Who's Afraid of Amazon.com?

Who's Afraid of Amazon.com?

Who's Afraid of Amazon.com?

Arts, entertainment, and more.
Sept. 1 1999 12:33 PM

Who's Afraid of Amazon.com?

You'd think that gossips everywhere--which is to say, everyone everywhere--would be grateful. Amazon.com's latest innovation, its "purchase circles," lets customers in one Zip code or at one company see what books are selling well among customers in other Zip codes or at other companies. (Videos and CDs, too, but somehow Culturebox isn't as interested in them.) So, for instance, Culturebox, who lives in suburban Pelham, N.Y., and works at Microsoft--where Alice McDermott's novel Charming Billy and Bill Gates' Business @ the Speed of Thought are the two top books, respectively--gets not only to spy on her neighbors and co-workers but also to find out what her fellow citizens in Anniston, Ala., and counterparts at a competing high-tech company, IBM, are reading: Jerry Jenkins and Tim LaHaye's wacked-out Christian sci-fi thriller Apollyon: The Destroyer Is Unleashed, and a boring-sounding book called The Profit Zone: How Strategic Business Design Will Lead You to Tomorrow's Profits, respectively. This strangely satisfying form of literary eavesdropping, achieved by a simple re-sorting of customers' e-mail domain names, shipping addresses, and purchases, is not limited to the continental United States. What's hot in Israel? A 1,200-page scholarly tome called Israel and the Bomb. In Puerto Rico? Esmeralda Santiago's memoir Almost a Woman. In Kenya? Management guru Peter Drucker's Management Challenges for the 21st Century.

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Purchase circles are a simple but brilliant conceptual coup. Whoever thought them up understood a fundamental principle of salesmanship, or rather, herd psychology: People want to know what everyone else in their peer group is doing, so they can do it too. Statistically speaking, the data are meaningless, since the company doesn't reveal the sample size behind each list. There could be anywhere from 3,000 to three people in Pelham making Charming Billy its best seller. But no one's claiming that these lists represent some larger truth about the book market (such truths are elusive, anyway, since publishers are notoriously secretive about sales figures). They're a hint of the regional and cultural differences among us, no more, as well as the mildly galling similarities (John Grisham, Tom Brokaw, and Thomas Harris top the book lists in at least one city in almost every state in the Union). Plus they're fun. Who could fail to be titillated by the fact that the No. 2 best-selling book in Brooklyn is Kosher Sex: A Guide to Passion and Intimacy?

Well, the American Booksellers Association and Internet privacy groups, for starters. They consider Amazon's purchase circles an invasion of privacy, yours and your employer's. Certain exaggerations aside--that people could deduce a company's secret strategies or level of workplace satisfaction from their employees' reading lists, for instance--their argument amounts to the old slippery slope: If Amazon will do this, what else will it do? The answer, of course, is as much as it can get away with. If you don't already know that Amazon is keeping a file on you, you ought to be forbidden to shop on the Internet. The company's business strategy has been widely publicized: Amazon believes that if it ever turns a profit, it will do so by exploiting information gained from its customers to sell them other products. Since the integrity of its customer database is of tremendous importance to Amazon, we can probably take its executives at their word when they say (in a policy page that appears to have gone up yesterday) that they won't give out any information that could identify you personally. For instance, no purchase circle is being created for groups of less than 200 people. Amazon has no reason to want to piss you off.

That's why much of the alarm about Internet privacy strikes Culturebox as Chicken Little-ish. Consumer rage is disastrous for any business whose profits, present or future, depend on its ability to compile and deploy information on its customer. There are just too many ways for shoppers to undermine the data-collection process. At Amazon, for instance, they can "opt out" of both purchase circles and general customer profiling by sending in blank e-mails. Companies can keep themselves out of purchase circles by faxing in a request. If consumers get mad enough, they can bail out of Amazon altogether and buy their books at Barnes & Noble Online, which as yet does not have purchase circles. If enough Amazon customers "opt out," it might be reduced to offering them discounts or other goodies to "opt in"--which would be fabulous for shoppers but of dubious economic value to Amazon, as Culturebox's former colleague Bruce Gottlieb has shown.

Obviously, sometimes the privacy advocates are right. This week they're also upset about U S West, the Denver-based phone company that recently won on appeal its lawsuit against the Federal Communications Commission, and they have good reason to be. The FCC had tried to prevent the U S West (and other companies who became party to the suit) from exploiting a customer's personal information--calls made, services ordered, etc.--to sell that customer more services and products. (The ruling did not give the companies the right to sell this data to third parties.) The judge ruled that keeping a company from using its customer databases to inform its sales pitches infringed on its free commercial speech. That seems true in general--why shouldn't companies use what you freely give them?--but wrong in this case. U S West has a virtual monopoly on local phone service in its region, so the usual free-market remedies don't apply.

Culturebox would urge consumers to have faith in the power of corporate self-interest to protect them, at least in non-monopolistic situations, except that she's not convinced that that's what's really causing the general public to wax wroth. She suspects it's more what Amazon's invention reveals about shopping nowadays: that it takes place inside an endless hall of mirrors. After all, what's better than shopping? Watching ourselves shop. Watching ourselves being watched as we shop. Watching the watchers who watch us as we shop. Ad infinitum and nauseum .