” he said. “That’s the culture—do whatever it takes, even if it seems impossible.” Amazon’s obsession with expansion made it the corporate equivalent of a colonizer, ruthlessly invading new industries and subjugating many smaller companies along the way. In 2006, the company had launched Fulfillment by Amazon, an initiative in which outside sellers—everyone from mom-and-pop venders to major Chinese manufacturers—housed inventory inside Amazon’s giant warehouses and paid a fee for Amazon to handle logistics, such as packing and shipping products and fielding customer-service calls. Companies enrolled in Fulfillment by Amazon often appeared in the Buy Box, the top search listing on Amazon.com. To participate, many venders had to pay about two dollars per item. They also had to let Bezos collect valuable data on which products were becoming popular and which companies were having trouble satisfying demand. Soon, some venders felt as though they had to participate in Fulfillment by Amazon; they couldn’t otherwise attract much attention on Amazon.com, or ship products inexpensively enough to compete with rivals.

Today, Amazon.com lists more than three hundred and thirty million products sold by other companies. Scott Needham, whose company, BuyBoxer, sells about seventy thousand products on Amazon, ranging from toys to sporting goods, paid the company roughly twenty million dollars in fees last year. “There’s really no other choice,” Needham said. “There’s a lot of things I don’t like about Amazon, but that’s where all the customers are.” Recently, the U.S. House of Representatives and the European Union began scrutinizing Fulfillment by Amazon and similar programs, out of concern that they impede competition. “Amazon is the gatekeeper,” Needham said. “It makes all the rules.”

Tim Wu, a law professor at Columbia, said, “Amazon is a microeconomist’s wet dream. If you’re a consumer, it’s perfect for maximizing the efficiency of finding what you want and getting it as cheap and fast as possible. But, the thing is, most of us aren’t just consumers. We’re also producers, or manufacturers, or employees, or we live in cities where retailers have gone out of business because they can’t compete with Amazon, and so Amazon kind of pits us against ourselves.”

Freed loved how things whizzed along at Amazon headquarters, but he understood that the “Speed matters” credo meant something different at the warehouses. “Is it the role of a company to only do what’s best for shareholders?” he asked me. “Yes, shareholders are critical, but it’s also important to understand the impact on employees.” More than a hundred thousand people work at Amazon’s fulfillment centers, and nearly everything they do is digitally tracked and evaluated, meaning that if someone falls behind—even for just a few minutes—it can be grounds for reprimand. Many employees carry handheld scanners that deliver a constant stream of instructions, such as a countdown clock detailing how many seconds remain until the next item must be plucked from a shelf. Workers can walk more than fifteen miles a day, and their breaks, including trips to the bathroom, are brief and closely measured. A company document explains, “Amazon’s system tracks the rates of each individual associate’s productivity and automatically generates any warnings or terminations regarding quality of productivity without input from supervisors.” A former warehouse employee told me that she knew of people who got fired largely “because they were too old, or their knees started acting up, or they just had a bad week.” She added, “Managers are always vague about what will get you fired, which creates this paranoia.” Employees, she said, sometimes ask questions about “what exactly will get them fired, and the responses are so vague that you basically know that if you’re not constantly moving, you’re probably gone.” Employees line up at vending machines that dispense free over-the-counter painkillers. For years, some Amazon warehouses lacked sufficient air-conditioning; this changed only after reports emerged, in 2011, of workers passing out and requiring emergency medical treatment for heat-related problems.

William Stolz, who has worked for two years at an Amazon warehouse in Shakopee, Minnesota, told me that he’s expected to grab an item every eight seconds, and has seen co-workers injure their wrists, knees, shoulders, and backs by repeatedly kneeling, or by rushing up and down ladders. “There’s a constant pressure to hit your numbers,” he said. If you get four writeups within ninety days for falling below the expected productivity rate, you will be fired. Stolz said, “I’ve seen people who aren’t even thirty years old get injuries they’re going to have for the rest of their lives, but whenever we ask for the speed of work or the repetitive motions to be changed we’re told that’s not going to happen.”

“My situation may not be the greatest, but I’ll tell you this—I’m worth two of you!”Cartoon by Liana Finck

When Safiyo Mohamed moved from Somalia to Minnesota, in 2016, at the age of twenty-two, she found work at the Shakopee warehouse, sorting products and moving boxes on and off conveyors. The job was taxing and the pressure relentless, she said. One day, when she picked up a heavy box, she tore an intervertebral disk in her back. The pain was excruciating, but Amazon didn’t offer her time off; her managers seemed not to care. “If you can’t work all the time, you are nothing to them,” she said. A doctor told her that the injury was pinching a nerve, and that the discomfort might never abate. She quit Amazon, and got an office job that allows her to pause, or stretch, when her back hurts. “How am I going to have a baby when I can’t pick him up, when I’m worried about being pregnant?” Mohamed said. “I’m so angry. Amazon doesn’t want humans, they want robots. I will have this forever because of them. They don’t care at all.”

At Amazon’s corporate headquarters, many executives’ performances are similarly quantified and ranked. “It can be a hard place for women,” a former executive told me. “If you have a kid, it’s a disadvantage to your career, unless your husband is the primary parent.” (Amazon said, in a statement, that it “disagrees strongly with this perspective,” and noted that it offers twenty weeks of paid parental leave.) A former senior female executive told me she counselled younger colleagues that “it’s not the company’s job to create a work-life balance—it’s your job,” adding, “The idea of a company as a caretaker is not our culture.” There is only one woman on Amazon’s S-Team, the group of eighteen executives who largely run the firm. The lack of female representation is a sensitive topic at the company. A current high-ranking executive told me, “I’m not sure it would be any different for a woman at an investment bank or a big law firm. The pace is fast, yes, and it’s not for everyone or every stage of life, but these are highly compensated people who know they can easily get other jobs. No one works at Amazon—at least, in corporate—unless they want to.”

Amazon argues that criticisms of working conditions in its warehouses are unfair. Dave Clark, the senior vice-president for worldwide operations, told me that work expectations at its facilities “are very achievable for folks.” He said that the company has increasingly automated its warehouses, to ease physical tasks. “We make mistakes,” Clark said. “And, when we do hear about it, we learn from it, and we go out and fix it.” Amazon pays all U.S.-based employees at least fifteen dollars an hour—more than the minimum wage in many places—and full-time warehouse workers have access to the same health and retirement plans as executives. A company statement noted that workers at Amazon begin and end every shift with a short meeting and a group stretching session; it also said that employee performance is evaluated over extended periods, noting, “We would never dismiss an employee without first ensuring that they had received our fullest support, including dedicated coaching.”

Many Amazon executives have become defensive about the fact that even centrist politicians like Joe Biden see the company as a symbol of capitalism gone awry. (On Twitter, Biden recently said of Amazon, “No company pulling in billions of dollars of profits should pay a lower tax rate than firefighters and teachers.”) Jeff Wilke, one of Bezos’s top lieutenants, told me that Amazon “tries to be a good corporate citizen,” and added, “We’ve built a for-profit enterprise that is improving the lives of customers and taking great care of employees. There’s a lot to be proud of.” The company, he said, has committed to spending seven hundred million dollars to train its workers in such subjects as coding and robotics. One senior Amazon executive said of its warehouses, “It’s a hard economy for people without college degrees right now. We can’t run a philanthropy, but we’re trying to be the best of those bad kinds of jobs.” Another top executive suggested that Amazon was merely a cog in the American economic machine—and inevitably reflected how contemporary inequality had created winners and losers. “We’re doing what we can,” he said. “But ultimately this is a problem only the government can really solve—by changing how the economy works.”

Amazon has always been unabashed about being a cutthroat competitor. When the company started, in 1995, with fewer than a dozen employees, Bezos considered naming it Relentless. (The company still owns the URL for relentless.com—it redirects you to Amazon.com.) Amazonians know that outsiders want them to change, but listening to outsiders is not one of the Leadership Principles. One executive told me, with barely suppressed resentment, “What has made us great for so long is suddenly being seen as something we ought to be ashamed of!”

In 1913, an employee of the Ford Motor Company went to the Swift & Co. meatpacking plant, in Chicago, to study how hogs moved through the facility on conveyor belts while butchers stayed in place, making the same cut again and again. Someone prepared the carcass; another person cut the left haunch; another was responsible for incisions along the shoulder. The knives never stopped moving as the animals sped through the plant. When the Ford employee returned to headquarters, he told his colleagues, “If they can kill pigs and cows that way, we can build cars that way.” The man’s boss, Henry Ford, a lifelong tinkerer, had developed a radical new product: an automobile, with an inexpensive internal-combustion engine, that could be manufactured in a couple of days and sold for less than a thousand dollars. When Ford managers heard about the meatpacking plant, they began work on another major innovation: the mechanized assembly line. Within four years, Ford’s plants could manufacture a car in less than two hours and sell it for about four hundred dollars.

In 1918, a man named Alfred P. Sloan began working as an executive at a much smaller company, General Motors. Sloan wasn’t especially interested in automobiles. He loved making money—and figuring out how to manage people in order to make profits grow faster. Once installed at G.M., Sloan staged a coup by way of a memo, “Organization Study,” which eventually reoriented the firm around himself and a set of foundational credos that included five “objectives.” A chart of eighty-nine boxes connected by a blizzard of lines mapped out each executive’s place in the hierarchy. It was the first org chart of its kind. Sloan’s theory was that G.M. could codify the processes that delivered information up to headquarters and guidance down to managers. “If the whole General Motors central organization should be hit by an atomic bomb, Pontiac could go on just exactly the same,” Sloan boasted to a reporter. Soon, the company had standard procedures for budgeting, hiring, firing, prototyping, promoting, and resolving disputes. Within this rigid framework, executives were given the freedom to be creative; G.M. essentially became the first company to segment the automobile market, selling Chevrolets to the middle class and Cadillacs to the wealthy.

When Sloan joined the company, G.M. was on the verge of bankruptcy. Within a decade, it had outpaced Ford, becoming the nation’s largest carmaker, and for the next eighty years it dominated the auto business and, eventually, a wide variety of other industries. Sloan’s systems made G.M. one of the country’s biggest loan financiers and a powerful real-estate investor, and placed it among the largest manufacturers of refrigerators, industrial magnets, home appliances, aeronautic equipment, military gear, and medical equipment. In 1952, G.M. made the first mechanical heart. Sloan launched a sophisticated corporate polling division—another first—that uncovered customer tastes that other companies had overlooked; the R. & D. department used this information to create new products. The same playbook that dreamed up Cadillac’s space-age tail fins was soon designing sleek Frigidaire iceboxes. G.M., in other words, was adept at creating flywheels. It sold plenty of cars, but, unlike Ford, it wasn’t a product company—it was a process company.

Silicon Valley is filled with product companies. Google invented two products—a spectacular search engine and a set of algorithms for matching people’s online behavior to ads—that today deliver eighty-five per cent of its revenue. Facebook invented (and acquired) addictive social-media products and then basically imitated Google’s ad-matching algorithms, and gets ninety-eight per cent of its revenue from those products.

Amazon is a process company. Last year, it collected a hundred and twenty-two billion dollars from online retail sales, and another forty-two billion by helping other firms sell and ship their own goods. The company collected twenty-six billion dollars from its Web-services division, which has little to do with selling things to consumers, and fourteen billion more from people who sign up for such subscription services as Amazon Prime or Kindle Unlimited. Amazon is estimated to have taken in hundreds of millions of dollars from selling the Echo. Seventeen billion came from sales at such brick-and-mortar stores as Whole Foods. And then there’s ten billion from ad sales and other activities too numerous to list in financial filings. No other tech company does as many unrelated things, on such a scale, as Amazon.

Amazon is special not because of any asset or technology but because of its culture—its Leadership Principles and internal habits. Bezos refers to the company’s management style as Day One Thinking: a willingness to treat every morning as if it were the first day of business, to constantly reëxamine even the most closely held beliefs. “Day Two is stasis,” Bezos wrote, in a 2017 letter to shareholders. “Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day One.”

For many entrepreneurs, Amazon has been a godsend. David Ashley, who sells handcrafted address signs from Jackson, Mississippi, told me, “We probably wouldn’t be in business without Amazon.” The 2008 recession almost killed Ashley’s small company. Then he began selling his signs on Amazon and discovered that—for forty dollars a month and fifteen per cent of each sale—Amazon would handle such tasks as processing credit-card transactions, identifying potential customers, and helping to insure that products were delivered on time. “But the biggest thing is that people trust Amazon,” Ashley said. “And so they trust us.” More than 1.9 million small businesses in the United States take advantage of Amazon’s services. Last year, nearly two hundred thousand sellers earned at least a hundred thousand dollars each on the site.

Other retailers, however, don’t share Ashley’s enthusiasm. When David Kahan became the chief executive of Birkenstock Americas, in 2013, he began to discover how thoroughly Amazon had changed his industry. Kahan had started his career as a shoe salesman at Macy’s; he went on to become a sales manager at Nike and, eventually, a top executive at Reebok. Birkenstocks have been made by hand, in Germany, for two hundred and forty-five years—thirty-two workers touch every pair. When Kahan became C.E.O., Amazon was among the company’s top three shoe sellers. “They sold millions of dollars’ worth of our shoes,” Kahan told me. “But during my first year I was sitting in my office, where I can hear the customer-service department, and we were getting a flood of people saying their shoes were falling apart, or they were defective, or they were clearly counterfeits, and, every time the rep asked where they had been purchased, the customer said Amazon.”

Cartoon by Roz Chast

Kahan investigated, and found that numerous companies were selling counterfeit or unauthorized Birkenstocks on Amazon; many were using Fulfillment by Amazon to ship their products, which caused them to appear prominently in search results. “We would ask Amazon to take sellers down—or, at least, tell us who is counterfeiting—but they said they couldn’t divulge private information,” Kahan told me.

Kahan also discovered that Amazon had started buying enormous numbers of Birkenstocks to resell on the site. The company had amassed more than a year’s worth of inventory. “That was terrifying, because it meant we could totally lose control of our brand,” he said. “What if Amazon decides to start selling the shoes for ninety-nine cents, or to give them away with Prime membership, or do a buy-one-get-one-free campaign? It would completely destroy how people see our shoes, and our only power to prevent something like that is to cut off a retailer’s supply. But Amazon had a year’s worth of inventory. We were powerless.”

Kahan spent months trying to negotiate with Amazon executives in Seattle. At the Birkenstock Americas office, in Marin County, California, he and his deputies would spend hours preparing arguments about why stopping unauthorized sellers would help Amazon’s customers, and then they’d crowd around Kahan’s desk and turn on the speakerphone. Sometimes the Amazon executives would let them go on; other times, they’d cut them off midsentence. It wasn’t Amazon’s place to decide who could and couldn’t sell on the site, the executives explained, as long as simple guidelines were met. “They basically didn’t care,” Kahan said. “We’re just one company, and there’s millions of companies they deal with every day. But this is the biggest thing on earth for us. Amazon is the shopping mall now, and, normally, if you open a store in a shopping mall, you can expect certain things—like the mall operator will clean the hallways, and they’ll make sure Foot Locker isn’t right next door to Payless, and if someone sets up a kiosk in front of your store and starts selling fake Air Jordans, they’ll kick them off the property.” He continued, “But Amazon is the Wild West. There’s hardly any rules, except everyone has to pay Amazon a percentage, and you have to swallow what they give you and you can’t complain.”

Hundreds of other companies have told Amazon about counterfeiting or what they see as unfair competition—some of it generated by Amazon itself. In the early two-thousands, a San Francisco firm named Rain Design began selling an aluminum laptop stand that had a graceful curve, and it became an unexpected best-seller on Amazon. Amazon then released its own stand, with a nearly identical design, under the brand AmazonBasics, at half the price. Rain Design’s sales fell. In 2016, Williams-Sonoma had started selling a low-backed mid-century-modern chair called the Orb. A year later, Amazon released an almost identical chair, which they also called the Orb. Last December, Williams-Sonoma filed a lawsuit claiming that “Amazon has unfairly and deceptively engaged in a widespread campaign of copying.” Earlier this year, a judge denied Amazon’s motion to dismiss the case, ruling that the company might be “cultivating the incorrect impression” that ersatz products were authorized by Williams-Sonoma.

Critics say that Amazon uses the torrent of data it collects each day—how long a customer’s cursor hovers over various products, how much of a price drop triggers a purchase—to divine which products are poised to become blockbusters, and then copies them. In July, the E.U. announced an investigation into whether Amazon uses “sensitive data from independent retailers who sell on its marketplace” to unfairly promote its own goods, or to create imitation products. Europe’s top competition regulator, Margrethe Vestager, told me that Amazon is “hosting thousands and thousands of smaller businesses, but at the same time it is a competitor to them.” She added, “This deserves much more scrutiny.”

In a statement, Amazon said that many other retailers also produce their own versions of best-selling items, that such goods make up only one per cent of Amazon’s sales, and that Rain Design’s stands continue to sell well, despite competition from Amazon’s stand—which, it insists, isn’t a replica. The company added that it does not use “data about individual sellers to decide which products to launch.” (Company insiders, however, told me that Amazon does use aggregate data from multiple sellers to make such decisions.)

Kahan, of Birkenstock, eventually decided to take extreme measures. He announced that his firm would no longer sell shoes on Amazon, and he sent a letter to retailers declaring that if they listed Birkenstock products on Amazon they would be “severing” their “relationship with our company.” According to Kahan, Amazon began contacting authorized retailers, inviting them to sell their supply of Birkenstocks to the site. Kahan wrote to his retailers, “To me, the solicitation is quite frankly a ‘wolf in sheep’s clothing.’ . . . I take their desperate act as a personal affront and as an assault on decency. . . . Amazon can’t get Birkenstock by legitimate means so why not dangle a carrot in front of retailers who can make a quick buck.”

Kahan’s outrage hardly mattered. Today, despite Birkenstock’s refusal to do business with Amazon, there are numerous resellers—some overseas, others with names that obscure their true identities—offering Birkenstocks on Amazon. Kahan has no idea who these resellers are, and Amazon won’t tell him. Birkenstock requires authorized retailers to charge roughly a hundred and thirty-five dollars for its classic Arizona sandal. On October 8th, Arizonas were going on Amazon for as little as fifty dollars—which is great for customers looking for cheap shoes but potentially disastrous for Birkenstock, which relies on those higher prices to pay for marketing, product design, and the salaries of customer-service employees (who replace defective shoes for free).

Amazon says that it has spent hundreds of millions of dollars on anti-counterfeiting efforts, including machine-learning technology that identifies suspicious items. Nevertheless, the site remains full of dubious products. A recent investigation by the Wall Street Journal identified thousands of products for sale on Amazon that “have been declared unsafe by federal agencies, are deceptively labeled or are banned by federal regulators,” including children’s toys containing dangerous levels of lead. Many of these products were shipped from Amazon warehouses, some through the Fulfillment by Amazon program. And Birkenstock’s customer-service department still gets calls from customers who bought fake sandals on Amazon and expect Birkenstock to provide a refund.

Amazon says that it cannot accommodate the demands of Birkenstock and other companies that wish to “limit availability of competitively priced products.” In a statement, Amazon said that it is not its role to decide who is, and is not, authorized to sell various items. Amazon isn’t a mall, a current executive told me. He described it as a Web site that offers unlimited shelf space for an almost unlimited number of products and sellers. Some might call this a platform. Other tech giants, such as Facebook and Twitter, describe themselves as platforms, partly as a way of justifying spotty oversight of their sites.

Kahan told me that, with the rise of Amazon, the give-and-take that has long undergirded the retail economy has become lopsided in a titan’s favor. “Capitalism is supposed to be a system of checks and balances,” he said. “It’s a marketplace where everyone haggles until we’re all basically satisfied, and it works because you can always threaten to walk away if you don’t get a fair deal. But when there’s only one marketplace, and it’s impossible to walk away, everything is out of balance. Amazon owns the marketplace. They can do whatever they want. That’s not capitalism. That’s piracy.”

On January 7, 2019, as public criticism of Amazon’s excesses grew louder, Jeff Bezos received an e-mail from Dylan Howard, the chief content officer of American Media, the parent company of the National Enquirer. “I write to request an interview with you about your love affair,” the message began. Howard then asked dozens of questions about Bezos’s involvement with Lauren Sanchez, a helicopter pilot who had founded a company, Black Ops Aviation, that filmed promotional videos for Bezos’s rocket company, Blue Origin. Reporters for the Enquirer had been trailing Bezos and Sanchez for months, the e-mail indicated, photographing them in hotels and at airports, and compiling a dossier of trysts. Bezos and Sanchez were both married, and the Enquirer was prepared to expose it all.

Bezos and his wife, MacKenzie, a novelist, had been together for twenty-seven years. When executives went to their house for weekend meetings, it wasn’t unusual to see them reading the newspaper together or helping their kids with homework. “They seemed to have the perfect marriage,” a former Amazon executive told me. “I once saw them get out of the car at our holiday party, when they thought no one was looking, and hold each other’s hand. It was that kind of relationship, real inspirational. Like, if they could stay together and keep their family sane, with all the work and money and stress, then the rest of us could, too.”

“Oh, God—I can finally do laundry!”Cartoon by Emily Flake

Around the time that Bezos became the world’s richest man, his life style changed. He appeared on television at the Academy Awards. He bought a mansion in Beverly Hills, and he threw a party co-hosted by Matt Damon. He was following an intense weight-training and diet regimen. He was in Seattle less frequently, employees noticed, and he often attended events without MacKenzie. Now the Enquirer was accusing Bezos and Sanchez of hiding their assignations from MacKenzie and from Sanchez’s husband, Patrick Whitesell, a powerful talent agent whom Bezos had socialized with as Amazon expanded into Hollywood. A former American Media executive said of the Enquirer investigation, “It was a kind of weird story for us. Enquirer readers don’t really care about C.E.O.s. But everyone was all worked up and excited about it—cackling about blackmail and dick pics. It was like the unpopular kids had finally found something embarrassing about the quarterback.”

Two days after Bezos received Howard’s e-mail, he posted a message on Twitter. “We want to make people aware of a development in our lives,” he wrote, in a note co-signed by MacKenzie. “After a long period of loving exploration and trial separation, we have decided to divorce and continue our shared lives as friends.” Hours later, the Enquirer started publishing articles about the affair, making reference to “sleazy photos” and “X-rated selfies” exchanged by Bezos and Sanchez. The tabloid quoted some texts that he had sent her—“I want to smell you”—which suggested that his or her phone had been compromised. But the tabloid did not end up publishing racy photographs; it ran mundane images of Bezos and Sanchez, some of which had already appeared online. According to the former American Media executive, the publication might not actually have had explicit images. “If we had pics of Jeff Bezos’s dick, I would have seen them,” the former executive told me. “That’s standard operating procedure—you pass them around. But whenever I asked I was told, ‘Well, we don’t actually have them here right now.’ I was, like, ‘You’re bluffing the richest man in the world?’ ” (A representative of the Enquirer said that the publication had “acted lawfully and stands by the accuracy of its reporting.”)

Marriages break up all the time, yet many of Bezos’s colleagues felt disoriented by the fact that he had been so undisciplined as to let his personal life become tabloid fodder. “The basis of Jeff’s stature was a lot of things, but integrity was No. 1,” a former colleague told me. “The way he dealt with his family, and customers, and the people around him—that was at the core of why we respected him so much. And then this thing happened, and it was so hard to make that fit into the picture of the person we knew.” Even Bezos’s friends were concerned. “It was like Jeff had been abducted by aliens and replaced,” one told me. “It’d been going on for about a year—the bodybuilding stuff, and Hollywood, and just a big change in how he was—and then this came out, and I still don’t know how to process it.”

Once Bezos’s affair became public, more mainstream publications began digging around. When the Wall Street Journal prepared a story about how Bezos’s divorce might affect his company, Amazon’s P.R. department, which had been known for using mild language, responded acidly. The company’s communications and policy chief, Jay Carney, told the paper, “I didn’t realize the Wall Street Journal trafficked in warmed-over drivel from supermarket tabloids.” Meanwhile, Bezos launched an internal audit of his cell-phone data. If someone had gained access to his private texts, what else had been collected? E-mails? Business plans? Bezos ordered his personal head of security, the consultant Gavin de Becker, to scrutinize electronic records and to conduct interviews. Was the breach part of a sophisticated attack whose purpose was larger than simply to embarrass Bezos?

Bezos had plenty of enemies, and not just aggrieved companies like Birkenstock. For years, he had been battling various groups, from pro-union organizers to activists critical of Amazon’s tax practices, and some of the clashes had been nasty. Labor organizers had been a particular source of conflict. In 2000, when the Communication Workers of America tried to unionize four hundred of Amazon’s customer-service representatives in Seattle, the company closed down the call center where those employees worked, as part of what it said was a broader reorganization. In 2014, when a group of technicians at an Amazon warehouse in Delaware petitioned the National Labor Relations Board to allow them to vote on whether to unionize, Amazon hired a law firm that specialized in fighting organized labor, and held meetings warning that unionization could be bad for workers’ jobs. Employees voted against joining the union. According to the Times, when other workers in Delaware tried to unionize, their manager gave an emotional speech about his youth: after his father had died, steps from his front door, the union had offered no support. The speech apparently worked—employees did not authorize a union vote. After the speech, outside organizers found an obituary of the man’s father: he had been a partner at an insurance agency, not a union member, and had died while jogging, on vacation in South Carolina. After Amazon bought Whole Foods, in 2017, and workers began exploring unionization, store managers reportedly received a video explaining that “you might need to talk about how having a union could hurt innovation, which could hurt customer obsession, which could ultimately threaten the building’s continued existence.” The union push stalled.

Dave Clark, the senior vice-president for worldwide operations, told me that Amazon already provides many of the benefits that a union would demand, and so “there’s really no reason to put an interstitial layer between employees’ ability to directly come tell their manager that something is broken.” Amazon, in a statement, said that it complies with the National Labor Relations Act, and that any member of the public can sign up for a free tour of its warehouses. “Our direct connection with our people is the most valuable way to run the business,” Clark said. “It’s the fastest way to run the business. It’s the most innovative way to run the business.” He added, “I can’t see how unions add any value to our current operations.”

Groups unrelated to organized labor also had an incentive to embarrass Bezos. In 2018, when Seattle’s city council, facing a homelessness crisis, unanimously passed a measure that would have required the city’s largest companies to pay a tax of two hundred and seventy-five dollars per local worker to build homeless shelters and affordable housing, Amazon balked. The law would have initially cost Amazon less than twenty million dollars per year, at a time when its annual revenue exceeded two hundred and thirty billion dollars. Before it passed, Amazon announced that it had halted construction on a new tower in Seattle and was reconsidering an expansion into seven hundred thousand square feet that it had leased. A company spokesperson implicitly blamed the tax for these shifts, telling local reporters that Amazon was “apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses.” Amazon donated twenty-five thousand dollars to No Tax on Jobs, a group opposing the initiative. The tax’s supporters pushed back, accusing Bezos and others of being “O.K. with the city having shantytowns and favelas,” but within a month the city council surrendered, and repealed the tax measure. “This is not a winnable battle at this time,” one councillor explained. “The opposition has unlimited resources.” Seattle’s homeless population rose four per cent that year. The city has the third-largest population of homeless residents in the nation.

Activists have also noted that Bezos is much less philanthropic than many of his peers. Among America’s top five billionaires, he is the only one who has not signed the Giving Pledge—a program, created by Bill Gates and Warren Buffett, that encourages the world’s wealthiest citizens to give away at least half their wealth.

Amazon, meanwhile, has drawn particular criticism for its approach to federal taxes. Financial filings show that Amazon likely paid no U.S. federal income tax in 2018. The company reported a negative federal-tax charge on $11.2 billion in profits, in part because it received tax benefits by paying employees in stock rather than in wages, giving it a $1.1-billion deduction, and because of research-and-development credits that yielded a four-hundred-and-nineteen-million-dollar tax break. Most large tech firms avail themselves of similar opportunities—and Amazon, unlike Apple or Google, doesn’t transfer profits to foreign countries, thus avoiding U.S. taxes. However, the company’s low reported tax bill has infuriated its detractors on the left. In one of several criticisms levelled at Amazon in a recent Democratic debate, Andrew Yang said that Amazon was closing “America’s stores and malls and paying zero in taxes while doing it.” (Amazon says that last year it paid $1.2 billion in income taxes globally, but declines to disclose how much it has paid in the U.S.)

Some of Bezos’s close friends and colleagues say that Amazon’s tightfistedness reflects his political leanings. “Jeff is a libertarian,” a close acquaintance, who has known Bezos for decades, told me. “He’s donated money to support gay marriage and donated to defeat taxes because that’s his basic outlook—the government shouldn’t be in our bedrooms or our pocketbooks.” One of Bezos’s earliest public donations was to the Reason Foundation, a libertarian think tank and publisher. In 2013, he bought the Washington Post and invested heavily in its editorial operations, which remain independent; the effort has helped restore the paper’s journalistic lustre (and expanded its readership). Yet he also froze the company’s pension plan—a move that offered no real financial benefit to Bezos, given that the plan was already significantly overfunded—leaving some Post employees with the prospect of fewer benefits when they retired. Fredrick Kunkle, a reporter who is part of the newsroom’s union leadership, said of Bezos, “He doesn’t think companies have obligations to employees beyond paying wages while they work.” Bezos’s close acquaintance agrees: “There’s an empathy gap there, something that makes it hard for him to see his obligations to other people. Seattle is filled with businesspeople—Gates and the Costco founders and the Boeing leadership—who have invested in this city. But the one time Amazon could have pitched in, on the homelessness tax, instead of taking the lead Jeff threatened to leave. It’s how he sees the world.”

Every billionaire has critics and enemies, but, when the Enquirer published Bezos’s secrets, people close to him wondered if the disclosure might be part of a gambit to embarrass him and weaken him at, say, the union bargaining table, or to force him to change his philanthropic habits. Such tactics have a surprising history of success. When Alfred Sloan and G.M. were fighting labor unions and tax foes, in the nineteen-thirties, the company’s critics began providing tabloids with photographs of G.M. executives enjoying their luxury sailboats and cavorting with showgirls. In 1936, the United Auto Workers staged a weeks-long sitdown strike in Flint, Michigan, and labor activists smuggled gossip about Sloan to reporters. Walter Lippman soon declared that Sloan was a “bungling” menace. When Sloan refused to meet with union representatives, the Secretary of Labor, Frances Perkins, took him to task publicly, yelling at him, “You are a scoundrel and a skunk, Mr. Sloan! You don’t deserve to be counted among decent men.” Soon afterward, G.M. agreed to recognize the union.

In 1937, the Treasury Secretary accused Sloan of “moral fraud”—“the defeat of taxes through doubtful legal devices.” Sloan insisted that he’d actually paid sixty per cent of his income from the previous year in taxes, and given half of what remained to charity, but the attack further blighted his reputation. Eventually, Sloan caved. He donated fifteen per cent of his wealth—the modern equivalent of a hundred and eighty million dollars—to fund the Alfred P. Sloan Foundation, and he eventually gave hundreds of millions of dollars more to universities and other organizations.

Bezos, who is reportedly worth a hundred and fourteen billion dollars, has so far donated less than three per cent of his wealth to charity. Three months after the homelessness-tax incident, he pulled a Sloan-like move: he announced the launch of a two-billion-dollar foundation named the Bezos Day One Fund. Since then, it has given grants to advocates for the homeless, and it is creating a network of Montessori-inspired preschools in low-income communities.

Cartoon by Bruce Eric Kaplan

Fortunately for Bezos, the labor movement does not have as much power as it did in Sloan’s day. When, earlier this year, Amazon cancelled its plans to open a second headquarters, in New York City, in part because of disputes with local unions, some politicians, rather than attacking Amazon, blamed the unions for scuttling the deal. In an open letter, Governor Andrew Cuomo’s budget director wrote, “Some labor unions attempted to exploit Amazon’s New York entry. . . . The union that opposed the project gained nothing and cost other union members 11,000 good, high-paying jobs.” Amazon currently has more than a hundred and fifty warehouses, and many of them are in economically depressed areas, where employment is scarce and politicians and workers are less likely to complain. Emily Guendelsberger, a journalist who briefly worked in an Amazon warehouse in 2015, said, “People really want those jobs. It’s gruelling, miserable work—I was taking Advil like candy. But one woman told me she drove an hour each way because Amazon paid more than the pizza place in her home town.”

Some economists say that focussing on Amazon’s miserliness or on the conditions inside its warehouses obscures larger, more positive truths. Michael Mandel, an economist at the Progressive Policy Institute, told me, “These are hard jobs, no one disputes that. They are definitely harder than office jobs, and they are harder than working in a clothing store or at a movie theatre. But wages in clothing stores have been declining for forty years, and wages have also gone down in manufacturing, and what I see is Amazon creating tens of thousands of jobs that pay thirty per cent more than competitors, that offer real benefits, that help high-school graduates get skills they need. Eventually, workers will demand that Amazon’s pie gets divided more evenly. But the only reason we’re even having this conversation is because Amazon has been expanding the pie for the people left behind.”

Gavin de Becker concluded that the National Enquirer’s publication of Bezos’s personal data was indeed intended to serve political ends—but he didn’t blame Amazon’s critics on the left. De Becker began speaking with reporters, claiming that he had evidence that the Enquirer’s reporting was “politically motivated.” He eventually claimed that the exposé was related to Bezos’s ownership of the Washington Post.

In March, de Becker laid out his accusations in the Daily Beast. “Our investigators and several experts concluded with high confidence that the Saudis had access to Bezos’s phone, and gained private information,” de Becker wrote, alleging that there were links between the hacking and a conspiracy related to the 2018 murder of the Post columnist Jamal Khashoggi, inside a Saudi consulate in Turkey. “The Saudi government has been intent on harming Jeff Bezos since last October, when the Post began its relentless coverage of Khashoggi’s murder,” de Becker wrote. Now the Saudi government, with help from the Enquirer, was “trying to strong-arm an American citizen.” Precisely why the Saudis wanted Bezos’s selfies, and what they hoped to accomplish by passing them to a tabloid, de Becker did not say. (Nobody connected to the internal investigation would discuss in detail any of its findings.)

De Becker, in his article, pointed out that in recent years the Enquirer had become overtly political. It was so closely aligned with Donald Trump that, during the 2016 Presidential race, its publisher paid hush money to silence one of the candidate’s alleged mistresses. When the Enquirer’s stories on Bezos appeared, President Trump—who has accused Bezos of buying the Post to wield political influence and keep Amazon’s taxes low—tweeted, “So sorry to hear the news about Jeff Bozo being taken down by a competitor whose reporting, I understand, is far more accurate than the reporting in his lobbyist newspaper, the Amazon Washington Post.”

Reporters at mainstream publications found little evidence to substantiate de Becker’s claims. The Enquirer, which was having financial difficulties, was wary of getting drawn into a possibly expensive political fight. (It was easy to imagine subpoenas coming from Capitol Hill.) The publication strenuously denied de Becker’s accusations. The former American Media executive said, “We were hundreds of millions of dollars in debt, our hedge-fund owner was getting freaked out, and it was, like, what’s the endgame here? This had been a bad idea from the beginning. They wanted out.”

A representative of American Media sent a private communication to Bezos: if he would release a statement saying that he had “no knowledge or basis for the suggestion” that American Media’s “coverage was politically motivated or influenced by political forces,” American Media would agree “not to publish, distribute, share or describe unpublished texts and photos.” In a separate letter, Dylan Howard, the American Media chief content officer, described images that he claimed to have, among them a “below the belt selfie—otherwise colloquially known as a ‘d*ck pick.’ ” The company provided no evidence of having such photographs. (Their existence has never been verified.) “It would give no editor pleasure to send this email,” Howard wrote to Bezos’s representatives. “I hope common sense can prevail.”

Howard’s strategy backfired. Bezos posted the tabloid’s correspondence on the Web site Medium, alongside an open letter. “Rather than capitulate to extortion and blackmail, I’ve decided to publish exactly what they sent me, despite the personal cost and embarrassment they threaten,” he explained. (The letter was written by Bezos and edited by his lawyers.) “It’s unavoidable that certain powerful people who experience Washington Post news coverage will wrongly conclude I am their enemy. . . . If in my position I can’t stand up to this kind of extortion, how many people can? . . . I don’t want personal photos published, but I also won’t participate in their well-known practice of blackmail, political favors, political attacks, and corruption. I prefer to stand up, roll this log over, and see what crawls out.”

It was a brilliant act of jujitsu. For the first time in years, Bezos was widely hailed in the mainstream media. (A typical tweet was “Just in: Jeff Bezos’ dick pic reveals he has balls of steel.”) Meanwhile, reporting by the Wall Street Journal and other outlets offered a simpler explanation for the hacking: the purloined messages had come from Lauren Sanchez’s brother, Michael, a reality-television talent agent. The Enquirer had paid him two hundred thousand dollars for the texts. Michael Sanchez was a Trump supporter, and it was possible that the Enquirer had learned of the affair and had urged him to peek at his sister’s phone. De Becker, however, still believed that his boss was the victim of a plot, and said that he was forwarding his intelligence to federal officials. For most Americans, though, the mystery seemed solved: a tabloid, not for the first time, had paid for gossip.

Within six weeks, the owners of the Enquirer had announced its sale. Jeff and MacKenzie Bezos finalized their divorce in July, and she received a thirty-eight-billion-dollar settlement. Shortly afterward, she announced that she was signing the Giving Pledge.

Bezos’s personal tumult distracted Amazon’s leaders at a particularly fraught time. The company’s headlong growth has led to a series of scandals, and executives have been unsure how to contain the damage. Like other process companies, Amazon is learning that a flywheel, once spinning, is very hard to stop.

Several years ago, Amazon built a vast network of independent couriers to provide what’s known as “last-mile delivery”: the final leg of a package’s journey to a customer’s door. For years, Amazon had relied upon UPS, FedEx, and the U.S. Postal Service to deliver packages. But in 2013 that system broke down; at Christmastime, tens of thousands of orders were stranded in warehouses. Amazon began constructing a delivery network of its own. Rather than build internally, however, the company signed contracts with hundreds of local drivers and courier firms, in cities across the country.

The benefit of outsourcing was that Amazon could build a delivery network quickly. Brittain Ladd, a former Amazon senior manager who specialized in logistics and operations, told me earlier this year that “it was really easy to scale up—there’s thousands of courier services out there, and so once you figure out the model you can expand it almost overnight.”

Cartoon by Seth Fleishman

Still, some people within Amazon, including Ladd, thought that these partnerships were a bad idea: it would be impossible for Amazon to insure that delivery companies were hiring responsible drivers and using rigorous safety protocols. “Frankly, you have very little control over these individuals,” Ladd told me. He said that he had hand-delivered to multiple colleagues a memo, marked “priorityhigh,” in which he expressed “grave reservations” about relying on contractors, warning, “I believe it is highly probable that accidents will occur resulting in serious injuries and deaths.” He recommended instead that the company carefully build its own last-mile-delivery network, one with a “zero-tolerance policy” for safety violations. Ladd said to me, “I attended meetings, and I told them that the last thing you want is a newspaper article reading ‘Amazon driver high on drugs hits and kills family.’ But we were growing so fast, and there was so much pressure, and if we tried to build this internally it would have taken at least a year. And so a decision was made that the risk was worth it.”

Amazon tried to work solely with courier services that met basic safety requirements, according to a current executive who helped establish the program. But Amazon pushed only so far, deciding that it wasn’t practical to compel firms to give drivers regular drug tests or to require extensive training. Local courier services are often run by inexperienced businesspeople. Meanwhile, the pressure to expand remained intense. “We were moving very, very fast,” a former manager who helped build the network recalled. “We were learning as we went.”

In 2015, Amazon contracted with a courier company called Inpax Shipping Solutions, and it began delivering packages for the company in Atlanta, Cincinnati, Miami, Dallas, and Chicago. Amazon executives apparently failed to note that Inpax’s chief executive had once pleaded guilty to conspiracy to distribute cocaine, and had declared bankruptcy after defaulting on debts. After Amazon signed the deal, its executives seemed not to notice that the Department of Labor was investigating Inpax, or, later, that federal regulators had found that the company had committed numerous labor violations. Amazon also overlooked a lawsuit filed by an Inpax employee against his boss, which was documented in public records.

On December 17, 2016, a dispatcher working with Inpax received an e-mail from Amazon declaring that “we are officially into ‘no package left behind’ territory.” Five days later, an Inpax driver, Valdimar Gray, was rushing to deliver Christmas packages in Chicago when he flew through a crosswalk, hitting Telesfora Escamilla, an eighty-four-year-old woman walking home from a hair salon. Escamilla, who was dragged under the van, died. Escamilla’s grandson Anthony Bijarro, who was at the scene, told me, “Amazon killed my grandmother because they wanted packages delivered a little faster. Amazon doesn’t care who’s driving, they don’t care if they’re reckless.” Escamilla’s family has sued Inpax and Amazon. Amazon, in a statement, said that it regularly audits its delivery partners to insure that they are in compliance with the law and with Amazon’s policies, and takes action “when they aren’t meeting our high bar for safety and customer experience.” The company has terminated its relationship with Inpax. (Inpax and Gray declined to respond to questions.)

ProPublica has identified more than sixty accidents involving Amazon, all since 2015, that resulted in serious injuries or deaths. Reporters at BuzzFeed have found records naming Amazon in at least a hundred lawsuits related to accidents involving package deliveries, which have included at least six deaths. Those are likely just a fraction of such collisions, because in many cases delivery vehicles were unmarked, and victims weren’t aware of Amazon’s role. Ladd, the former senior manager, said, “Amazon could have built this network in-house, or they could have acquired a logistics company to really teach them last-mile delivery, or they could have chosen partners more slowly, to make sure the right safety procedures were in place. But this was not a well-oiled machine—this was a bunch of people thrown together. They asked me for advice, and I was saying, ‘There’s another way to do this.’ ” If Amazon had found another way, Ladd said, “it would have been a hell of a lot better for the people who were killed—but once the machine starts moving it takes on a life of its own.”

As Amazon executives were becoming increasingly worried about the hazards of warp-speed growth, other pressures inside the company kept ratcheting up. Earlier this year, Amazon announced that it would soon start guaranteeing to many customers delivery in one day, rather than two, putting even more stress on couriers and workers.

Agrowing number of regulators in Washington, D.C., and in Europe argue that Amazon, along with other tech giants, needs to be reined in. Until the nineteen-seventies, many process companies were constrained by a fear of U.S. antitrust enforcement. Alfred Sloan always kept a close eye on the size of G.M.’s market share. “Our bogie is forty-five per cent,” Sloan told a reporter, in 1938. “We don’t want any more than that.” His trepidation was justified. The federal government repeatedly sued G.M., once charging Sloan personally with criminal antitrust activity. Almost none of the suits prevailed in court, but they cowed the company.

Sloan died in 1966, and, in the decades that followed, the government’s attitude toward antitrust enforcement changed. During the Reagan Administration, regulators and courts decreed that antitrust decisions should largely be based not on a company’s size or on its bullying tactics but, rather, on any price hikes imposed on customers. By the time Facebook and Google appeared, giving away their products for free, and Amazon arose, with its devotion to keeping prices down, antitrust enforcement was a remote concern. The legal scholar Lina Khan, writing in the Yale Law Journal in 2017, observed, “It is as if Bezos charted the company’s growth by first drawing a map of antitrust laws, and then devising routes to smoothly bypass them.”

Things began changing earlier this year. In June, the head of the U.S. Department of Justice’s antitrust division, Makan Delrahim, a Trump appointee and a respected authority on economic competition, gave a speech declaring that antitrust regulators would no longer be constrained by “the incorrect notion that antitrust policy is only concerned with keeping prices low.” Delrahim’s address was the equivalent of firing a starter’s pistol. In a recent conversation, he told me that tech companies “should think very seriously about their conduct,” adding, “If you’re one of the big guys, you should be careful to make sure you don’t snuff out competitors because you think that’s good for your business. That’s not what free markets really mean, and we’re going to come down on you like a ton of bricks if that’s what you do.”

Soon after Delrahim’s speech, it was reported that the F.T.C. had issued subpoenas for data regarding third-party sales on Amazon. In July, the E.U. declared that it was investigating Amazon, and the U.S. House of Representatives held a hearing and interrogated an Amazon lawyer about how the company harvests data. Representative David Cicilline, a Democrat from Rhode Island, asked the lawyer, “You’re saying that you don’t use that in any way to promote Amazon products? I remind you, sir, you’re under oath.” The attorney replied that the firm shows customers only the best product, regardless of who profits from the sale, and that Amazon did nothing untoward.

Many members of Congress suspect otherwise. Cicilline, who chairs the House’s antitrust subcommittee, told me, “There’s bipartisan consensus that we have a responsibility to get these markets working again. More competition means better protection of privacy. It means better control of your data. It means more innovation.” Elizabeth Warren, one of the most forceful critics of the tech industry, has said that, if she wins the Presidency, she intends to break up Amazon, Facebook, and Google. She has proposed making it illegal for companies such as Amazon to own online marketplaces and at the same time to sell goods on those platforms. “Amazon crushes small companies,” Warren wrote, in a plan for expanding online competition. If she is elected, she said, “small businesses would have a fair shot to sell their products on Amazon without the fear of Amazon pushing them out of business.”

Other regulators and lawmakers are more measured in their proposals and their rhetoric, but a loose consensus has emerged around a group of concerns, which some people refer to as the Four “C”s. The first is concentration. A high-ranking F.T.C. official told me, “The bigger a tech company becomes, the more they can bully, so we need to put hard caps on how big companies like that can grow, on what they can acquire.”

Rohit Chopra, one of the F.T.C.’s five commissioners, told me that the second “C” is the conflict of interest that comes from “both controlling the pipe and selling the oil.” Chopra, who agreed to speak only about antitrust generally and not about Amazon specifically, explained, “If you do both, you will structure your marketplace in a way that ultimately is self-dealing, and you will use the data from those who sell on your marketplace to benefit yourself.” There’s a long history of the government forcing industries to separate distribution and sales; for years, movie studios have generally been prohibited from owning movie theatres.

“Open it.”Cartoon by Charlie Hankin

The next area of concern is contracts. Big tech companies often make highly restrictive deals with smaller venders. Amazon retains a contractual right to hold sellers’ revenues for long periods after a sale, and imposes limits on what data sellers can share with other companies. Another F.T.C. commissioner, Rebecca Kelly Slaughter, told me, “There are a lot of terms that go into boilerplate contracts that consumers or workers don’t really have an opportunity to negotiate. It is absolutely appropriate for us to be thinking about banning those.”

Lastly, regulators worry about the complexity of current antitrust law. “You really have to be an expert, or hire an expert attorney, if you feel like one of these companies is acting inappropriately,” an F.T.C. official said. “The law only works when it is simple enough for the little guy to bring an action on their own.”

Senator Amy Klobuchar, the ranking member of the Senate’s subcommittee on antitrust, told me that such reforms are bound by a central idea: “The big tech companies are completely reshaping the way we buy goods and sell goods in the marketplace, our privacy rules, and our democracy rules, without any checks and balances from the government.” She continued, “So many people are finally getting tired of the dominance. When Amazon starts owning Whole Foods, when they control the producers, when they control all the parts of the supply chain—people deserve a level playing field.” American history, Klobuchar said, shows that such imbalances can spark widespread activism. “This goes back to the Founders and the Boston Tea Party,” she said. “These are highly emotional political moments.”

Amazon has responded to the mounting political threat by expanding its lobbying efforts. Federal records indicate that, in 2018, Amazon lobbied more government bodies than any other U.S. tech company. It has made its case across Washington, to senators, representatives, the Treasury Department, the Department of Justice, even nasa. Much of Amazon’s lobbying has been devoted to winning government contracts: it is a leading contender for a ten-billion-dollar project to centralize the Department of Defense’s cloud computing. But a former federal official who works on antitrust issues told me that the company’s other lobbying was “about telling us that, if you even think about breaking up Amazon, you’re going to make markets less efficient, and there are going to be a lot of lost jobs—and Amazon employs a ton of people in your district.”

Amazon has a Twitter account devoted to cheery photographs and videos of lawmakers touring warehouses, posing alongside rows of Amazon trucks, and putting items in boxes. (If the videos are any indication, legislators are permitted to work much more slowly than Amazon productivity standards require.) Such theatrics used to serve the company well. However, a regulator who is familiar with Amazon’s lobbying said that “there’s been a bit of hubris, because, in the past, they were able to tell a story about how consumers love them. But now that’s changing, and it’s very concerning to them.”

According to Amazon insiders, Bezos adamantly refuses to consider slowing the company’s growth, fearing that its culture will break down if the pace slackens. He is determined to defend his creation aggressively. For years, Amazon was largely content to remain silent amid criticism—one Leadership Principle is “We accept that we may be misunderstood for long periods of time”—but the company now responds to nearly every provocation. In June, after Representative Alexandria Ocasio-Cortez said on television that Bezos’s wealth is “predicated on paying people starvation wages and stripping them of their ability to access health care,” Amazon’s communications and policy chief, Jay Carney, went on the attack, tweeting, “All our employees get top-tier benefits. I’d urge @AOC to focus on raising the federal minimum wage instead of making stuff up about Amazon.” That month, the Times ran an article accusing the company of “a kind of lawlessness” in its bookstore: counterfeit medical textbooks were for sale, and Amazon seemed unconcerned with “the authenticity, much less the quality, of what it sells.” A long rebuttal appeared on Amazon’s blog, arguing that “nothing could be further from the truth” and accusing the reporter of cherry-picking examples. Last year, Amazon tapped a group of warehouse workers to be a kind of Twitter rapid-response army, deputizing them as “ambassadors.” When a Bernie Sanders supporter tweeted that Amazon was anti-union, a fulfillment-center employee, @AmazonFCJanet, fired back, “Unions are thieves.”

Amazon offered few specifics on its lobbying activities. “There is abundant competition in the retail sector, and many retailers are thriving,” the company wrote in response to questions. “There is no power imbalance between Amazon and the sellers and vendors who work with us.”

Executives at Amazon have argued to regulators and lawmakers that the company is distinct in fundamental ways from Facebook and Google. Whereas those firms essentially created their industries, Amazon’s realm—the retail marketplace—has existed since the dawn of commerce. “The idea that there is only one marketplace is demonstrably false,” the company wrote in a statement, noting that Walmart still brings in more revenue than it does. Amazon executives point out that, if you ignore the distinction between online and real-world sales, Amazon is responsible for about four per cent of U.S. retail transactions. “If we do not compete on prices, selection, delivery speed and customer service, customers will choose other competitors,” the company statement noted.

Part of Amazon’s defensiveness stems from executives’ conviction that regulators’ concerns are based not on logic but on a misguided understanding of retail. One executive told me that the real problem is that Amazon is disproportionately popular among lawmakers. Congressional aides, high-profile journalists, and other élites often use Amazon to buy kitchen supplies and Christmas gifts. They watch “The Marvelous Mrs. Maisel” and shop at Whole Foods. They don’t even know the location of the nearest Walmart, the executive said, and therefore think that Amazon is much more powerful than it really is.

Perhaps it’s true that policymakers would have a broader perspective if they logged more hours at Costco. But, in any case, Amazon now has such a severe image problem that it can no longer count on being able to do whatever it pleases. High-ranking executives allow that there are some limited concessions Bezos is willing to make, such as donating more of his wealth to charity. And Amazon may agree to strengthen its oversight of drivers and of workers’ safety. One executive told me that Amazon is determined to remain open-minded and polite with regulators; one of Microsoft’s missteps in the nineties, he said, was that it was dismissive. But few of the current Amazon executives I spoke with said that the company needed to make major changes. And few believed that regulators would compel them to do so. After all, Amazon employs hundreds of thousands of people across the nation, many of them voters, and has warehouses in dozens of states. A tech lobbyist told me, “Neither Facebook nor Google has that. Sometimes you survive just because there are other targets to absorb the blows.”

Bezos, after attracting scandal earlier this year, has lately sought to recede. His media appearances have become rare and highly scripted. When he was onstage this past summer at one of his few recent public outings—an Amazon conference in Las Vegas—the performance was studiously boring, a clear attempt to rob himself of glamour. While Bezos was droning on, a protester jumped on the stage, shouting something about chickens and terrible conditions on industrial farms. Bezos froze, as if worried that the smallest bacterium of controversy might prove contagious. After the woman was removed, he glanced around and said, “I’m sorry—where were we?”

Within Amazon, there are concerns that, no matter how strenuously Bezos embraces banality, he can’t be dull enough. “We have all this attention now,” a former executive complained. Since Bezos and Lauren Sanchez went public with their relationship, they have regularly appeared in gossip columns. The New York Post’s Page Six has reported on the swimsuit that Bezos wore in Saint-Tropez (“quirky, octopus-print trunks”), and how he met Sanchez’s parents at the N.F.L. Hall of Fame (“This all leads Amazon sources to ponder how long it will be before the couple say ‘I do’ ”).

The government’s scrutiny of General Motors never scored any fatal hits—one antitrust lawsuit dragged on for years, ending in a dismissal—but the scar tissue was damaging enough. David Farber, a University of Kansas historian who wrote a biography of Alfred P. Sloan, told me that the G.M. executive “didn’t see himself as someone that needed to be loved or respected by the public, but eventually even he gave in.” He noted a pattern in American history: “There’s an economic revolution, it creates amazing new opportunities, and then the companies that seize those opportunities become so powerful that the people revolt—they say the winners have become too powerful, they start attacking the people who are the embodiments of winning, sometimes with gossip, sometimes with facts. And then we have an era of constraint enforced by the federal government.” We may be at a breaking point now. “It’s like the eighteen-eighties or the nineteen-thirties all over again,” Farber said. “The pressure is going to continue building, the powerful are going to continue being watched and criticized and gawked at, until something pops.”

Jeff Wilke, the Bezos deputy, told me that all process companies eventually falter. The challenge is to stave off decline as long as possible. Day Two, he said, “is inevitable—the question is when.” When Day Two does arrive at Amazon, at least Ian Freed, the executive who oversaw the Kindle and the Echo, won’t have to suffer through it. A few years ago, he consulted an internal Amazon application called the Old Fart Tool, which shows employees how many new people have been hired since their first day, and discovered that more than three hundred thousand workers had joined Amazon since he started there. Freed had come to Amazon because he loved being at a place that moved fast and did the impossible. He was proud of his work—once, while on vacation in Mexico, he had peeked into his sons’ hotel room and seen their Game Boys lying on the nightstand while they read on their Kindles. “That was pretty special,” he told me. “For the rest of my life, I can tell my grandchildren that I built the Amazon Kindle and the Amazon Echo.”

Yet Amazon had changed, and Freed missed the old days. He wanted to spend more time living by Leadership Principles that were loftier than simply selling everything as fast and as cheaply as possible. He wanted to see if his next flywheels could power a project with higher ideals. Such goals wouldn’t likely have satisfied Amazon’s constant hunger, but to Freed they seemed satisfying enough. And Freed no longer had to worry about earning a salary: during his tenure at Amazon, its stock price had gone from forty-three dollars to $1,052 a share. And so in 2017 he quit Amazon, and not long afterward he founded Bamboo Learning, a company that builds voice-activated education software. One product teaches kids how to do division when they say, “Alexa, open Bamboo Math.” The startup has only two full-time employees. Freed just signed his first big contract, with the publisher Highlights for Children. “It just got to the point where I wanted to do something different,” he told me. “I wanted to work with nonprofits and feel like I’m contributing in a different way. If this succeeds, we’ll bring education to parts of the world where you can’t get print books, where companies don’t deliver things overnight, where it’s not even guaranteed that people are literate.”

Freed is building something that is neither strictly a product company nor a process company. It will be both grander and more modest in its ambitions than Amazon, which Bezos has famously described as “the everything store.” Freed told me, “It’s another chance to change the world. A smaller change, but it’s real, and it feels important to me. It’s something that deserves all of what I’ve learned.” ♦

Why Uber And Amazon Are Going After Truckers

The trucking industry is worth hundreds of billions of dollars per year. Uber is going after this market with Uber Freight, an online platform that matches truckers with shippers looking to move cargo from one place to another.

In 2018, about 3.5 million people in the United States were employed as truck drivers. With the explosion of Amazon and other e-commerce companies, the demand for truck drivers has been outpacing supply. In 2018, the United States trucking industry was short over 60,000 drivers. If the trend holds, experts predict there could be a 160,000 driver shortage by 2028.

Amazon Changed Search Algorithm in Ways That Boost Its Own Products

The e-commerce giant overcame internal dissent from engineers and lawyers, people familiar with the move say

Amazon.com Inc. AMZN -1.87% has adjusted its product-search system to more prominently feature listings that are more profitable for the company, said people who worked on the project—a move, contested internally, that could favor Amazon’s own brands.

Late last year, these people said, Amazon optimized the secret algorithm that ranks listings so that instead of showing customers mainly the most-relevant and best-selling listings when they search—as it had for more than a decade—the site also gives a boost to items that are more profitable for the company.

The adjustment, which the world’s biggest online retailer hasn’t publicized, followed a yearslong battle between executives who run Amazon’s retail businesses in Seattle and the company’s search team, dubbed A9, in Palo Alto, Calif., which opposed the move, the people said.

Any tweak to Amazon’s search system has broad implications because the giant’s rankings can make or break a product. The site’s search bar is the most common way for U.S. shoppers to find items online, and most purchases stem from the first page of search results, according to marketing analytics firm Jumpshot.

When people search for products on Amazon*, nearly two-thirds of all product clicks come from the first page of results…

Row 1

2

3

4

5

6

7

8

First page

Other pages

0

20

40

60%

…so the proliferation of Amazon’s private-label products on the first page makes it more likely people choose those items.

Search for ‘men’s button down shirts’

Search for ‘paper towels’

Amazon private- label products

Sponsored content

*Based on a study in 2018 of anonymous consumer actions on mobile and desktop devices

Note: Product searches conducted Aug. 28

Source: Jumpshot

Angela Calderon/THE WALL STREET JOURNAL

The issue is particularly sensitive because the U.S. and the European Union are examining Amazon’s dual role—as marketplace operator and seller of its own branded products. An algorithm skewed toward profitability could steer customers toward thousands of Amazon’s in-house products that deliver higher profit margins than competing listings on the site.

Amazon’s lawyers rejected an initial proposal for how to add profit directly into the algorithm, saying it represented a change that could create trouble with antitrust regulators, one of the people familiar with the project said.

The Amazon search team’s view was that the profitability push violated the company’s principle of doing what is best for the customer, the people familiar with the project said. “This was definitely not a popular project,” said one. “The search engine should look for relevant items, not for more profitable items.”

Amazon CEO Jeff Bezos has propounded a ‘customer obsession’ mantra. PHOTO: JIM WATSON/AFP/GETTY IMAGES

Amazon said it has for many years considered long-term profitability and does look at the impact of it when deploying an algorithm. “We have not changed the criteria we use to rank search results to include profitability,” said Amazon spokeswoman Angie Newman in an emailed statement.

Amazon declined to say why A9 engineers considered the profitability emphasis to be a significant change to the algorithm, and it declined to discuss the inner workings of its algorithm or the internal discussions involving the algorithm, including the qualms of the company’s lawyers.

The change could also boost brand-name products or third-party listings on the site that might be more profitable than Amazon’s products. And the algorithm still also stresses longstanding metrics such as unit sales. The people who worked on the project said they didn’t know how much the change has helped Amazon’s own brands.

Amazon’s Ms. Newman said: “Amazon designs its shopping and discovery experience to feature the products customers will want, regardless of whether they are our own brands or products offered by our selling partners.”

Antitrust regulators for decades have focused on whether companies use market power to squeeze out competition. Amazon avoided scrutiny partly because its competitive marketplace of merchants drives down prices.

A majority of Amazon’s sales come from retail, but a majority of its operating profits come from its cloud-computing unit.

Retail, subscriptions,

advertising and services

Amazon Web

Services

Percentage of total sales

86.9%

13.1%

Retail sales and

commissions: 75%

Percentage of operating income

42.1%

57.9%

Note: First half of 2019; Amazon doesn’t break out operating income for retail.

Source: the company

Now, some lawmakers are calling for Washington to rethink antitrust law to account for big technology companies’ clout. In Amazon’s case, they say it can bend its dominant platform to favor its own products. Sen. Elizabeth Warren (D., Mass.) has argued Amazon stifles small businesses by unfairly promoting its private-label products and underpricing competitors. Amazon has disputed this claim.

During a House antitrust hearing in July, lawmakers pressed Amazon on whether it used data gleaned from other sellers to favor its own products. “The best purchase to you is an Amazon product,” said Rep. David Cicilline (D., R.I.). “No that’s not true,” replied Nate Sutton, an Amazon associate general counsel, saying Amazon’s “algorithms are optimized to predict what customers want to buy regardless of the seller.” House Judiciary Committee leaders recently asked Amazon to provide executive communications related to product searches on the site as part of a probe on anticompetitive behavior at technology companies.

Amazon says it operates in fiercely competitive markets, it represents less than 1% of global retail and its private-label business represents about 1% of its retail sales.

Amazon executives have sought to boost profitability in its retail business after years of focusing on growth. A majority of its $12.4 billion in operating income last year came from its growing cloud business.

Pressure on engineers

An account of Amazon’s search-system adjustment emerges from interviews with people familiar with the internal discussions, including some who worked on the project, as well as former executives familiar with Amazon’s private-label business.

SHARE YOUR THOUGHTS

When you search for products on Amazon, how should it determine what listings to show? Join the conversation below.

The A9 team—named for the “A” in “Algorithms” plus its nine other letters—controls the all-important search and ranking functions on Amazon’s site. Like other technology giants, Amazon keeps its algorithm a closely guarded secret, even internally, for competitive reasons and to prevent sellers from gaming the system.

Customers often believe that search algorithms are neutral and objective, and that results from their queries are the most relevant listings.

Executives from Amazon’s retail divisions have frequently pressured the engineers at A9 to surface their products higher in search results, people familiar with the discussions said. Amazon’s retail teams not only oversee its own branded products but also its wholesale vendors and vast marketplace of third-party sellers.

Amazon’s private-label team in particular had for several years asked A9 to juice sales of Amazon’s in-house products, some of these people said. The company sells over 10,000 products under its own brands, according to research firm Marketplace Pulse, ranging from everyday goods such as AmazonBasics batteries and Presto paper towels, to clothing such as Lark & Ro dresses.

Inside an Amazon fulfillment center. PHOTO: KRISZTIAN BOCSI/BLOOMBERG NEWS

Amazon’s private-label business, at about 1% of retail sales, would represent less than $2 billion in 2018. Investment firm SunTrust Robinson Humphrey estimates the private-label business will post $31 billion in sales by 2022, more than Macy’s Inc. ’s annual revenue last year.

The private-label executives argued Amazon should promote its own items in search results, these people said. They pointed to grocery-store chains and drugstores that showcase their private-label products alongside national brands and promote them in-store.

A9 executives pushed back and said such a change would conflict with Chief Executive Jeff Bezos’ “customer obsession” mantra, these people said. The first of Amazon’s longstanding list of 14 leadership principles requires managers to focus on earning and keeping customer trust above all. Amazon often repeats a line from that principle: “Leaders start with the customer and work backwards.”

One former Amazon search executive said: “We fought tooth and nail with those guys, because of course they wanted preferential treatment in search.”

For years, A9 had operated independently from the retail operations, reporting to its own CEO. But the search team, in Silicon Valley about a two-hour flight from Seattle, now reports to retail chief Doug Herrington and his boss Jeff Wilke —effectively leaving search to answer to retail.

After the Journal’s inquiries, Amazon took down its A9 website, which had stood for about a decade and a half. The site included the statement: “One of A9’s tenets is that relevance is in the eye of the customer and we strive to get the best results for our users.”

Mr. Herrington’s retail team lobbied for the adjustment to Amazon’s search algorithm that led to emphasizing profitability, some of the people familiar with the discussions said.

When a customer enters a search query for a product on Amazon, the system scours all listings for such an item and considers more than 100 variables—some Amazon engineers call them “features.” These variables might include shipping speed, how highly buyers have ranked product listings and recent sales volumes of specific listings. The algorithm weighs those variables while calculating which listings to present the customer and in which order.

Nate Sutton, an Amazon associate general counsel, at a House Judiciary Subcommittee hearing on antitrust in July.PHOTO: ANDREW HARRER/BLOOMBERG NEWS

The algorithm had long placed a priority on variables such as unit sales—a proxy for popularity—and search-term relevance, because they tend to predict customer satisfaction. A listing’s profitability to Amazon has never been one of these variables.

Profit metric

Amazon retail executives, especially those in its private-label business, wanted to add a new variable for what the company calls “contribution profit,” considered a better measure of a product’s profitability because it factors in non-fixed expenses such as shipping and advertising, leaving the amount left over to cover Amazon’s fixed costs, said people familiar with the discussion.

Amazon’s private-label products are designed to be more profitable than competing items, said people familiar with the business, because the company controls the manufacturing and distribution and cuts out intermediaries and marketing costs.

Amazon’s lawyers rejected the overt addition of contribution profit into the algorithm, pointing to a €2.42 billion fine ($2.7 billion at the time) that Alphabet Inc.’s Google received in 2017 from European regulators who found it used its search engine to stack the deck in favor of its comparison-shopping service, said one of the people familiar with the discussions. Google has appealed the fine and has made changes to Google Shopping in response to the European Commission’s order.

To assuage the lawyers’ concerns, Amazon executives looked at ways to account for profitability without adding it directly to the algorithm. They turned to the metrics Amazon uses to test the algorithm’s success in reaching certain business objectives, said the people who worked on the project.

When engineers test new variables in the algorithm, Amazon gauges the results against a handful of metrics. Among these metrics: unit sales of listings and the dollar value of orders for listings. Positive results for the metrics correlated with high customer satisfaction and helped determine the ranking of listings a search presented to the customer.

Now, engineers would need to consider another metric—improving profitability—said the people who worked on the project. Variables added to the algorithm would essentially become what one of these people called “proxies” for profit: The variables would correlate with improved profitability for Amazon, but an outside observer might not be able to tell that. The variables could also inherently be good for the customer.

Amazon commands more than one-third of U.S. retail dollars spent online.

Share of 2018 online retail sales

Amazon

36.5%

eBay

6.9%

Walmart

4.0%

Apple

3.9%

The Home Depot

1.6%

Source: eMarketer

For the algorithm to understand what was most profitable for Amazon, the engineers had to import data on contribution profit for all items sold, these people said. The laborious process meant extracting shipping information from Amazon warehouses to calculate contribution profit.

In an internal system called Weblab, A9 engineers tested proposed variables for the algorithm for weeks on a subset of Amazon shoppers and compared the impact on contribution profit, unit sales and a few other metrics against a control group, these people said. When comparing the results of the groups, profitability now appeared alongside other metrics on a display called the “dashboard.”

Amazon’s A9 team has since added new variables that have resulted in search results that scored higher on the profitability metric during testing, said a person involved in the effort, who declined to say what those new variables were. New variables would also have to improve Amazon’s other metrics, such as unit sales.

A review committee that approves all additions to the algorithm has sent engineers back if their proposed variable produces search results with a lower score on the profitability metric, this person said. “You are making an incentive system for engineers to build features that directly or indirectly improve profitability,” the person said. “And that’s not a good thing.”

An Amazon warehouse in Mexico in July. PHOTO: CARLOS JASSO/REUTERS

Amazon said it doesn’t automatically shelve improvements that aren’t profitable. It said, as an example, that it recently improved the discoverability of items that could be delivered the same day even though it hurt profitability.

Amazon’s Ms. Newman said: “When we test any new features, including search features, we look at a number of metrics, including long term profitability, to see how these new features impact the customer experience and our business as any rational store would, but we do not make decisions based on that one metric.”

In some ways, Amazon’s broader shift from showing relevant search results is noticeable on the site. Last summer, it changed the default sorting option—without publicizing the move—to “featured” after ranking the search results for years by “relevance,” according to a Journal analysis for this article of screenshots and postings by users online. Relevance is no longer an option in the small “sort by” drop-down button on the top right of the page.

Walmart Builds a Secret Weapon to Battle Amazon for Retail’s Future

The world’s largest retailer is using Jetblack, a money-losing personal-shopping service, to develop artificial intelligence to compete with e-commerce giant Amazon

Walmart is using Jetblack’s army of human agents to train an artificial intelligence system that could someday power an automated personal-shopping service, preparing Walmart for a time when the search bar disappears and more shopping is done through voice-activated devices, said Jetblack CEO Jenny Fleiss.

.. Walmart is competing with Amazon, which has $233 billion in annual sales, including web services.

.. Walmart is the world’s biggest retailer by revenue, with $514 billion in annual sales, but e-commerce makes up only a small percentage. That’s out of sync with where retail is growing fastest. Across the U.S., online shopping accounted for 9.7% of total retail sales last year and grew 14.2% from the previous year, according to the Commerce Department.

Walmart bought India’s biggest e-commerce site. It has been buying up small online retailers including men’s apparel company Bonobos and is testing autonomous cargo vans for home grocery delivery in places such as Surprise, Ariz.

.. it is one of the biggest gambles Walmart is making to attract wealthy shoppers and burnish its tech credentials.

Walmart primarily views the company as a research hub on AI and voice shopping.

.. Marc Lore, head of Walmart’s U.S. e-commerce business, had in mind a Jetblack-like service before Walmart bought his e-commerce startup Jet.com in 2016. That website sells products that appeal to urban shoppers, including higher-end brands that won’t sell on Walmart.com.

Mr. Lore was fascinated by the idea of a premium service that allowed shoppers to order products for speedy delivery by speaking into the air, said people familiar with his thinking. “This is a Marc Lore passion project,” said one former Walmart executive.

.. One former Walmart executive said Jetblack is “the first thing that we’ve tried that will unwind you” consistently from Amazon Prime. “The early indication is that it has legs,” even if the point isn’t earning profits, the former executive said.

Jetblack members are spending an average of $300 a week for products because the ease of the service encourages more frequent purchases ..

.. The average shopper is buying more than 10 items a week, said Ms. Fleiss. Average spending a week is higher than last September, said a company spokesman, but he declined to say how much Jetblack members spend a week or how many of those products come from Walmart.

.. Customer-service agents, often recent college graduates drawn to the startup culture of Jetblack, need to become experts on wealthy New York City moms. Agents have two weeks of training, in part to learn what products babies need as they move through different developmental phases so they can make better product recommendations.

.. Moms—the vast majority of members—sometimes text fast requests like “reorder cereal.” When a Jetblack member joins, an employee usually goes to the customer’s home to inventory the products the person uses, giving agents a database of frequent purchases. Software automatically suggests a product if it is a frequent purchase or was scanned in the customer’s home.

.. It takes agents slightly longer to place an order for “item requests,” when the shopper knows exactly what they want but hasn’t ordered it before. Even more time-consuming are “recommendations,” open-ended requests such as “I need a new yoga mat” or “I need a birthday present for a 9-year-old.”

.. Agents consult a file that combines past purchases, products agents have researched and recommendations made by Jetblack merchandising workers, then suggest around three items for the customer to choose from, current and former employees said. Sometimes agents head to Google to do research, said one of these people.

.. Through the dialogue, the system is learning which follow up questions to ask, said Ms. Fleiss. For example, if a shopper asks for a new stroller, the system might learn to next ask “For how many children?” and “Do you need your child to nap in the stroller?” Members buy one of the recommended products 80% of the time, she said.

.. Jetblack also learned it still needs traditional technology. It created a companion app because some shoppers don’t like to update credit card information or review past orders over text.

Workers stock up on frequently purchased items by taking a daily van to a Jet.com warehouse and Walmart stores in New Jersey, since New York City has no physical Walmart stores, ordering products online for pickup. Later this year Jetblack plans to use a new Walmart fulfillment center in the Bronx to collect some products faster, said a spokesman.

The Ethical Dilemma Facing Silicon Valley’s Next Generation

Stanford has established itself as the epicenter of computer science, and a farm system for the tech giants. Following major scandals at Facebook, Google, and others, how is the university coming to grips with a world in which many of its students’ dream jobs are now vilified?

At Stanford University’s business school, above the stage where Elizabeth Holmes once regurgitated the myths of Silicon Valley, there now hangs a whistle splattered in blood. More than 500 people have gathered to hear the true story of Theranos, the $9 billion blood-testing company Holmes launched in 2004 as a Stanford dropout with the help of one of the school’s famed chemical engineering professors.

When Holmes was weaving the elaborate lies that ultimately led to the dissolution of her company, she leaned heavily on tech truisms that treat dogged pursuit of market domination as a virtue. “The minute that you have a backup plan, you’ve admitted that you’re not going to succeed,” she said onstage in 2015. But Shultz and Cheung, who faced legal threats from Theranos for speaking out, push back against the idea of pursuing a high-minded vision at all costs. “We don’t know how to handle new technologies anymore,” Cheung says, “and we don’t know the consequences necessarily that they’ll have.”

The words resonate in the jam-packed auditorium, where students line up afterward to nab selfies with and autographs from the whistleblowers. Kendall Costello, a junior at Stanford, idolized Holmes in high school and imagined working for Theranos one day. Now she’s more interested in learning how to regulate tech than building the next product that promises to change the world. “I really aspired to kind of be like her in a sense,” Costello says. “Then two years later, in seeing her whole empire crumble around her, in addition to other scandals like Facebook’s Cambridge Analytica and all these things that are coming forward, I was just kind of disillusioned.”

..But the endless barrage of negative news in tech, ranging from Facebook fueling propaganda campaigns by Russian trolls to Amazon selling surveillance software to governments, has forced Stanford to reevaluate its role in shaping the Valley’s future leaders. Students are reconsidering whether working at Google or Facebook is landing a dream job or selling out to craven corporate interests. Professors are revamping courses to address the ethical challenges tech companies are grappling with right now. And university president Marc Tessier-Lavigne has made educating students on the societal impacts of technology a tentpole of his long-term strategic plan.

As tech comes to dominate an ever-expanding portion of our daily lives, Stanford’s role as an educator of the industry’s engineers and a financier of its startups grows increasingly important. The school may not be responsible for creating our digital world, but it trains the architects. And right now, students are weighing tough decisions about how they plan to make a living in a world that was clearly constructed the wrong way. “To me it seemed super empowering that a line of code that I wrote could be used by millions of people the next day,” says Matthew Sun, a junior majoring in computer science and public policy, who helped organize the Theranos event. “Now we’re realizing that’s maybe not always a good thing.”

.. Because membership costs $21,000 per year, the career fairs tend to attract only the most renowned firms.

Honestly, I think they’re horrific,” says Vicki Niu, a 2018 Stanford graduate who majored in computer science. She recalls her first career fair being as hectic as a Black Friday sale, with the put-on exclusivity of a night club. (Students must present their Stanford IDs to enter the tent.) But like other freshmen, she found herself swept up in the pursuit of an internship at a large, prestigious tech firm. “Everybody is trying to get interviews at Google and Facebook and Palantir,” she says. “There’s all this hype around them. Part of my mind-set coming in was that I wanted to learn, but I think there was definitely also this big social pressure and this desire to prove yourself and to prove to people that you’re smart.”

Stanford’s computer science department has long been revered for its graduate programs—Google was famously built as a research project by Ph.D. students Larry Page and Sergey Brin—but the intense interest among undergrads is relatively new. In 2007, the school conferred more bachelor’s degrees in English (92) than computer science (70). The next year, though, Stanford revamped its CS curriculum from a one-size-fits-all education to a more flexible framework that funneled students along specialized tracks such as graphics, human-computer interaction, and artificial intelligence. “We needed to make the major more attractive, to show that computer science isn’t just sitting in a cube all day,” Mehran Sahami, a computer science professor who once worked at Google, said later.

The change in curriculum coincided with an explosion of wealth and perceived self-importance in the Valley. The iPhone opened up the potential for thousands of new businesses built around apps, and when its creator died he earned rapturous comparisons to Thomas Edison. Facebook emerged as the fastest-growing internet company of all time, and the Arab Spring made its influence seem benign rather than ominous. As the economy recovered from the recession, investors decided to park their money in startups like Uber and Airbnb that might one day become the next Google or Amazon. A 2013 video by the nonprofit Code.org featured CEOs, Chris Bosh, and will.i.am comparing computer programmers to wizards, superheroes, and rock stars.

Stanford and its students eagerly embraced this cultural shift. John Hennessy, a computer science professor who became president of the university from 2000 to 2016, served on Google’s board of directors and is now the executive chairman of Google parent company Alphabet. LinkedIn founder and Stanford alum Reid Hoffman introduced a new computer science course called Blitzscaling and brought in high-profile entrepreneurs to teach students how to “build massive organizations, user bases, and businesses, and to do so at a dizzyingly rapid pace.” (Elizabeth Holmes was among the speakers.) Mark Zuckerberg became an annual guest in Sahami’s popular introductory computer science class. “It just continued to emphasize how privileged Stanford students are in so many ways, that we have the CEO of Facebook taking time out of his day to come talk to us,” says Vinamrata Singal, a 2016 graduate who had Zuckerberg visit her class freshman year. “It felt really surreal and it did make me excited to want to continue studying computer science.”

In 2013, Stanford began directly investing in students’ companies, much like a venture capital firm. Even without direct Stanford funding, the school’s proximity to wealth helped plenty of big ideas get off the ground. Evan Spiegel, who was a junior at Stanford in 2011 when he started working on Snapchat, connected with his first investor via a Stanford alumni network on Facebook. “Instead of starting a band or trying to make an independent movie or blogging, people would get into code,” says Billy Gallagher, a 2014 graduate who was the editor-in-chief of the school newspaper. “It was a similar idea to, ‘Here’s our band’s vinyl or our band’s tape. Come see us play.’”

..But it’s not just that coding was a creative outlet, as is often depicted in tech origin stories. Working at a big Silicon Valley company also became a path to a specific kind of upper-crust success that students at top schools are groomed for. “Why do so many really bright young kids go into consulting and banking?” asks Gallagher. “They’re prestigious so your parents can be proud of you, they pay really well, and they put you on a career path to open up new doors. Now we’re seeing that’s happening a lot with Google and Facebook.”

By the time Niu arrived in 2014, computer science had become the most popular major on campus and 90 percent of undergrads were taking at least one CS course. As a high schooler, her knowledge of Silicon Valley didn’t extend much further than The Internship, a Vince Vaughn–Owen Wilson comedy about working at Google that doubled as a promotional tool for the search giant. She soon came to realize that landing a job at one of the revered tech giants or striking it rich with an app were Stanford’s primary markers of success. Her coursework was largely technical, focusing on the process of coding and not so much on the outcomes. And in the rare instances when Niu heard ethics discussed in class, it was often framed around the concerns of tech’s super-elite, like killer robots destroying humanity in the future. “In my computer science classes and just talking to other people who were interested in technology, it didn’t seem like anybody really cared about social impact,” she says. “Or if they did, they weren’t talking about it.”

In the spring of her freshman year, Niu and two other students hosted a meeting to gauge interest in a new group focused on socially beneficial uses of technology. The computer science department provided funding for red curry and pad thai. Niu was shocked when the food ran out, as more than 100 students showed up for the event. “Everybody had the same experience: ‘I’m a computer science student. I’m doing this because I want to create an impact. I feel like I’m alone.’”

From this meeting sprang the student organization CS + Social Good. It aimed to expose students to professional opportunities that existed outside the tech giants and the hyperaggressive startups that aspired to their stature. In its first year, the group developed new courses about social-impact work, brought in speakers to discuss positive uses of technology, and offered summer fellowships to get students interning at nonprofits instead of Apple or Google. Hundreds of students and faculty engaged with the organization’s programming.

In Niu’s mind, “social good” referred mainly to the positive applications of technology. But stopping bad uses of tech is just as important as promoting good ones. That’s a lesson the entire Valley has been forced to reckon with as its benevolent reputation has unraveled. “Most of our programming had been, ‘Look at these great ways you can use technology to help kids learn math,’” Niu says. “There was this real need to not only talk about that, but to also be like, ‘It’s not just that technology is neutral. It can actually be really harmful.’”

Many students find it difficult to pinpoint a specific transgression that flipped their perception of Silicon Valley, simply because there have been so many.

The torrid pace of bad news has been jarring for students who entered school with optimistic views of tech. Nichelle Hall, a senior majoring in computer science, viewed Google as the ideal landing spot for an aspiring software engineer when she started college. “I associated it so much with success,” she says. “It’s the first thing I thought about when I thought about technology.” But when she was offered an on-site interview for a potential job at the search giant in the fall, she declined. Project Dragonfly, Google’s (reportedly abandoned) effort to bring a censored search engine to China, gave her pause. It wasn’t just that she objected to the idea on principle. She sensed that working for such a large corporation would likely put her personal morals and corporate directives in conflict. “They say don’t do evil and then they do things like that,” she says. “I wasn’t really into the big-company idea for that reason. … You don’t necessarily know what the intentions of your executives are.”

  • ..Google has hardly been the most damaged brand during the techlash. (The company says it has not seen a year-over-year decline in Stanford recruits to this point.)
  • Students repeatedly bring up Facebook as a company that’s fallen out of favor.
  • Uber, with its cascade of controversies, now has to “fight to try and get people in,” according to junior Jose Giron.
  • And Palantir, the secretive data-mining company started by Stanford alum Peter Thiel, has also lost traction due to Thiel’s ties to Trump and worries that the company could help the president develop tech to advance his draconian immigration policies. “There’s a growing concern over your personal decision where to work after graduation,” Sun says.

There’s a lot of personal guilt around pursuing CS. If you do that, people call you a sellout or you might view yourself as a sellout. If you take a high-paying job, people might say, ‘Oh, you’re just going to work for a big tech company. All you care about is yourself.’”

Landing a job at a major tech firm is often as much about prestige as passion, which is one reason the CS major has expanded so dramatically. But a company’s tarnished reputation can transfer to its employees. Students debate whether fewer of their peers are actually taking gigs at Facebook, or whether they’re just less vocal in bragging about it. At lunch at a Burmese restaurant on campus, Hall and Sun summed up the transition succinctly. “No one’s like, ‘I got an internship at Uber!’” Sun says. Hall follows up: “They’re like, ‘I got an internship … at Uber …’”

The concerns are bigger than which companies rise or fall in the estimation of up-and-coming engineers. Stanford and computer science programs across the country may not be adequately equipped to wade through the ethical minefield that is expanding along with tech’s influence. Sahami acknowledges that many computer science classes are designed to teach students how to solve technical problems rather than to think about the real-world issues that a solution might create. Part of the challenge comes from computer science being a young discipline compared to other engineering fields, meaning that practical examples of malpractice are emerging in real time from today’s headlines.

Vik Pattabi, a senior majoring in computer science, originally studied mechanical engineering. In those classes, students are constantly reminded of the 1940 collapse of Tacoma Narrows Bridge: A modern marvel was destroyed because its highly educated engineers did not foresee all the possible threats to their creation (in that case, the wind). Pattabi’s CS coursework hasn’t yet included a comparable example. “A lot of the second- and third-order effects that we see [in] Silicon Valley have happened in the last two or three years,” Pattabi says. “The department is trying to react as fast as it can, but they don’t have 30 years of case studies to work with.”

Another issue is the longstanding divide on campus between the engineering types—known as “techies”—and the humanities or social sciences majors, known as “fuzzies.” Though the school has focused more on interdisciplinary studies in recent years, there remains a gap in understanding that’s often filled in by stereotype. This sort of divide is a common aspect of college life, but the stakes feel higher when some of the students will one day be programming the algorithms that govern the digital world. “There’s things [said] like, ‘You can’t spell fascist without CS.’ People will tell you things like that,” Hall says. “I think people may feel antagonized.”

The school’s deep ties to the Bay Area’s corporate giants, long a much-touted recruitment tool, suddenly look different in light of the problems that the industry has created. At the January career fair, members of Students for the Liberation of All Peoples (SLAP), an activist group on campus that aims to disrupt Stanford’s “culture of apathy,” handed out flyers that urged students not to work at Amazon and Salesforce because of their commercial ties to ICE and the United States Border Patrol. (Employees at the companies have raised similar concerns.) “REFUSE to be part of the Stanford → racist tech pipeline,” the flyer reads, in part.

Two students in the group said they were asked to leave the career fair by Computer Forum officials. When the students refused to comply, they say they were escorted out by campus police under threat of arrest for disrupting a private event. A Stanford spokesperson confirmed the incident. “The protesting students were disruptive and asked by police to leave,” the spokesperson said in an emailed statement. “The students were given the option to protest outside the event or in White Plaza. They chose to leave.”

For members of SLAP, the exchange reinforced the ways in which Stanford institutionally and culturally cuts itself off from the issues occurring in the real world. “You might hear this idea of the ‘Stanford bubble,’ where Stanford students kind of just stay on campus and they just do what they need to do for their classes and their jobs,” says Kimiko Hirota, a SLAP member and junior majoring in sociology and comparative studies in race and ethnicity, who participated in the career fair protest. She said many of the students she talked to had no idea about the tech firms’ government contracts. “To me the amount of students on campus that are politically engaged and are actively using their Stanford privilege for a greater good is extremely small.”

The computer science major includes a “technology in society” course requirement that can be fulfilled by a number of ethics classes, and teaching students about their ethical responsibilities is a component of the department’s accreditation process. CS + Social Good has expanded its footprint on campus, teaching more classes and organizing more events like the Theranos talk starring the whistleblowers. Yet the flexibility of the CS major cuts both ways. It means that students who care to take a holistic approach to the discipline can combine rigorous training in code with an education in ethics; it also means that it remains all too easy for some students to avoid engaging with the practical ramifications of their work. “You can very much come to Stanford feeling very apathetic about the impact of the technology and leave just that way without any effort,” Hall says. “I don’t feel as though we are forced to encounter the impact.”

On a Wednesday afternoon, students spill into a lobby in front of a standing-room-only auditorium in the School of Education, where Jeremy Weinstein is talking about the promise and perils of using algorithms in criminal justice. Next year Californians will vote on a bill that would replace cash bail with a computerized risk-assessment system that calculates an arrested person’s likelihood of returning for a court appearance. The idea is to give people who can’t afford to make bail another way to get out of jail through a fairer policy. But such algorithms have been found to reinforce racial biases in the criminal justice system, according to a ProPublicainvestigation. Instead of being a solution to an unfair process, poorly implemented software could create an entirely new form of systemic discrimination. Students were asked to vote on whether they supported cash bail or the algorithm. The class was evenly split. Unlike in most CS classes, Weinstein could not offer students the comfort of a “correct” answer. “We need to deconstruct these algorithms in order to help people see that technology is not just something to be trusted,” he says. “It’s not just something that’s objective and fair because it’s numerical, but it actually reflects a set of choices that people make.”

Though Weinstein is a political science professor, he’s one of three educators leading the new version of the CS department’s flagship ethics course, CS181. Teaching with him are Sahami, the computer science professor, and Rob Reich, a political science professor and philosopher. The trio devised the course structure over a series of coffee-fueled meetings as the tech backlash unfolded during the past year and a half. After discussing algorithmic bias, the class will explore privacy in the age of facial recognition, the social impacts of autonomous technology, and the responsibilities of private platforms in regard to free speech. The coursework is meant to be hands-on. During the current unit, students must build their own risk-assessment algorithm using an actual criminal history data set, then assess it for fairness. “We run it like a talk show,” Weinstein says. “There’s a lot of call-and-response, asking questions, getting people to talk in small groups.”

While Stanford’s computer science program has had an ethics component for decades, this course marks the first time that experts in other fields are so directly involved in the curriculum. About 300 students have enrolled in the course, including majors in history, philosophy, and biology. It provides an opportunity for the techies and fuzzies to learn from one another, and for professors removed from the Valley’s tech culture to contextualize the industry’s societal impacts. In the course overview materials, the moral reckoning occurring in the tech sector today is compared to the advent of the nuclear bomb.

The course’s popularity is a sign that the gravity of the moment is weighing on many Stanford minds. Antigone Xenopoulos, a junior majoring in symbolic systems (a techie-fuzzie hybrid major that incorporates computer science, linguistics, and philosophy), is a research assistant for CS181. She wasn’t the only student who quoted a line from Spider-Man to me—with great power comes great responsibilitywhen referencing the current landscape. “If they’re going to give students the tools to have such immense influence and capabilities, [Stanford] should also guide those students in developing ethical compasses,” she says.

 ..While the early years of the decade saw prominent tech executives like Holmes and Zuckerberg teaching students how to lifehack their way to success, the new ethics course will bring in guest speakers from WhatsApp, Facebook, and the NSA to answer “hard questions,” Sahami says “I wouldn’t say industry is influencing Stanford,” he says. “I would say the relationship with industry allows us to have more authentic conversations where we’re really bringing in people who are decision-makers in these areas.”
.. Some of the more critical voices from within the industry are also taking on more permanent roles at Stanford. Alex Stamos, the former chief security officer at Facebook, taught a “hack lab” for non-CS majors last fall, helping them understand cybersecurity threats. He’s now developing a more advanced computer science course, to be piloted later this year, that explores trust and safety issues in the era of misinformation and widespread online harassment. Stamos led Facebook’s internal investigation into Russian political interference on the platform and clashed with top executives over how much of that information should be made public. He left the company in August to join Stanford, where he hopes to impart lessons from his time battling a digital attack that was waged not through hacking, but through ad purchases, incendiary memes, and politically charged Facebook events. “One of the things we don’t teach computer science students is all of the non-technically advanced abuses of technology that cause real harm,” Stamos says. “I want to expose students to [things like], ‘These are the mistakes that were made before, these are the kinds of problems that existed, and these are the company’s reactions to those mistakes.’”

Stamos rejects the idea that ethics is the correct framework to think about addressing tech’s most pressing issues. “The problem here is not that people are making decisions that are straight-up evil,” he says. “The problem is that people are not foreseeing the outcomes of their actions. Part of that is a lack of paranoia. One of our problems in Silicon Valley is we build products to be used the right way. … It’s hard to envision all the misuses unless you understand all the things that have come before.”

While he says that Stanford bears some responsibility for the Valley’s tunnel vision, he praises the school for welcoming tech leaders with recent, relevant experiences to help students prepare for emerging threats. “When I was going to school, computers were important, but we weren’t talking about building companies that might change history,” Stamos says. “The students who come to me are really interested in the impact of what they do on society.”

Stamos regularly fields questions from students about whether to work at Facebook or Google. He tells them that they should, not in spite of the companies’ mounting issues, but because of them.If you actually care about making communication technologies compatible with democracy, then the place to be is at one of the companies that actually has the problems,” he says. “Not working at the big places that could actually solve it does not make things better.”

The tech giants continue to consolidate power even as they face withering criticism. Facebook’s user base growth accelerated last quarter despite its scandals. Uber will go public this year at a valuation as high as $120 billion. Apple, Amazon, and Google are all planning to open large new offices around the country in the near future. And for all the optimistic talk of working at ethically minded startups among students, creation of nascent businesses is at roughly a 40-year low in the United States. Small firms that enter the terrain of the Frightful Five are typically acquired or destroyed.

It is hard to find a Stanford computer science student, even among the ethically minded set CS + Social Good has helped cultivate, who will publicly proclaim that they’ll never work for one of these dominant companies, as all of them offer opportunities for high pay, engaging individual work, and comforting job security. International students have to worry about securing work visas however they can; students on financial aid may need to make enough money to support other family members. And for many others, it’s not clear that anything that’s happened in the Valley is truly beyond the pale. In that sense, the engineers are just like us, aghast at the headlines but still clicking away inside a system that’s come to feel inescapable. “These events feel too big for most students to take into account,” says Jason He, a master’s student in electrical engineering. “At the end of the day, I think for a lot of students who have been paying a lot of money for their education, if the six-figure salary is offered, it’s pretty hard for students to turn down.”

There is still an opportunity, the thinking at Stanford goes, for every company to do good. Nichelle Hall, the senior who declined the Google interview, landed a job working on Medium’s trust and safety team. But she recognizes that she may have set her qualms aside if Google had been her only employment option. “Some of the feedback that CS + Social Good gets is, ‘Oh, the members end up working for Facebook, they end up working for Google,’” says Hall, who’s been involved with the organization since 2017. “People who care about this intersection of social impact and computer science will go to these companies and do a better job than if they weren’t interested in this stuff.”

Impact is the word that I heard more than any other while on campus. It’s how students framed their decision to go to Stanford, to pursue a career in computer science, to do good in the world after graduating. It’s a word that Hoffman used to describe his Blitzscaling class, and one Holmes used to explain to students why she dropped out of school. “I had the tools that I needed to be able to go out and begin making this impact,” she said. It’s the currency of Silicon Valley, that people spend for good and for ill.

The ability to create impact with a few lines of code has long been what separated software engineers from the rest of us, and turned the Valley into a self-proclaimed utopia of young rebels using technology to save the world from its older, antiquated self. But that’s not the image anymore. Now aspiring engineers draw a comparison between their chosen profession and investment banking. The finance industry wrecked the world a decade ago because of its misunderstanding of complex, automated systems that spun out of control—and its confidence that someone else would ultimately pay the price if things went wrong. You see this confidence in Zuckerberg’s incredulous response when anyone suggests that he resign, and in Google CEO Sundar Pichai’s initial refusal to testify before Congress. And you can see it at Stanford, where the endowment has never been higher, the fundraising has never been easier, and the career fair is still filled with slogans vowing to make the world a better place.

Perhaps this entire strip of land known as the Valley will fully calcify into a West Coast Wall Street, where the people with all the insider knowledge profit off the muppets who can’t stop using their products. If today’s young tech skeptics turn to cynics when they enter the working world, such a future is easy to imagine. But—and this is the hopeful, intoxicating, dangerous thing about technology—there’s always bright minds out there who think they can build a solution that just might fix this mess we’ve made. And people, especially young people, will always be enthralled by the romance of a new idea. “We’re creating things that haven’t necessarily existed before, and so we won’t be able to anticipate all the challenges that we have,” says Hall, who graduates in just four months. “But once we do, it’s important that we can reconcile them with grace and humility. I’m sure it will be a hard job, but it’s important that it’s hard. I’m up for the challenge.”