View profile

Amazon misreads the room

Revue
 
There was always something distasteful about Amazon's quest to find a home for its HQ2. Even when it
 
November 13 · Issue #246 · View online
The Interface
There was always something distasteful about Amazon’s quest to find a home for its HQ2. Even when it seemed like it might be a fair fight, it was depressing to watch so many cities and towns prostrating themselves before a tech giant in hopes they would score a windfall of jobs and infrastructure investments. Today, after a nationwide search, the entire stunt was revealed to be a kind of ruse — Amazon’s singular HQ2 turned out to be a pair of regional offices, and they would be located in two thriving metropolitan areas with strategic significance to Amazon and no dearth of high-paying jobs to start with.
I rarely write about Amazon here, but I’m making an exception today, if only because its big office move represents such a high-profile collision of big tech and our democracy. It also triggered a significant backlash that ricocheted around social media and has gotten the attention of elected officials — and I wonder if Amazon, as the least socially savvy of the big tech companies, is prepared for what’s next.
My colleague Colin Lecher has the details of the deal in The Verge:
Amazon has just announced the sites for its HQ2. Soon, the company will be expanding into Long Island City, Queens, and Arlington, Virginia. The expansion, the retail giant says, will bring 25,000 employees to each of the areas, and the company said it would invest $5 billion in the offices. Already, the announcement is raising questions about what the deal will mean for the cities, the scope of the agreement, and how Amazon conducted the search in the first place. With more than $2 billion in potential subsidies available across the three sites, the secretive and dramatic search seems to have paid off.
The incentives the company will receive as part of the deals are already eye-popping: Amazon announced that, in New York, it will receive up to $1.2 billion in a refundable tax credit, tied to the creation of jobs, and a $325 million cash development grant. The company will also earn up to $573 million in cash grants for the Arlington investment if it creates the promised jobs. Amazon said it will also build an operations hub in Nashville, and it plans to bring 5,000 corporate jobs to the city.
Those subsidies are kicking up a furor. Here’s Taylor Telford in the Washington Post:
Politicians voiced concerns that the influx of tech workers would fuel inequality and hurt lower-income populations. Others slammed the company for settling on obvious cities after a lengthy search that drew 238 bids, including many from smaller cities in need of the “transformation” Amazon promised.
While New York Gov. Andrew Cuomo implored Amazon to come to New York City, reportedly saying he’d “change his name to Amazon Cuomo if that’s what it takes”, local politicians were wary about the deal. Prior to the announcement, New York City council member Jimmy Van Bramer and state senator Michael Gianaris published a joint statement in the Yonkers Tribune criticizing the use of “scarce public resources” as “massive corporate welfare. Now, Van Bramer and Gianaris are teaming up with local activist groups to protest Amazon’s plans on Wednesday.
An ad for their protest reads in part: “Say no to the richest company in the world robbing over $1 billion from state funding for our schools, transit and housing.”
Meanwhile, Democrats in New York’s State Assembly are planning a rather delicious stunt of their own. Here’s David Sirota in Capital & Main:
Democratic Assemblyman Ron Kim announced that he will introduce legislation to slash New York’s economic development subsidies and use the money to buy up and cancel student debt — a move he said would provide a bigger boost to the state’s economy. The legislation, says Kim, would halt any Cuomo administration offer of taxpayer money to Amazon, which could reap up to $1 billion in tax incentives if it moves to Long Island City. 
Which move do you think will play out better on social media — giving Amazon $1 billion in incentives, or offering New York college students $1 billion in debt relief? (Davey Alba collects many more outraged tweets from politicians and others here in BuzzFeed.)
Of course, Amazon might object that it was simply following a well established corporate playbook. Derek Thompson laid out just how common in a startling piece in The Atlantic:
Every year, American cities and states spend up to $90 billion in tax breaks and cash grants to urge companies to move among states. That’s more than the federal government spends on housing, education, or infrastructure. And since cities and states can’t print money or run steep deficits, these deals take scarce resources from everything local governments would otherwise pay for, such as schools, roads, police, and prisons.
In the past 10 years, Boeing, Nike, Intel, Royal Dutch Shell, Tesla, Nissan, Ford, and General Motors have each received subsidy packages worth more than $1 billion to either move their corporate headquarters within the U.S. or, quite often, to keep their headquarters right where they are. New Jersey and Maryland reportedly offered $7 billion for HQ2, which would be the biggest corporate giveaway in American history.
There’s plenty in here to be upset about. But I’ll highlight just one thing that I think most people can agree on: the way these companies demand such strict secrecy from the public that is handing them the welfare checks. Virginia, for example, has agreed to provide Amazon with written notice of any public-record requests under the Freedom of Information Act “to allow the Company to seek a protective order or other appropriate remedy.”
This, too, is depressingly common. San Jose’s mayor and 17 other elected officials signed strict nondisclosure agreements with Google as part of an effort to bring the city a $67 million land deal. In Bloomberg today, Josh Eidelson reports that activists are now suing to make terms of the deal public:
City officials signed agreements “designed to transform public records, on such crucial issues as transit and environmental compliance, into private ones that the public does not see,” according to the filing. The “city and Google went to extraordinary lengths to keep the public in the dark.”
The agreements are invalid under San Jose’s municipal code, which restricts officials from entering into contracts without council approval, and violate state law barring agencies from letting outside parties control disclosures to the public, the plaintiffs said.
Perhaps the furor over Amazon’s regional offices will blow over. But it’s hard not to feel today as if the company misread the room — overestimating the public’s appetite for a billion-dollar giveaway to one of the world’s biggest companies, and underestimating the public’s ability to raise hell on- and offline. Amazon may yet feel that pain, in the long run. And in the short run, as Shira Ovide notes, it’s the dealmaking politicians who should worry:
Amazon doesn’t have to look far to find a worst-case scenario for backlash to a publicly funded corporate expansion. In Wisconsin, opponents of Governor Scott Walker made an issue of billions of dollars in tax breaks and other incentives for a factory built by Foxconn, the Taiwanese electronics manufacturer. Foxconn has changed the project, which may require far fewer workers than initially envisioned. Citizens upset about Foxconn mostly blamed their elected officials rather than a company far away. (Walker lost his re-election bid.) If perception sours on Amazon in Washington and New York, however, there will be enough blame for local officials and Amazon.

More on that study
Yesterday I wrote about a new study from the University of Pennsylvania, which found that reducing social media usage led to lower levels of depression and loneliness. I got some good feedback from people who work at the companies involved, and wanted to share here.
I wrote to the study’s lead author, Melissa G. Hunt, and asked her whether in her work she had attempted to discover an optimal amount of social media usage. Here’s what she told me: “We cannot determine the ‘optimal’ time from our data. However, we can say that on average users who decreased their use from about an hour to about 25 minutes had improved outcomes. Some people in our study were using up to 2.5 hours per day. That’s clearly too much.”
I also spoke with some people who work (or used to work) at the companies in question, and they expressed frustration with studies that lump all social media usage together. Sending messages over Snapchat is not the same as thumbing through Instagram for two hours, they argue. The next generation of studies should draw finer distinctions around what kinds of social networking affect people negatively.
The caveat, though, is that most researchers don’t have access to that kind of fine-grained data — only Facebook does. So one thing the company could do is consider ways of making that data available, even if only in anonymized fashion, to researchers in closely monitored environments.
Finally, I also got an official comment from Facebook on Tuesday afternoon. Here it is:
Facebook did not participate in this study, but our teams are working to better understand the research about technology and well-being. We want people’s time on Facebook to be meaningful and positive and are building tools with people’s well-being in mind so they can better manage their experience. We are committed to continuing this work to foster safe and supportive communities for everyone.
Democracy
Russian trolls reached U.S. Instagram, Facebook users before midterms
Facebook Failed to Police How Its Partners Handled User Data
WhatsApp awards $1 million for misinformation research
How Joy Reid's Retweet Could Change Twitter
Operation Infektion
Airbnb And eBay Just Said They Would End Forced Arbitration For Sexual Harassment Claims
Google Internet Traffic Is Briefly Misdirected Through Russia, China
Elsewhere
Facebook auction of South Sudan child bride could inspire other families - activists
Another Facebook vulnerability could have exposed information about users and their friends
Target’s Twitter account was hacked and used for a bitcoin scam
James Woods turns his Twitter feed into a ‘bulletin board’ for California wildfire victims
Does Latinx Twitter Exist?
Are You Ready for the Nanoinfluencers?
Launches
Your Snapchat friendships now have their own profiles — and merchandise
Facebook takes on LinkedIn as a career portal with e-learning, expanded mentorship and jobs features
Best Apps for Instagram Stories Layouts
Takes
Computational Propaganda
And finally ...
Beto O'Rourke and Alexandria Ocasio-Cortez have mastered Instagram Stories
Talk to me
Send me tips, comments, questions, and suggestions on where The Interface should build HQ2.
Did you enjoy this issue?
If you don't want these updates anymore, please unsubscribe here
If you were forwarded this newsletter and you like it, you can subscribe here
Powered by Revue