Federal trade laws and Amazon's regulatory compliance violations

The Consideration of Amazon Identify and discuss two to three specific laws that apply to the company. For example, the laws mentioned in the EEOC readings. The company that is the focus of this document is Amazon. Amazon is an extremely predominant business in contemporary society for a bevy of reasons. In order to initially discuss two to three specific laws that are applicable to this company, it is necessary to elucidate some of the more salient points of Amazon’s formation and background. The organization was begat by Jeff Bezos in the latter part of the 20th century. Initially, Amazon was formed as a means of retailing books to consumers. However, it was at variance with the typical structure of booksellers in that it was an online entity which specialized in selling and delivering books to consumers. This point is critical to remember, partially because of all the ways in which Amazon has significantly expanded beyond this initial line of business. Amazon was so successful in this first endeavor that it created broad ramifications for the retail market in general. Its success was directly attributed to the closure of national booksellers such as Borders and Barnes and Nobles. Moreover, its business model was so efficacious that the company was able to apply it to almost every other aspect of retail, from electronics to household needs. Today, there is virtually nothing which consumers cannot find on Amazon. The company was also able to substantially expand its revenue streams to include information technology, of which its Amazon Web Services cloud offering is perhaps the most ubiquitous. Moreover, it has more recently engaged in servicing customers via traditional, physical retail locations—indicating that it has mastered e-commerce and is venturing to do the same with conventional retail as well. Because Amazon’s business has expanded so rapidly, it is essential that it adhere to the Federal Trade Commission Act—which is a federal law regarding the rights of consumers, fair competition, and various forms of monetary “redress” (FTC, 2017). Thus, Amazon cannot illegally market products and services to children which their parents must pay for without the express consent of the latter. Amazon actually incurred a situation in which it violated this act because there were loopholes in applications for children which enabled them to purchase different things of use for those applications—which oftentimes took the form of games. The children believed they were simply doing something that was part of the game they were playing, although in reality it required extra payment (FTC, 2014). Similarly, Amazon must adhere to the Children’s Online Privacy Protection Act, which serves to protect the privacy of children under the age of 13. Specifically, this act forbids the collection of private data about children under the age of 13 (Harris, 2016). Amazon’s offerings such as Alexa, which can record the voice data of users, must not flout this legal mandate. Apply three general legal topics that were discussed in the required readings. One of the general legal topics discussed in the required readings was the notion of intellectual property. This is an issue of particular importance to an organization such as Amazon, which can attain the intellectual properties of others in numerous ways. One of the most potentially litigious is through its Amazon Web Services, which provides cloud-based storage to other companies and organizations. Amazon must ensure that it does not infringe on the intellectual property of those organizations by taking ideas and tenets found in the data of such companies and attempting to capitalize on them as though they were Amazon’s. Additionally, Amazon may have an even greater propensity to infringe upon intellectual property laws through its deployment of Alexia, which incorporates various aspects of Artificial Intelligence, speech recognition, Natural Language Processing and deep learning to record the speech of consumers (Harris, 2016). It is critical the company does not take ideas of others and utilize them for its own. Another legal area of intense interest to those following Amazon pertains to the myriad anti-trust laws in existence. On the one hand, Amazon is somewhat innocuous in this respect since it has such a diversity of business interests that it may appear difficult to monopolize just one of them. On the other hand, however, the company’s interests are so broad that it is not inconceivable that it could to proverbially ‘corner’ the market in one of them. For instance, if Amazon Web Services becomes more popular than other offerings provided by Microsoft or Google, for example, Amazon’s cloud services could become the de facto ones for consumers and businesses alike. The key is to allow for competition, something which Microsoft itself was nearly guilty of not doing when it faced an anti-trust lawsuit near the turn of the millennium (Economides, 2001). A legal topic of interest that is important to those operating Amazon also relates to the Sarbanes-Oxley Act. Created in the wake of a number of unethical financial fiasco’s of immense magnitude in the early years of the 21st century (Green, 2004, p. 33), this act explicitly requires greater measures of financial transparency and accountability for publicly held companies—such as Amazon. Perhaps the main facet of this legal area which Amazon must maintain vigilant about is the notion of conflict of interests. Obvious examples of this phenomenon include things such as insider trading, especially when the traders work for a corporation and are valuing their own enrichment over their allegiance to the shareholders. However, other conflicts of interest can arise due to bundling when a company bundles products or services with others which cause conflicts to arise between the respective interests of those managing or financially accountable for the individual products or services bundled. Discuss how the philosophy of economist Milton Friedman may have influenced the executives of the company. There are a few highly influential ways in which the ideas propagated by Milton Friedman very well may have influenced the executives of Amazon. The primary tenet advanced by Friedman is arguably the notion of corporate social responsibility. In this respect, Friedman was a staunch believer in the overarching value that corporations could contribute to society as a whole. One of the foremost ways it was able to achieve this goal which he termed corporate social responsibility is by creating positive value for its shareholders (Baron, 2016, p. 683). Shareholders are emblematic of society since they consist of the general public. Thus, simply by implementing success business strategies which generate profits—and which produce the desired effect of boosting stock—companies are actuating some of the fundamental principles of corporate social responsibility for which Friedman is known. Amazon’s executives may have been actively considering this concept when they expanded their company’s line of business beyond mere bookselling, or when they took active measures to make their company a household name because of its viability to society. All of these actions created tangible business value for the company’s shareholders, which is aligned with Friedman’s corporate social responsibility idea. Still, Friedman’s championing of free markets as a means of effecting corporate social responsibility was not solely predicated on financial gain. Companies can also serve shareholders—and by extension, the greater society—by creating benefits in other ways. A simple examination of some of the environmental and ecological ramifications of Amazon readily buttresses this point. For instance, Amazon’s Kindle was one of the earliest purveyors of portable devices explicitly created to facilitate the reading of materials in electronic format. This point was not only aligned with some of its earliest business ventures, enabling it to bolster the market in electronic books. It also significantly aids the environment by preventing deforesting and reducing the amount of clutter caused by paper products. Similarly, its e-commerce format helped combat pollution caused by motor vehicles by enabling consumers to shop from home. Newfound forays in the deployment of drones for delivery purposes also help to create similar advantages for society by aiding the environment, reducing pollution, and helping to maximize existing resources. Identify an ethical framework other than the shareholder theory that applies to this situation and discuss how it may have influenced the executives of the company. One can easily see how an ethical framework such as utilitarianism could have also influenced the executives of Amazon. Quite simply, several facets of corporate social responsibility reflect some of the core principles of this branch of ethics. The fundamental concept upon which utilitarianism is based is the decision that creates the greatest utility for the greatest amount of people is the one which is most ethically defensible. Actions are not judged by their consequences, but by whether or not they represent the choice that creates the greatest value or utility for people. It would be easy to utilize this framework and stipulate that Amazon’s executives made choices based on what was most lucrative and which happened to coincide with notions of corporate social responsibility. Doing so, however, would not fully encompass the full spectrum of utility caused by some of Amazon’s strategic decisions. Amazon’s innovations in delivery, for existence, create an immense amount of utility for the public good. Amazon Prime delivery, for example, is a service which can get deliveries to people in a matter of hours, as opposed to days. Granted, Amazon can charge costly amounts for such a delivery service, which is also part of the utility impacting its revenues. However, the greater good is for the consumer which can remain in the comfort of his or her own home and get products needed in expedient time frames. For example, there are some people who are ill and many not be able to readily travel. These people might not be able to afford to wait even a day or two for products which might influence their health. In this respect, Amazon is creating an extremely ethical service which comes to typify aspects of the utilitarianism framework. By considering its impact on consumers, most of its services are categorized as adhering to utilitarianism. References Baron, D. (2007). Corporate social responsibility and social entrepreneurship. Journal of Economics & Management Strategy. 16(3), 683-717. Economides, N. (2001). The Microsoft antitrust case. http://www.stern.nyu.edu/ Retrieved from http://www.stern.nyu.edu/networks/Microsoft_Antitrust.final.pdf Federal Trade Commission. (2017). Federal Trade Commission Act. www.ftc.gov Retrieved from https://www.ftc.gov/enforcement/statutes/federal-trade-commission-act Federal Trade Commission. (2014). FTC Alleges Amazon Unlawfully Billed Parents for Millions of Dollars in Children’s Unauthorized In-App Charges. www.ftc.gov Retrieved from https://www.ftc.gov/news-events/press-releases/2014/07/ftc-alleges-amazon-unlawfully-billed-parents-millions-dollars Green, Scott. (2004). A look at the causes, impact and future of the Sarbanes-Oxley Act. Journal of International Business and Law. 3(1), 33-50. Harris, M. (2016). Virtual assistants such as Amazon\\\'s Echo break US child privacy law, experts say. www.theguardian.com Retrieved from https://www.theguardian.com/technology/2016/may/26/amazon-echo-virtual-assistant-child-privacy-law