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Writer Anand Giridharadas on tech’s billionaires: “Are they even on the same team as us?”

Since the start of the coronavirus pandemic, America’s roughly 640 billionaires have seen their fortunes soar by $845 billion in combined assets or 29% collectively, widening the already yawning gap between the very richest and the rest of the U.S.

Many of those billions were made by tech founders, including Mark Zuckerberg, Jeff Bezos, and Elon Musk, whose companies have soared in value and, in tandem, their net worth. In fact, so much has been made so fast and by so few relatively, that it’s easy to wonder if greater equality is now forever out of reach.

To talk about the question, we reached out earlier this week to Anand Giridharadas, a former New York Times correspondent whose 2018 book, “Winners Take All: The Elite Charade of Changing the World,” became a best-seller.

Giridharadas’s message at the time was largely that the generosity of the global elite is somewhat laughable — that many of the same players who say they want to help society are creating its most intractable problems. Think, for example of Bezos, whose company paid zero in federal tax in 2017 and 2018 and who is now on the cusp of opening a tuition-free preschool for underserved children called the Bezos Academy.

Given the aggressive escalation over the last six months of the same trends Giridharadas has tracked for years, we wondered how he views the current situation. Our chat has been edited for length and clarity.

TC: You have a weekly newsletter where you make the point that Jeff Bezos could give every one of Amazon’s 876,000 employees a ‘pandemic’ bonus of $105,000 and he would still have as much money as he did in March.

AG: There’s this way in which these crises are not merely things that rich and powerful survive. They’re things that they leverage and exploit, and it starts to raise the question of: are they even on the same team as us? Because when you have discussions about stimulus relief around what kind of policy responses you could have to something like the 2008 financial crisis or the pandemic, there’s initially some discussion and clamor for universal basic income, or substantial monthly checks for people, or even the French approach of nationalizing people salaries… and those things usually die. And they die thanks to corporate lobbyists and advocates of the rich and powerful, and are replaced by forms of relief that are upwardly redistributive that essentially exploit a crisis to transfer wealth and power to the top.

TC: Earlier in the 20th century, there was this perception that industry would contribute to solving a crisis with government. In this economy, we didn’t see a lot of the major tech companies, or a lot of the companies that were benefiting from this crisis, really sacrificing something to help the U.S. Do you see things that way?

AG: I think that’s right. I’m always wary of idealizing certain periods in the past, and I think there were a lot of problems in that time. But I think there’s no question that it was not as difficult back then, as it is today, to summon some kind of sense of common purpose and even the need to sacrifice values like profit seeking for other values.

I mean, after 9/11, President George W. Bush told us all to go shopping as the way to advance the common good. Donald Trump is now 18 levels of hell further down that path, not even telling us that we need to do anything for each other and [instead describing earlier this week] a pandemic that has killed 200,000 people as being something that doesn’t really affect most people.

So there’s just been a coarsening. And that kind of selfish trajectory of our culture, after 40 years of being told that what we do alone is better than what we do together, that what we do to create wealth is more important than what we do to advance shared goals — that quite dismal, dull message has had its consequences. And when you get a pandemic like this, and you suddenly need to be able to summon people to all socially distance at a minimum or, more ambitiously, pull for the common good or pay higher taxes or things that might even cost them a little bit, it’s very hard to do because the groundwork isn’t there.

TC: You’ve talked quite a bit over the years about “fake change.”

AG: Silicon Valley is the new Rome of our time, meaning a place in the world that ends up deciding how a lot of the rest of the world lives. No matter where you lived on the planet Earth, when the Roman Empire started to rise, it had plans for you one way or another, through your legal system, or your language, or culture, or something else. The Roman Empire was coming for you.

Silicon Valley is that for our time. It’s the new Rome [in] that you can’t live on planet Earth and be unaffected, directly or indirectly, by the decisions made in this relatively small patch of [of the world]. So the question then becomes, what does that new Rome want? And my impression of having reported on that world is that it’s an incredibly homogeneous world of people at the top of this new Rome. It’s white male dominated in a way that even other white male dominated sectors of the American economy are not . . . and it’s a lot of a certain kind of man who often is actually more obtuse about understanding human society and sociological dynamics and human beings than the average person.

Maybe they didn’t spend a lot of time negotiating human dynamics at sleepovers, which is fine. But when you end up with a new Rome and it’s hyper dominated by people of one race and one gender, many of whom are disproportionately socially unintelligent, running the platforms through which most human sociality now occurs — democratic discourse, family community, so on and so forth — we all start to live in a world created by people who are just quite limited. They are smart at the thing they’re smart at and they’ve become in charge of a lot of how the world works. And there’s simply not up to the task. And we see evidence of that every day.

TC: Are you speaking about empathy?

AG: Empathy is absolutely one of [the factors]. The ability to understand the more amorphous, non technological, non quantifiable things . . . it’s so interesting, because it’s people who are clearly very smart in a certain area but  just honestly do not understand democratic theory. There’s just so much work that’s been done — deep, complicated thinking going back to Plato and Aristotle, but also modern sociological work, including why a safety net and welfare is complicated. And there’s a certain kind of personality type that I have found very dominant in Silicon Valley, where it’s these men who just don’t really have a lens for that.

They’re often geniuses. It’s a certain kind of particular personality type where you care a lot about one thing and you go deep on that one thing, and it’s probably the same personality type that Beethoven had. It’s a great thing, actually. It’s just not great for governing us, and what these people are doing is privately governing us, and they have no humility about the limitations of their worldview

TC: We’re talking largely about social media here. Is it reasonable to expect some kind of government action. Do you think that’s naive? 

AG: It’s absolutely essential that the tech industry be brought into the same kind of sensible regulatory regime. I mean, you have kids, I have kids. If you’ve ever read the side of their car seats or any of the other products in their lives, you understand how much regulation there is for our benefit. . . I often say that the government at its best is like a lawyer for all of us. The government is like ‘Why don’t we check out these car seats for you and create some rules around them and then you can just buy a car seat and not have to wonder whether it’s the kind that protects your child or crumbles?’ That’s what the government does for all kinds of things.

TC: You’ve talked about billionaires who don’t want to pay taxes yet don’t hesitate to make a donation because they have control over where their money is spent and they get their name on a building, and it’s true. Many companies whose founders also consider themselves philanthropists, like Salesforce and Netflix, paid no federal tax in 2018, which amounts to billions of dollars lost. If you had to prioritize between taking antitrust action or closing the tax loopholes, what would you choose?

AG: They’re both important. But I think I would prioritize taxation.

One way to think about it is this pre distribution and redistribution. The monopoly issue in a way is pre distribution, which is how much money you get to make in the first place. If you get to be a monopoly because we don’t enforce antitrust laws, you’re going to end up making pre tax a lot more money than you would otherwise have made if you had to compete in an actual free market.

Once you’ve made that money, the tax question comes up. So both are important, but I think you can’t overestimate the extent to which the tax thing is just totally foundational. If you look at the report that the 400 richest families in America pay a lower effective tax rate than the bottom half of families, it’s appalling.

We live in a complicated world. A lot of different things have been going on, including just in the last few months. But if you have to really summarize the drift and the shift of the last 40 years, it’s been a war on taxation. And it’s been a massive redistribution of wealth from the bottom to the top of American life through taxation. Since the ’80s, the top 1% has gained $21 trillion of wealth, and the bottom half of Americans have lost $900 billion of wealth on average —  and much of that was prosecuted through the tax code.

Awkward! Above, Giridharadas shaking hands with Amazon founder Jeff Bezos at a Wired event in 2018.

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The $10B JEDI contract is locked, loaded and still completely stuck

The other day I took a moment to count the number of stories we’ve done on TechCrunch on the DoD’s $10 billion, decade-long, winner-take-all, JEDI cloud contract. This marks the 30th time we’ve written about this deal over the last two years, and it comes after a busy week last week in JEDI cloud contract news.

That we’re still writing about this is fairly odd if you consider the winner was announced last October when the DoD chose Microsoft, but there is no end in sight to the on-going drama that is this procurement process.

Government contracts don’t typically catch our attention at TechCrunch, but this one felt different early on. There was the size and scope of the deal of course. There was the cute play on the “Star Wars” theme. There was Oracle acting like a batter complaining to the umpire before the first pitch was thrown. There was the fact that everyone thought Amazon would win until it didn’t.

There was a lot going on. In fact, there’s still a lot going on with this story.

Oracle doth protest too much

Let’s start with Oracle, which dispatched CEO Safra Catz to the White House in April 2018 even before the RFP had been written. She was setting the stage to complain that the deal was going to be set up to favor Amazon, something that Oracle alleged until the day Microsoft was picked the winner.

Catz had been on the Trump transition team and so had the ear of the president. While the president certainly interjected himself in this process, it’s not known how much influence that particular meeting might have had. Suffice to say that it was only the first volley in Oracle’s long war against the JEDI contract procurement process.

It would include official complaints with the Government Accountability Office and a federal lawsuit worth not coincidentally $10 billion. It would claim the contract favored Amazon. It would argue that the one-vendor approach wasn’t proper. It would suggest that because the DoD had some former Amazon employees helping write the RFP, that it somehow favored Amazon. The GAO and two court cases found otherwise, ruling against Oracle every single time.

It’s worth noting that the Court of Appeals ruling last week indicated that Oracle didn’t even meet some of the basic contractual requirements, all the while complaining about the process itself from the start.

Amazon continues to press protests

Nobody was more surprised that Amazon lost the deal than Amazon itself. It still believes to this day that it is technically superior to Microsoft and that it can offer the DoD the best approach. The DoD doesn’t agree. On Friday, it reaffirmed its choice of Microsoft. But that is not the end of this, not by a long shot.

Amazon has maintained since the decision was made last October that the decision-making process had been tainted by presidential interference in the process. They believe that because of the president’s personal dislike of Amazon CEO Jeff Bezos, who also owns the Washington Post, he inserted himself in the process to prevent Bezos’ company from winning that deal.

In January, Amazon filed a motion to stop work on the project until this could all be sorted out. In February, a judge halted work on the project until Amazon’s complaints could be heard by the court. It is September and that order is still in place.

In a blog post on Friday, Amazon reiterated its case, which is based on presidential interference and what it believes is technical superiority. “In February, the Court of Federal Claims stopped performance on JEDI. The Court determined AWS’s protest had merit, and that Microsoft’s proposal likely failed to meet a key solicitation requirement and was likely deficient and ineligible for award. Our protest detailed how pervasive these errors were (impacting all six technical evaluation factors), and the Judge stopped the DoD from moving forward because the very first issue she reviewed demonstrated serious flaws,” Amazon wrote in the post.

Microsoft for the win?

Microsoft on the other hand went quietly about its business throughout this process. It announced Azure Stack, a kind of portable cloud that would work well as a field operations computer system. It beefed up its government security credentials.

Even though Microsoft didn’t agree with the one-vendor approach, indicating that the government would benefit more from the multivendor approach many of its customers were taking, it made clear if those were the rules, it was in it to win it — and win it did, much to the surprise of everyone, especially Amazon.

Yet here we are, almost a year later and in spite of the fact that the DoD found once again, after further review, that Microsoft is still the winner, the contract remains in limbo. Until that pending court case is resolved, we will continue to watch and wait and wonder if this will ever be truly over, and the JEDI cloud contract will actually be implemented.

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DoD reaffirms Microsoft has won JEDI cloud contract, but Amazon legal complaints still pending

We have seen a lot of action this week as the DoD tries to finally determine the final winner of the $10 billion, decade-long DoD JEDI cloud contract. Today, the DoD released a statement that after reviewing the proposals from finalists Microsoft and Amazon again, it reiterated that Microsoft was the winner of the contract.

“The Department has completed its comprehensive re-evaluation of the JEDI Cloud proposals and determined that Microsoft’s proposal continues to represent the best value to the Government. The JEDI Cloud contract is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract that will make a full range of cloud computing services available to the DoD,” the DoD said in a statement.

This comes on the heels of yesterday’s Court of Appeals decision denying Oracle’s argument that the procurement process was flawed and that there was a conflict of interest because a former Amazon employee helped write the requirements for the RFP.

While the DoD has determined that it believes that Microsoft should still get the contract, after selecting them last October, that doesn’t mean this is the end of the line for this long-running saga. In fact, a federal judge halted work on the project in February pending a hearing on an ongoing protest from Amazon, which believes it should have won based on merit, and the fact it believes the president interfered with the procurement process to prevent Jeff Bezos, who owns The Washington Post, from getting the lucrative contract.

The DoD confirmed that the project could not begin until the legal wrangling was settled. “While contract performance will not begin immediately due to the Preliminary Injunction Order issued by the Court of Federal Claims on February 13, 2020, DoD is eager to begin delivering this capability to our men and women in uniform,” the DoD reported in a statement.

A Microsoft spokesperson said the company was ready to get to work on the project as soon as it got the OK to proceed. “We appreciate that after careful review, the DoD confirmed that we offered the right technology and the best value. We’re ready to get to work and make sure that those who serve our country have access to this much needed technology,” a Microsoft spokesperson told TechCrunch .

Meanwhile, in a blog post published late this afternoon, Amazon made it clear that it was unhappy with today’s outcome and will continue to pursue legal remedy for what they believe to be presidential interference that has threatened the integrity of the procurement process. Here’s how they concluded the blog post:

We strongly disagree with the DoD’s flawed evaluation and believe it’s critical for our country that the government and its elected leaders administer procurements objectively and in a manner that is free from political influence. The question we continue to ask ourselves is whether the President of the United States should be allowed to use the budget of the Department of Defense to pursue his own personal and political ends? Throughout our protest, we’ve been clear that we won’t allow blatant political interference, or inferior technology, to become an acceptable standard. Although these are not easy decisions to make, and we do not take them lightly, we will not back down in the face of targeted political cronyism or illusory corrective actions, and we will continue pursuing a fair, objective, and impartial review.

While today’s statement from DoD appears to take us one step closer to the end of the road for this long-running drama, it won’t be over until the court rules on Amazon’s arguments. It’s clear from today’s blog post that Amazon has no intention of stepping down.

Note: We have  updated this story with content from an Amazon blog post responding to this news.

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Google switches its Shopping search service to mostly free listings

Google is making a change to its product search offering, meaning that unpaid listings picked by algorithm will dominate results displayed on the Google Shopping tab instead of mostly paid product listings.

In a blog post announcing the move, Bill Ready, president of Google’s commerce division, cited the coronavirus pandemic as a catalyst for Google to speed up a pre-existing plan to switch from Shopping results being determined by paid ad auction to mostly free listings.

Making Shopping listings free for merchants is one way the tech giant is looking to support struggling retailers through the COVID-19 crisis, he suggested.

“Beginning next week, search results on the Google Shopping tab will consist primarily of free product listings, helping merchants better connect with consumers, regardless of whether they advertise on Google,” wrote Ready. “With hundreds of millions of shopping searches on Google each day, we know that many retailers have the items people need in stock and ready to ship, but are less discoverable online.”

The expansion of free listings is slated to be completed by the end of April. Initially it will only take place in the U.S. — but Google says it intends to roll out the change globally before the end of the year.

While Google is packaging the change as a gesture to help cash-strapped retailers during a time of economic crisis, there’s no doubt the tech giant is also spying strategic opportunity to expand its role in e-commerce in the midst of a coronavirus-shaped boom.

With millions of people stuck at home, and scores of physical stores closed or with heavily restricted access, online shopping has seen huge uplift.

So far, Amazon’s Jeff Bezos has been the most notable winner, adding a reported $24 billion to his personal wealth since the shutdown began — while ad giants like Google are facing heavy exposure to the crisis, as advertisers hunker down and rip up their 2020 marketing budgets.

If Google Shopping can start returning better results for products, and indeed results for more products, there’s an opportunity for the search giant to grow its share of shopping traffic and grab listings clicks from shoppers who might otherwise have run product queries directly on Amazon.

Google is also using the new free product listings feature as a value add “carrot” — to encourage advertisers to (keep) paying it for ads.

“For retailers, this change means free exposure to millions of people who come to Google every day for their shopping needs. For shoppers, it means more products from more stores, discoverable through the Google Shopping tab. For advertisers, this means paid campaigns can now be augmented with free listings,” is how Ready pitches the switch.

As SearchEngineLand points out, this is actually Google returning to its roots — given the first version of its Shopping service (which was then called Froogle) was also free to list.

The switch to purely paid came in 2012. Though the changes now will still see paid product listings slotted into the top of Google search results if users search for product keywords, as well as into the top of the Shopping tab. So Google isn’t giving up all product ad revenue.

In terms of how it works, existing users of Google’s Merchant Center and Shopping Ads who have already opted into the “surfaces across Google program” won’t have to do anything else — and may already be eligible to show products in what Google’s help center describes as “the unpaid experiences.”

Those needing to opt in can do so by selecting “Growth” and then “Manage programs” in the left nav menu and then choosing the “surfaces across Google” program card.

“You can also add products to your product feed, to make even more products discoverable in these free listings,” Google adds.

For new users of its Merchant Center it says it’s aiming to ramp up the onboarding process “over the coming weeks and months.” But presumably there may be some delay in getting access.

Accompanying the switch is a “new partnership” with PayPal — which Google says will allow merchants to link their accounts in order to “speed up our onboarding process and ensure we’re surfacing the highest quality results for our users.”

Existing partnerships to help merchants manage products and inventory, including those with Shopify, WooCommerce and BigCommerce, are ongoing, it adds.

Google has been paying more attention to Shopping recently — with a major revamp of the service last year.

In 2019, it also merged its Google Express shopping service with Google Shopping, then sunset the Google Express brand. And it took on Pinterest’s visual search experience by integrating Google Lens into Google Shopping to guide customers to similar products as those in photos.

Like Amazon, Google leveraged personalization technology to create a homepage that’s unique to each shopper’s habits and purchases. And like Honey and other price-trackers, it can alert customers to potential savings. But to truly rival Amazon, Google Shopping has to be open to more retailers — and the pay-to-play route doesn’t allow for that, especially now as retailers face financial difficulties due to coronavirus lockdowns.

What’s not mentioned in Google’s blog post is that its Shopping service has faced antitrust intervention in the European Union, which slapped Google with a $2.7 billion fine back in 2017 — finding it had systematically given prominence to its own shopping comparison service in results while also demoting rival comparison shopping services.

The company later rolled out tweaks to the Shopping service in Europe that it said are intended to comply with the antitrust ruling, letting comparison services bid to be displayed in the ads displayed at the top of product related search results. Though rivals have continued to complain about the “remedy,” and the EU’s competition chief suggested last year that additional changes may be needed.

TechCrunch’s Sarah Perez contributed to this report

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Jeff Bezos Pledges $10 Billion to Combat Climate Change

Amazon CEO Jeff Bezos announced today he plans to contribute $10 billion toward fighting climate change through the creation of a new philanthropic project called the Bezos Earth Fund. “Climate change is the biggest threat to our planet,” Bezos wrote in an Instagram post. “I want to work alongside others both to amplify known ways and to explore new ways of fighting the devastating impact of climate change on this planet we all share.”

He says the Bezos Earth Fund will support scientists, activists and NGOs, with the first grants slated to go out sometime this summer. Besides that information, Bezos didn’t provide many details on the fund.

While Bezos is likely to get a lot of favorable coverage for the move, it’s worth pointing out that, as the CEO of Amazon, he’s not had the best track record when it comes to climate change. Bezos only announced Amazon’s recent climate pledge after the company was pressured by its employees to take action. Moreover, there are aspects of the plan that come off as self-serving. For instance, Amazon said it would purchase 100,000 electric vans from Rivian, a company in which the retailer lead a $700 million investment round. It’s also worth pointing out that Amazon’s Prime delivery service is likely a contributor to the overall problem.

Source: Entrepreneur

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Bezos phone hack: What we know, and don’t, about the alleged Saudi intrusion

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Source: Leadership – Fortune

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Amazon partners with thousands of mom-and-pop stores in India

Neighborhood stores dot tens of thousands of cities, towns and villages in India. They have survived — and thrived, despite — retail giants’ billions of investment in the country. Now, Amazon is beginning to embrace them.

Amazon said on Saturday it has partnered with thousands of neighborhood stores — locally known as kirana stores — across India to use them to store and deliver goods.

The company said it’s a win-win scenario for all stakeholders. “It’s good for customers, and it helps the shop owners earn additional income,” tweeted Amazon founder and chief executive Jeff Bezos .

Amazon, which piloted the program dubbed “I have Space” years ago, has partnered with more than 20,000 kirana stores, the company said.

“Today, we have thousands of retail outlets partnering with us under this program. The network of ‘I Have Space’ partners is spread across Tier 1, 2 and 3 cities – and beyond,” the company told TechCrunch.

Bezos’ announcement today, as he concludes his fourth India trip, underscores just how vital neighborhood stores remain for shoppers in the country despite the world’s largest e-commerce giant’s major push into the country and an emergence of heavily backed ecosystem of shopping startups.

These mom-and-pop stores offer all kinds of items, pay low wages and little to no rent. Since they are ubiquitous (there are more than 10 million neighborhood stores in India, according to industry estimates), no retail giant can offer a faster delivery. And on top of that, their economics is often better than most. E-commerce is still at an early stage in India, accounting for just 3% of total retail sales, according to industry estimates.

Walmart -owned Flipkart has also arrived at the same conclusion. Last month, it invested $30 million in four-year-old Bangalore-based startup ShadowFax, which works with neighborhood stores in 300 cities to use their real estate to store inventory, and utilize their large network of freelancers for the delivery.

Amazon also maintains a program called Amazon Easy in India, as part of which it trains shopkeepers to guide first time internet users shop online.

Any alliance with neighborhood stores would come in handy to Amazon India and Flipkart as a new contender readies its e-commerce play. India’s richest man Mukesh Ambani late last month started signing up customers for a soft launch of JioMart in suburban Mumbai.

JioMart is a joint venture between Ambani’s Reliance Jio, which reshaped the country’s telecom market with ultra-cheap mobile data, and his Reliance Retail, the nation’s largest retail chain with over 10,000 outlets in 6,500 Indian cities and towns.

The new venture is courting shopkeepers in many parts of India to use a handheld Jio terminal to help them better manage their inventory and order new stock from Reliance’s network of wholesalers. (Amazon, on its part, is slowly deepening its partnership with Future Retail, the second largest retailer in India.)

“Jio and Reliance Retail will launch a unique new commerce platform to empower and enrich our 12 lakh (1.2 million) small retailers and shopkeepers in Gujarat,” Ambani said last year.

Today’s announcement caps what could easily be one of the most remarkable weeks for Amazon in India, a market it entered six and a half years ago. Earlier this week, India’s anti-trust watchdog announced a probe into alleged predatory practices by Amazon India and Flipkart.

It was followed by Bezos’ arrival in India. At an event in New Delhi, he announced the company was investing a fresh $1 billion to its India operations and said it would work to help millions of small merchants come online for the first time. (This is on top of $5.5 billion the company has previously committed to its India business.)

Not far from the event venue, dozens of merchants assembled to protest the alleged anticompetitive practices of Amazon and Flipkart. On top of that, India’s trade minister Piyush Goyal chimed in on Amazon’s new investment to India, and said the investment was not a big favor to the nation. A day later, he backtracked on his comment.

On Friday, Amazon said it would create a million jobs in India by 2025, and ran a letter signed by Bezos on Amazon India website and app. Bezos had also sought to meet with Indian Prime Minister Narendra Modi — a request that was not fulfilled.

Source: TechCrunch