Protect Consumers From Innovation's Unintended Consequences
Recent eyebrow-raising moves by Amazon to extend its reach further into the lives of American consumers underscore the need for lawmakers to keep pace with the innovations that are transforming our economy. It’s also a reminder that innovations by online retailers, in particular, will require smart policies to protect consumers and preserve a competitive marketplace.
In recent months, Amazon has raised concerns with a new patent that reportedly allows the company to block shoppers from using in-store wireless networks to visit competitors’ websites to comparison shop — a practice commonly known as “showrooming.” If Amazon detects a customer looking for better deals, it can send them a coupon or offer a discount to keep them shopping with Amazon.
Ironically, few companies have benefited more from showrooming than Amazon, which is in the midst of an aggressive push into the brick-and-mortar space. This includes not only opening more physical retail locations across the country but also its recent $13.7 billion acquisition of Whole Foods. The latter move has drawn a slew of antitrust concerns and calls from congressional lawmakers for federal regulators to scrutinize the deal.
Amazon’s patent illustrates how big internet tech companies are working to reshape retail, and why lawmakers must stay up to date on the broad implications of these changes for both consumers and businesses. Already, innovations such as “smart home” apps are allowing shoppers to make purchases with simple voice commands, helping online companies compete with traditional retailers to serve consumers who seek convenience at the lowest possible price.
As these innovations continue to change the way Americans live and shop, so, too, will the rules and regulations that protect consumers and preserve a level, competitive playing field for all businesses.
Consumer privacy and technology experts, for instance, have raised concerns about Amazon’s sharing of personal consumer data with third-party platforms. Recent controversies with other smart home devices — such as a television commercial designed to trigger voice-controlled devices or unwanted advertisements slipped into Google Home responses — are also provoking questions about how these new devices might be used in unintended and potentially invasive ways.
Amazon’s patent is raising similar alarms among data privacy watchdogs and could also spark concerns about anti-competitive practices. Moreover, if competitors start developing their own blocking technologies, we could see a system in which consumers’ shopping options are actually limited rather than broadened.
While it’s impossible to predict the future of retail, we are now witnessing the transformation of the industry, as companies develop new technologies to reach more consumers. At the same time, it is imperative that lawmakers keep up with these changes to ensure retail innovation continues to benefit consumers, rather than undermining free-market competition.
Brian McNicoll is a former director of communications for the House Committee on Oversight and Government Reform and a former senior writer for the conservative Heritage Foundation.