Amazon Strong-arms Small Businesses to Share User Data

Amazon reportedly pressured smart-thermostat maker Ecobee to fork over data from its voice-enabled devices even when customers weren’t actively using them. When Ecobee pushed back, the e-commerce giant threatened to box the company out of high-profile selling events like Prime Day or refuse Alexa certification for future devices, according to a Wall Street Journal report this week.

Last year, Amazon approached Ecobee among other Alexa-enabled device sellers about sharing “proactive state” data from customers, several company executives confirmed to the Journal. With this data, Amazon would receive updates about the device’s status at all times even when customers weren’t using them, such as the temperature of their home or whether their doors are locked, among other examples.

Ecobee was hesitant at first. Since its smart thermostats include support for Amazon’s voice assistant Alexa, it already shares some user data with the company, but Ecobee worried that this new demand could be a step too far and violate its customers’ privacy, a person familiar with the matter said in an interview with Journal. Amazon also has a well-documented history of cloning successful products to sell under its in-house brand, so Ecobee rightfully worried that sharing this data would basically be like handing over a blueprint for Amazon to develop its own competing product.

However, when Ecobee initially refused to provide users’ proactive state data, Amazon warned that a refusal might bar the company from major selling events like Prime Day or prevent its future devices from receiving Alexa certification, said one of the people the Journal spoke with. Given that Amazon controls a huge chunk of the global e-commerce market (nearly 40% in the U.S. alone), that kind of move can bankrupt smaller companies like Ecobee.

Amazon spokesperson Jack Evans told the outlet that Amazon uses proactive state data to make better recommendations to customers, and customers agree to share this data when linking their accounts. Amazon did not immediately respond to Gizmodo’s request for comment, but we’ll be sure to update this blog when they do.

Ecobee spokesperson Andie Weissman said in a statement to the Journal that negotiations remain ongoing and that “Amazon continues to be a valued Ecobee partner.”

If true, this would be just the latest example of how Amazon continues to go full mafia-style in leveraging its industry dominance to strongarm its industry partners into cooperating. We’ve seen it before with HBO Max, which Amazon reportedly brought to its Fire TVs only after the company agreed to host its streaming service on Amazon’s Prime Video Channels for a year and extend a lucrative contract with Amazon Web Services, its cloud-computing arm. In addition to stealing designs from other companies for its AmazonBasics line, Amazon also purportedly pressures industry partners to use its logistics arm, Fulfillment by Amazon, by threatening to make it more difficult to sell products on its marketplace, according to the Journal. Amazon even reportedly competes with the companies it invests in, of which Ecobee is one, using its position as a shareholder to access confidential information and develop similar products.

Last October, a House Judiciary antitrust subcommittee concluded what we all already knew: That Amazon and other tech giants have “monopoly power” in their respective markets and “abuse their power by charging exorbitant fees, imposing oppressive contract terms, and extracting valuable data from the people who rely on them.”