News of the Cyber World

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Amazon Sellers’ Woes Highlight Allegations in FTC Antitrust Lawsuit

The FTC, backed by 17 state attorneys general, has thrown a legal challenge at Amazon, alleging that the company has illegally used its monopoly power to suppress rivals, which ultimately disadvantages consumers. The lawsuit claims that Amazon penalizes third-party sellers who offer lower prices on other platforms, coerces them into using its shipping service, and arbitrarily raises fees. William Kovacic, a law professor and a former chair of the FTC, draws a parallel between this case and those against railroad monopolies a century ago, stating, “There were long-standing concerns about how a company that owns a crucial asset can impose terms, conditions, or restraints on third parties who also use that asset.”

Breitbart News recently reported on just one way that Amazon abused pricing on its platform using a secret algorithm called “Project Nessie:”

The algorithm, as per sources familiar with the FTC’s complaint, was instrumental in bolstering Amazon’s profits across a wide variety of shopping categories. Not only did it serve to enhance Amazon’s financial gains, but it also inadvertently nudged competitors into elevating their prices, thereby imposing a financial burden on consumers. In scenarios where competitors abstained from matching Amazon’s prices, the algorithm astutely reverted the item to its original price.

NPR reports that individual Amazon sellers, many of whom created companies around their early Amazon success, have experienced the negative impacts of Amazon’s power. Douglas Mrdeza, an entrepreneur from Michigan, embarked on a journey with Amazon in 2014, initially listing a specialty hair pomade, Suavecito, to offset an overstock issue in his barbershop. The product sold out swiftly, and Mrdeza expanded his venture, eventually establishing company named Top Shelf Brands. Within a few years, his business, boasting over 40 employees, four warehouses, and $25 million in revenue primarily from Amazon sales. “It was thriving, for sure,” Mrdeza reflects. “We were all in.” However, the prosperity was short-lived. By 2022, Top Shelf Brands ceased operations and declared bankruptcy, exemplifying the volatile nature of success on Amazon’s platform.

Top Shelf Brands reportedly failed because Amazon began selling the brands itself, displaying its listings above its smaller competitor, and pricing them into the dust. A similar situation occurred to Nicholas Parks, president of SnobFoods.com. He found success selling Valentina hot sauce on Amazon, until Jeff Bezos’ company decided to compete.

IRS Says Microsoft Owes $28.9 Billion in Back Taxes After Audit Dispute

TechCrunch reports that Microsoft, the technology giant with a market capitalization soaring to $2.5 trillion, faces a massive tax bill after an audit spanning almost two decades. The IRS audit, spanning from 2004 to 2013, has determined that Microsoft owes $28.9 billion in back taxes, a figure that is inclusive of penalties and interest. This is part of a trend where the IRS has progressively become more stringent with large corporations, especially those redirecting profits to overseas tax havens.

Microsoft’s tax strategy involved moving “at least” $39 billion in profits to Puerto Rico. This was orchestrated through a scheme that saw its intellectual property (IP) being transferred to a small factory it owned on the Caribbean island. The IRS’s pursuit of Microsoft over this practice has spanned years of legal and political wrangling.

Microsoft encountered a legal setback in January, where it lost a lawsuit that sought to compel the IRS to unveil thousands of audit-related records. The company, however, remains steadfast in its stance, asserting that the IRS’s proposed figure should be reduced by as much as $10 billion.

Microsoft claims that the IRS did not account for taxes it paid under the Trump-era Tax Cuts and Jobs Act (TCJA), a legislation crafted to diminish taxes and incentivize corporations to repatriate their foreign profits at a one-time tax rate.
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The IRS, having sent Notices of Proposed Adjustment to Microsoft at the end of September, has officially concluded the audit for the 2004-2013 period. However, this is likely to ignite another extended period of legal jousting as Microsoft and the federal agency spar over the actual amount to be paid.

Lawsuit: Apple AirTags Have Caused a Nationwide Surge in Stalking Incidents

Ars Technica reports that Apple has found itself embroiled in a legal battle as more than three dozen victims unite in a class action lawsuit, alleging that the company’s AirTags have morphed into a “weapon of choice” for stalkers. The lawsuit, which has garnered the participation of victims allegedly terrorized by the misuse of this technology, has gathered a growing number of plaintiffs joining the cause.

AirTags, initially designed to assist users in locating lost or stolen items, have reportedly been exploited to enable real-time tracking of individuals, thereby facilitating stalking. The plaintiffs have expressed that the technology can be “easily, cheaply, and covertly used to determine real-time location information to track victims,” thus becoming “one of the most dangerous and frightening technologies employed by stalkers.”

The lawsuit reveals a chilling uptick in stalking incidents involving AirTags, with more than 150 police reports in the U.S. as of April 2022 and a notable spike in international cases. One particularly distressing instance involves a plaintiff from Indiana, LaPrecia Sanders, who tragically lost her son after his girlfriend allegedly utilized an AirTag to trace his movements, subsequently following him to a bar and fatally running him over with her car.

The plaintiffs, residing in various locations including the U.S., Canada, and Ireland, have shared harrowing accounts of being stalked by individuals, some of whom were abusive partners or exes, utilizing AirTags in insidious ways such as concealing them in purses, car wheel wells, and even inside a child’s teddy bear. Others have reported being stalked by an unidentified individual with unclear motives.
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The lawsuit emphasizes that what sets AirTags apart from similar products is their “unparalleled accuracy, ease of use,” and affordability, with a price point of merely $29, making them accessible to a wide array of users.

The victims have accused Apple of being cognizant of the potential misuse of AirTags for stalking purposes, yet choosing to market them as “stalker-proof.” Furthermore, they allege that when the purported “stalker-proof” protections were unveiled as “totally inadequate,” Apple scrambled over the past two and a half years to “address its failures in protecting people from unwanted, dangerous tracking.”