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.
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 .
