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FTC approves $61.7m settlement with Amazon for pocketing driver tips • The Register

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The US Federal Trade Commission on Friday announced the approval a consent order against Amazon that requires the company to pay $61.7m to resolve charges that for two and a half years it took tips intended for Amazon Flex drivers and concealed the diversion of funds.

The deal was proposed in February but required sign-off from the US trade watchdog. It arises from FTC charges that Amazon misrepresented both to Amazon Flex drivers and to the public what the company would pay for delivery work.

The tech giant launched its Flex service in 2015, promising drivers – which it classified as independent contractors and referred to as “delivery partners” – that it would pay $18-25 per hour for the delivery of goods from Amazon.com, Prime Now (household goods), Amazon Fresh (groceries), and Amazon Restaurant (takeout).

Amazon’s ads made promises like, “You will receive 100 per cent of the tips you earn while delivering with Amazon Flex.”

However, during the period from late 2016 through August 2019, drivers – who, as independent contractors, paid for their own car, fuel, maintenance, and insurance – saw only a portion of the promised gratuity when customers opted to tip.

That’s because Amazon allegedly, without telling its drivers, shifted to a “variable base pay” rate, which varied by location, wasn’t disclosed to drivers, and was frequently lower than the promised hourly range.

“Under the variable base pay approach, for over two and a half years, Amazon secretly reduced its own contribution to drivers’ pay to an algorithmically set, internal ‘base rate’ using data it collected about average tips in the area,” the FTC complaint [PDF] explains.

“The base rate varied by location and sometimes varied within the same market. But this algorithmically set ‘base rate’ often was below the $18-$25 per hour range that Amazon had promised at the time of drivers’ enrollment and in specific block offers.”

To make up any difference between the base rate and the advertised minimum, Amazon is said to have used some or all of any tip left by customers to meet its payment commitment. For example, if Amazon set a base rate for a region at $12 and the customer left a tip of $6 via Amazon’s electronic tip collection system, then the company paid the driver only $12 and augmented the payment with the $6 tip, instead of paying the $18.

To conceal this calculation, Amazon displayed driver earnings in its driver app as the combination of its base rate and any tip rather than listing the two amounts separately. As described in the FTC complaint, Amazon did so deliberately and adopted a strategy to avoid communicating to drivers that their earnings had been affected by its pay rate change.

“Amazon employees also acknowledged internally that Amazon was using customer tips to subsidize its minimum payments to drivers, and that these subsidies were saving Amazon millions of dollars at the drivers’ expense,” the complaint explains. “In August 2018 emails, Amazon employees referred to the issue as ‘a huge PR risk for Amazon’ and warned of ‘an Amazon reputation tinderbox.'”

When questioned by a reporter about its Flex pay practices in February 2019, Amazon offered a response that ducked the question, the complaint says. In May 2019, the FTC told Amazon it was investigating the company’s Flex payment practices. Then in August 2019, Amazon announced an “Updated Earnings Experience,” offering terms similar to its initial unfulfilled commitment – to let drivers keep 100 per cent of any tips.

The $61.7m settlement represents the amount of tips that Amazon allegedly withheld from drivers and it forbids Amazon from misrepresenting the likely income of drivers and from changing how tips are used as compensation without prior driver consent. Those requirements will last 20 years and be subject to civil penalties of $43,792 per violation.

The FTC says it will disburse the funds to affected Flex drivers within six months of receiving payment and driver information from Amazon.

Amazon did not respond to a request for comment. ®

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Google, Apple and Microsoft report record-breaking profits | Google

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Google, Apple and Microsoft reported record-breaking quarterly sales and profits on Tuesday night as the firms continue to benefit from a pandemic that has created a “perfect positive storm” for big tech.

Apple made a $21.7bn (£15.6bn) profit for the three-month period that ended in June, its best fiscal third quarter in its 45-year history, boosted by strong sales of the iPhone 12 and growth in its services business.

Alphabet, Google’s parent company, reported second-quarter revenue of $61.8bn (£44.5bn), a 62% increase on the same period a year earlier, and a profit of over $18.5bn (£13.3bn), more than twice its profits for the same period last year. The company’s advertising revenues rose 69% from last year.

Microsoft, too, beat expectations, reporting revenues of over $46bn (£33bn) for the quarter – a rise of 21% compared to the same quarter last year.

The results come after Tesla reported a record profit on Monday in one of the busiest ever weeks for quarterly US earnings results. The big tech blowout earnings continue with Facebook on Wednesday and Amazon on Thursday.

Collectively, the market value of Google, Amazon, Apple, Microsoft and Facebook is now worth more than a third of the entire S&P 500 index of America’s 500 largest traded companies, as their share prices have soared during the pandemic.

Thomas Philippon, an economist and professor of finance at New York University, said big tech firms have been the biggest economic winners from the pandemic as global lockdowns have pushed more businesses and consumers to use their services.

“They were already on the rise and had been for the best part of a decade, and the pandemic was unique,” Philippon said. “For them it was a perfect positive storm.”

Analysts at Morgan Stanley reckon Alphabet is on course to achieve full-year net income of $65bn, a 59% increase on 2020. Its annual sales are, the bank reckons, on track for $243bn – a $60bn increase on last year.

Alphabet’s shares have risen by 75% in the past year to a record $2,670, but analysts predict they could climb higher still despite regulators around the world threatening to curb its dominance of the internet search market. Morgan Stanley said the stock could reach as high as $3,060, and even under a worse case scenario is unlikely to fall below $1,800.

Morgan Stanley analyst Brian Nowak said pandemic lockdowns had boosted Google as consumers spent more time online researching potential purchases. He said survey data showed that 54% of retailers ranked Google search products, including YouTube, as “their first place to go to research products online, up from 50% in past surveys”.

“Google websites growth is likely to rebound in ’21 as we believe there are several underappreciated products driven by mobile search, strong YouTube contribution, and continued innovation, such as Maps monetisation,” Nowak said in a note to clients.

Apple has been making so much money that over the past eight years it has bought back $421bn worth of shares, but it still has about $80bn of cash sitting on its balance sheet.

When Microsoft reported a 31% rise in profits at its last quarterly results, its chief executive, Satya Nadella, said it was “just the beginning” as the shift to digital technology was “accelerating” fast.

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The share price rise of the big tech firms has made billions for their super-rich founders and early investors. Forbes magazine calculated recently that there are now 365 billionaires who made their fortunes in technology, compared with 241 before the pandemic.

Collectively, the world’s tech billionaires hold personal fortunes of $2.5tn, up 80% on $1.4tn in March 2020. Amazon’s founder and chief executive, Jeff Bezos, remains the world’s richest person with an estimated $212bn fortune, and is closely followed in the league table of the wealthy by Tesla co-founder Elon Musk with $180bn, Microsoft co-founder Bill Gates with $151bn, and Facebook’s Mark Zuckerberg with about $138bn.

Zuckerberg believes the internet will take on an even bigger role in people’s day-to-day lives in the future, and instead of interacting with it via mobile phones people will be immersed via virtual reality headsets.

He said Facebook would transition from a social media platform to a “metaverse company”, where people can work, play and communicate in a virtual environment. Zuckerberg said it would be “an embodied internet where instead of just viewing content – you are in it”.

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Scam-baiting YouTube channel Tech Support Scams taken offline by tech support scam • The Register

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The Tech Support Scams YouTube channel has been erased from existence in a blaze of irony as host and creator Jim Browning fell victim to a tech support scam that convinced him to secure his account – by deleting it.

“So to prove that anyone can be scammed,” Browning announced via Twitter following the attack, “I was convinced to delete my YouTube channel because I was convinced I was talking [to YouTube] support. I never lost control of the channel, but the sneaky s**t managed to get me to delete the channel. Hope to recover soon.”

To fool Browning, the ruse must have been convincing: “I track down the people who scam others on the Internet,” he writes on his Patreon page. “This is usually those ‘tech support’ call frauds using phone calls or pop-ups. I explain what I do by guiding others in how to recognise a scam and, more importantly, how to turn the tables on scammers by tracking them down.”

Browning has made a name for himself with self-described “scam baiting” videos, in which he sets up honeypot systems and pretends to fall for scams in which supposed support staffers need remote access to fix a problem or remove a virus – in reality scouring the hard drive for sensitive files or planting malware of their own.

“I am hoping that YouTube Support can recover the situation by 29th July,” Browning wrote in a Patreon update, “and I can get the channel back, but they’ve not promised anything as yet. I just hope it is recoverable.”

Whether Browning is able to recover the account, and the 3.28 million subscribers he had gathered over his career as a scam-baiter, he’s hoping to turn his misfortune into another lesson. “I will make a video on how all of this went down,” he pledged, “but suffice to say, it was pretty convincing until the very end.”

Tech support scams have been going on for about as long as people have needed technical support, but a report published by Microsoft last month suggested the volume may be declining. The same report found that the 18-37 age group was the most likely to fall victim – and that 10 per cent of those surveyed had lost money to a scammer.

YouTube was approached for an explanation of how deleted accounts could be restored and what precautions it has in place to prevent its users – even those with considerable experience in the field of con-artistry – from falling victim to tech support scams, but was unable to provide comment in time for publication.

Browning did not respond to a request for comment. ®



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Orion the humpback whale ‘a dream sighting’ for marine observers

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A member of the Irish Whale and Dolphin Group spotted the humpback whale while out conducting a survey on marine life off the Donegal coast.

Marine mammal observer Dr Justin Judge described the moment he spotted a lone humpback whale off the coast of Donegal as “a dream sighting.”

Judge spotted the whale at 9.30 on the morning of 9 July while representing the Irish Whale and Dolphin Group (IWDG) on board the Marine Institute’s RV Celtic Explorer.

The group of researchers and observers was out on the waters around 60 kilometres north-northwest of Malin Head when they saw the whale. They were carrying out the annual Western European Shelf Pelagic Acoustic (WESPAS) survey.

“This is a dream sighting for a marine mammal observer,” Judge said. He explained that the creature would be nicknamed Orion – which had a personal meaning for Judge and his family.

“The individual humpback whale ‘Orion’ has been named after the Greek mythological hunter, since the whale was moving with the fish stocks for food. It is also my son’s middle name so fitting on both fronts,” Judge said.

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He added that the team had also observed “a lot of feeding action from a multitude of cetacean species that day, including bottlenose, common, Risso’s and white-sided dolphins, grey seals and minke whales.”

To date, the IWDG has documented 112 individual humpback whales in Irish waters since 1999, many of which are recorded year after year. Humpback whales are frequent visitors to Irish waters as they are an ideal feeding area for humpback whales stopping off in the area on their migration across the Atlantic.

The beasts are identifiable thanks to the distinctive pattern on the underside, which is unique to every individual whale.

“Observing any apex predator in its natural environment is exciting but a new humpback whale for Irish waters, this is special,” WESPAS survey scientist, Ciaran O’Donnell of the Marine Institute said.

The Marine Institute’s WESPAS survey is carried out annually, and surveys shelf seas from France northwards to Scotland, and west of Ireland. WESPAS is the largest single vessel survey of its kind in the Northeast Atlantic, covering upwards of 60,000 nautical miles every summer. The survey is funded through the European Maritime Fisheries and Aquaculture Fund under the Data Collection Programme which is run by the Marine Institute.

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