Amazon.de Practices Criticized: Tax Avoidance and Worker Conditions Under Scrutiny
In recent days, several critics have spoken out about the business activities of Amazon.de, evaluating, exposing, and ultimately condemning them.
In the FAZ on February 13, Professor of German Studies Roland Reuß from the University of Heidelberg labeled Amazon as a Luxembourg-based tax avoidance corporation, a quasi-monopolist, or a propagator of the Kindle devices. That evening, a documentary aired on ARD and Hessischer Rundfunk (see video at the end of the article), which closely examined Amazon’s practices in the holiday season’s temporary worker operations. Here too, the overall tone was largely negative. The very next day, Buchreport published an interview with Reuß, which added fuel to the fire by comparing Amazon’s expansion policy to a “bulldozer approach.”
ARD Program Shocks, Public Relations Nightmare
The real public relations nightmare would certainly be the ARD report. Right from the start, the intro quickly makes it clear where the report is headed. With ominous music, shattering glass, and shadow or smoke images, the path for further content is set (see article image above). The report highlights the poor working and living conditions of the temporary workers, who reportedly are mostly from Spain, Poland, and other unemployment-stricken EU countries, as well as the security staff allegedly linked to far-right groups. The report certainly doesn’t fail to make an impact: It shocks.
In light of this massively negative coverage, Amazon felt compelled to issue a statement, saying in part: “Safety is a top priority in our logistics centers. We take the safety and wellbeing of our employees very seriously and regularly check external service providers responsible for housing seasonal workers from other regions. It’s also important to us to receive feedback from our employees: Whenever employees suggest improvements regarding working conditions or accommodation, we immediately review them.”
Amazon tolerates no discrimination or intimidation. Even though the security company was not hired by Amazon, we are currently investigating the allegations made by the editors regarding the behavior of the security personnel and will promptly take appropriate measures.”
However, the statement sidesteps the issue of foreign temporary workers and only addresses the allegations concerning the security firm.
Questionable Timing of the Release
But as bad as all this sounds—and it certainly does—I think it’s equally important to remain critical. Is it a coincidence that this negative coverage is emerging right now? A few weeks ago, it was revealed that Amazon made record sales in 2012, making Germany the most important foreign market for the U.S. company.
The German online trade grew significantly by 27 percent in 2012. Goods worth 27 billion euros were sold online. Amazon.de generated 6.5 billion euros in sales in 2012. Even though purely digital offers are included here, regular goods make up the lion’s share, allowing Amazon to likely control between 20 and 25 percent of the German online retail market. The real danger, however, lies in Amazon causing the revenues of brick-and-mortar retailers to shrink. Thus, it’s no surprise that various institutions, clubs, publishers, etc. are banding together against Amazon, and opposition is growing. I’m not suggesting that’s what’s happening here, but it indeed seems odd that the news coverage about Amazon turned so negative shortly after the (initial) announcement of (very good) official company numbers for Germany. But whether this was really the trigger doesn’t make much of a difference; as far as German competitors have been concerned for years: The situation is dire.
Stay Critical! (?)
But even when you look at the rest of the ARD report, one or two questions remain open. The report only addresses the seasonal situation of temporary workers during the Christmas season. Aside from the poor living and working conditions mentioned in the report, it shouldn’t come as a surprise that Amazon doesn’t keep most of these employees after the holiday season. The drop in sales directly after Christmas is too drastic for that to be economically sensible. Overall, Amazon employs 7,700 permanent staff in their German logistics centers according to their own statement. Additionally, there are about 5,000 temporary workers during the 3-month Christmas season according to a ver.di estimate.
While Amazon is publicly shamed in the report, it’s surprising that other retailers and chains are not mentioned at all and thus completely absolved of responsibility. Amazon is certainly not the only company operating logistics centers in Germany, and likely not the only company that needs to temporarily increase staff numbers during the Christmas season. Amazon probably didn’t invent these practices themselves. It’s by no means fair that Amazon should stand alone in the spotlight if such practices are being criticized.
Lastly, the report also mentions that Amazon declines to comment on the situation of possibly saved social contributions through tax tricks. In the displayed email (minute 25:24), it is noted that they aren’t giving interviews but are willing to answer questions. Amazon’s spokesperson says verbatim: “[…] I unfortunately couldn’t reach you by phone. I can’t offer an interview, but if you want to send us any questions, we would be happy to answer them in writing/by phone.” Of course, it’s unclear how the past and future communications with Amazon have gone, but judging by the subject, there has been at least a lively email exchange. Amazon doesn’t seem to be as uncooperative as depicted in the report.
Boycott Amazon.de?
The swift (negative) reaction on the internet and social media networks comes as no surprise. In addition to numerous criticisms, calls for a boycott against Amazon also emerge. The demand isn’t new. Many times, and from various sides, there have been calls to shop in the local, brick-and-mortar stores. Mainly because it supports the local economy, but also because it preserves the community space shaped by local retailers—such is the guideline of Buy Local.
Recently, a campaign called “Boycott Amazon” ran in the UK, aiming to weaken the online giant and simultaneously support the high street. However, the campaign didn’t focus on Amazon’s working conditions but rather on its tax policies. With clever accounting, Amazon manages to pay minimal taxes, even while making billions in sales.
Not to be Forgotten…
In any case, regarding the employment practices mentioned in the ARD report, several things shouldn’t be forgotten: According to the ARD report, the hiring of temporary workers is done by the personnel service provider Trenkwalder, which collaborates not only with Amazon but with numerous other (including German) companies. For example, Continental, Bosch, Magna, EON Group, Samsung, Siemens, Lego, General Electric, and many others. Those who choose to boycott Amazon due to the cited practices should also be consistent and avoid other Trenkwalder clients.
Additionally, one should also refrain from purchasing electronic devices manufactured in Asia, as they are typically assembled by companies like Foxconn, which are well-known for their more than inadequate working, wage, and living conditions. The same goes for many textile or toy companies… essentially for almost all firms that produce their goods in China & Co. It’s not because the workforce there is better, but because it’s cheaper. Unfortunately, this has not only to do with lower living costs in these countries but also with significantly poorer working conditions.
The list of companies one would have to consistently avoid if boycotting Amazon.de could probably go on endlessly. Does this make the Christmas temporary worker situation at Amazon any better? No, of course not. But things can get much worse, and we tend to overlook the grievances in other countries. From the entire coverage and reactions in various social media channels, I get the impression that any previously existing dislike has now (finally) found fertile ground.
Personally, I will continue to shop at Amazon, because otherwise, I’d have to be consistent and avoid almost all globalized companies. To be honest, that seems hardly feasible to me—not without significant restrictions in my buying behavior and a noticeable increase in costs. Do I want that, or can I afford that? No. I just hope that following the public pressure that has grown with this coverage, Amazon will address these issues, and things will look better by the next holiday season.
What do you think? Leave a comment and let us know your opinion on the whole issue!
