FOR IMMEDIATE RELEASE
Wednesday, March 30, 2022
Contact: [email protected], 571-316-6421
New survey shows how small-business owners feel cheated by the big tech giant; bipartisan legislation awaiting a vote in the Senate would bring relief
WASHINGTON, DC – Today, the Tech Oversight Project released the following statement in response to a bombshell new report from the Institute for Local Self-Reliance (ILSR), demonstrating how small-business owners feel underpinned, exploited, and cheated by Amazon:
“The Big Tech Lobby has lied, withheld information, and spent hundreds of millions in order to convince Congress that small businesses love platforms like Amazon — now it’s clear that this relationship is much more of a hostage-kidnapper situation,” said Sacha Haworth, Executive Director of The Tech Oversight Project. “The fact that small business owners want stronger oversight but are afraid to speak up for fear of retaliation should tell Congress everything they need to know. Fortunately, there is a solution: the bipartisan antitrust reform bills currently awaiting a vote in the Senate; it’s time for Congress to vote and get Big Tech monopolies off of small-business owners’ backs.”
Highlights from ILSR’s study:
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75% of small business owners believe that Amazon’s algorithms are not neutral, and that the tech giant favors its own products over other sellers.
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Nearly 75% of small business owners believe the fees they have to pay are unreasonable.
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69% believe it’s become harder and harder to operate a business on Amazon.
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55% of small business owners would not feel comfortable speaking out.
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80% believe Amazon needs regulation – 73% say it should be through antitrust.
It’s not just Amazon that has been bad for small businesses:
Facebook:
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Facebook’s algorithm has arbitrarily prevented small businesses from advertising, resulting in lost revenue. While larger advertisers can pay for a dedicated account representative, smaller advertisers receive slower customer service.
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Facebook changed its algorithm in 2018 to show users less commercial content, causing small businesses to lose revenue.
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Facebook, Instagram, and Google’s YouTube have created arbitrary and discriminatory standards around sexuality and sexual content. This has led to LGBTQ accounts on YouTube being demonetized and sexual wellness brands geared towards women and LGBTQ people to be banned from advertising on Facebook and Instagram. For example, in multiple instances on Facebook, ads mentioning menopause were banned, while erectile dysfunction medication ads were allowed.
Google:
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Google uses its monopoly to serve ads and its own content, gradually increasing the cost of ads and making them unaffordable to small businesses, whose search results suffer. Additionally, fake listings from Google Maps have made it harder to find legitimate small businesses,
Apple:
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Apple controls 71% of spending in the U.S. app market while Google controls the rest, harming innovation and raising costs for consumers. Small app developers report arbitrary decisions from Apple, fear of retaliation, poor customer service from Apple that customers mistakenly blame on the app makers, and exorbitant fees to operate on the App Store.
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In 2018, Amazon and Apple struck a deal that led to the removal of repair shops selling refurbished Apple products on Amazon, harming “hundreds if not thousands” of small repairers. Apple made repair shops pay to become “authorized service providers” and has lobbied against right-to-repair legislation.
Amazon:
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Amazon’s monopoly has allowed it to raise fees on third-party sellers by 11% from 2015 to 2020. Additionally, Amazon uses data from its third-party sellers to launch competing products and undercut the work of small businesses. Third-party sellers have reported that Amazon can arbitrarily suspend their accounts, leading to a “death knell.” Because of this, some third-party sellers fear retaliation from Amazon.
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In 2018, Amazon and Apple struck a deal that led to the removal of repair shops selling refurbished Apple products on Amazon, harming “hundreds if not thousands” of small repairers. Apple made repair shops pay to become “authorized service providers” and has lobbied against right-to-repair legislation.
Background:
The American Innovation and Choice Online Act (AICO) and the Open App Markets Act (AOMA) have passed out of the Senate Judiciary Committee with near-unanimous majorities and are awaiting a vote by the full Senate. Both bills target anti-competitive behavior by big tech giants and restore user choice and competition to the online marketplace. AICO would prohibit tech platforms from favoring their own products or services, disadvantaging rivals, or discriminating among businesses that use their platforms. OAMA is targeted at a single market – app stores. The non-discrimination bill would solve competition problems in other markets, like online advertising, e-commerce, and online search.
Small businesses have banded together before to push Congress to act against Big Tech monopolies, specifically Amazon, throwing their support behind AICO. Hundreds of thousands of independent and small businesses – including small hardware stores, office suppliers, booksellers, grocers and others from around the nation – formed a coalition in 2021 to back antitrust and enforcement.
Listen to what small business owners are saying:
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“Amazon takes too large a portion of my sales”
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“Products are constantly pulled from the site for no valid reason”
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“Seller assistance is non-existent”
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“They use small businesses to find lines that sell well”
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“The fees have increased and are unfair”
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“They are extortionists and thieves”