Amazon has filed a patent on a blockchain-based technology that would allow it collect vast amounts of data not only about its sellers, but also about the sellers’ supply chain, down to where raw materials are sourced.
Amazon says it would then use this data to create a virtual inspection system, allowing the retail giant to certify goods as organic, non-toxic, sustainable, “Made in the U.S.A.,” or having other benefits consumers might seek.
“To certify an item, a verifiable record for the item indicating, for example, what materials were used to make the item, where the item was made, who made the item, when the item was made, and so forth, is needed,” the patent application claims.
While the stated intention is beneficial or, at least, benign, critics fear the world’s biggest retailer will use the information to decide what products are worthy to be on Amazon’s website, thus further shaking up the retail industry – much as Walmart changed the retail and manufacturing industries by demanding low wholesale prices, which shook up supply chains and forced some companies to cheapen their products or go out of business entirely.
Sellers that fail to meet Amazon’s standards of “greenness,” purity, or other measures of quality Amazon arbitrarily sets could be denied a place in the world’s biggest department store.
TRENDPOST: Amazon’s overwhelming market power would force sellers to comply with its standards, whatever they might be. This could shake out small businesses, forcing them to change suppliers, buy more costly raw materials, or spend more time documenting their purchases and processes – shifts that could squeeze their profit margins or cause them to radically shift what they do and how they do it. Some might have no affordable alternatives and be banned from Amazon’s website.
Amazon also has a history of hostility to union labor; it denies sellers the right to sue the company and forces complaints to be arbitrated instead. Critics worry a company with such a history can’t be trusted to certify other businesses as treating workers well or playing fair with suppliers. For many, Amazon’s certification of a product might itself not be trustworthy.
by Bennett Daviss
