Tech News : Amazon Launches Amazon Live FAST Shopping Channel

Previously available on desktop, mobile and Fire TV, Amazon has now extended the reach of its “Amazon Live” FAST free ad-supported, interactive TV “shoppable” channel by launching it on Prime Video and Freevee, for US customers.

What Is Freevee? 

For those who aren’t familiar with Freevee, it’s an Amazon-owned, ad-supported, premium, free streaming service that offers a 24/7 variety of TV shows, movies, and original content. It was previously known as IMDb TV. Freevee can be watched via an app on Amazon devices like Fire TV and Echo Show, smart TVs from brands like LG and Samsung, streaming media players including Roku and Apple TV. It can also be watched on gaming consoles (Xbox and PlayStation), mobile devices with Android and iOS apps, and directly through web browsers on PCs and laptops.

Amazon Live 

Amazon Live was originally launched on February 7, 2019. It’s a live streaming service where influencers and brands can promote and demonstrate products available on Amazon in real-time, similar to a digital shopping channel. The platform allows viewers to interact with hosts through a live chat feature and directly purchase products featured in the streams.

How Popular Is It? 

Amazon says that in 2023, more than 1 billion customers in the US and India watched Amazon Live streams across desktop, mobile, and Fire TV.

Easy To Buy 

Amazon also says that one of Amazon Live’s most unique benefits is how customers can “easily add items to their shopping cart and complete their purchases in just a few clicks without ever leaving what they’re watching”. 

Now On Prime And Freevee 

Wayne Purboo, vice president of Amazon Shopping Videos, announced the launch of Prime and Freevee saying “We are excited to bring customers more ways to shop with their favorite Amazon Live creators and brands on our premium streaming services”. Mr Purboo described the reason for (and the benefit of) extending the reach of Amazon Live Fast saying: “With the new ‘Amazon Live’ FAST Channel on Prime Video and Freevee, we’re making shoppable entertainment more accessible, interactive, and engaging than ever before.” 

How It Works 

With Amazon Live FAST, while watching the FAST Channel, customers can open the Amazon Shopping app on their phone, and type “shop the show” into the search bar. This enables them to be instantly directed to a shopping carousel highlighting the featured products they see on TV in real-time.

Why?

Amazon says that with 75 per cent of adults in the US looking at a mobile device while watching TV, the “shop the show” technology means customers are given a seamless, interactive, and convenient “shopping experience”. In other words, it’s incredibly easy to buy on impluse!

Creator and Brands 

Amazon Live FAST on Prime Video and Freevee will feature customers’ most-watched and most-loved content and will also provide an opportunity for creators and brands. Amazon says its creators “bring their unique style, expertise, gossip, and authenticity to each stream, making the experience even more engaging and entertaining.” 

The experience that Amazon is trying to create for customers can be summed up by Paige DeSorbo, described as a TV personality, fashion tastemaker (and co-host of Giggly Squad) who says: “Watching Amazon Live is like shopping with a friend who is also a personal stylist.” 

What Does This Mean For Your Business? 

Amazon’s launch of Amazon Live FAST on its two premium channels, Prime Video and Freevee, is a move designed to extend a successful format of live streaming and ad-supported content. This move should help Amazon to capture an even larger portion of the digital advertising market while boosting user engagement across its platforms.

For content creators, this could open up new opportunities for real-time audience engagement, which could significantly enhance interaction and visibility. Also, the direct integration of streaming with purchasing options, making it incredibly easy for customers to buy on impulse, offers a lucrative new channel for monetisation through advertising revenue shares and increased sales conversions. Creators can also benefit from Amazon’s vast customer base, potentially expanding their reach well beyond traditional or social media channels.

For competitors, Amazon’s entry into the FAST channel market is a heightening of competition, challenging established players in live streaming and ad-supported content like YouTube, Twitch (an American interactive video live-streaming service), and other streaming services. These competitors may now face increased pressure to innovate and improve their offerings in terms of content quality, user experience, and pricing models to retain and grow their user bases. Also, Amazon’s extensive data capabilities and its seamless integration with its retail and advertising businesses mean it’s now an immensely powerful contender for attracting ad spends.

This could result in the shifting of advertising money away from traditional TV and other digital platforms, compelling content creators and competitors alike to adapt to these rapidly changing market dynamics. Amazon’s strategy not only aims to diversify and enrich its content offerings but also to further integrate its ecosystem, making it a comprehensive hub for entertainment, shopping, and social interaction (no need to go anywhere else), which could reshape the landscape of digital streaming and advertising.

Tech News : Amazon Fined Over “Dark Patterns”

Amazon’s (Luxembourg-based) Polish e-commerce site, Amazon.pl (Amazon EU SARL) has been fined by Poland’s competition and consumer protection watchdog following customer complaints that their orders were being mysteriously cancelled.

Massive Fine 

Following an investigation about the complaints, the President of Poland’s UOKiK consumer protection watchdog found Amazon EU SARL guilty of infringement of collective consumer interests and imposed a fine of more than 31 million zlotys / £6,342,000.

What Happened? 

In short, the Polish watchdog found that customers shopping on Amazon’s Polish website had clicked on the “Buy Now” and “Proceed to Checkout” options (paying for products such as popular e-book readers), assuming that this constituted a sale, and then waited for delivery. However, the delivery didn’t happen due to Amazon repeatedly cancelling the orders because it allegedly thought the sales contract and delivery obligations to the customer were only active after an item has been shipped, rather than when the customer purchases it.

The complaints from disappointed customers who had been waiting for cancelled orders then led to the investigation, ultimately resulting in Amazon within Poland being fined.

Reasons 

The President of Poland’s Office of Competition and Consumer Protection (UOKiK) imposed the 31 million zloty fine on Amazon EU SARL for reasons related to infringing collective consumer interests, which were:

– Misleading sales and delivery practices. Amazon’s Polish website was deemed to have misled consumers about the timing of sales contract conclusions, product availability, delivery times, and consumer rights. For example, with regards to Amazon offering “Guaranteed Delivery” (i.e. the product should reach the consumer within a certain period of time), if this doesn’t happen, the consumer can request a refund of the delivery fee. However, it was found in the case of Amazon Poland that consumers didn’t receive information about the rules of this service before placing an order – the information was only made available at the order summary stage (if the consumer had decided to go through several steps defining the delivery details). This meant that if they hadn’t, they wouldn’t have been aware of their rights and may not have requested a refund or received it (when shipping was delayed). Also, information about the “Guaranteed Delivery” was found not to have been included within the order confirmations customers received.

– “Dark pattern” design tricks. This refers to Amazon being judged to have used deceptive design elements that could inject a false sense of urgency into the purchasing process, misleading shoppers about elements like product availability and delivery dates. As outlined by UOKiK’s  President, Tomasz Chróstny,  “Information about the availability of a product and its fast shipping is very valuable for consumers and for many people it can be the main reason why they make a purchase decision. However, such information must not be a decoy. If a trader gives a specific delivery date, they must meet it. This practice by Amazon is categorised as ‘dark patterns,’ as it uses pressure to make the consumer order the product as soon as possible.” 

– Cancellation of customers’ orders after payment. The practice of Amazon treating orders as non-binding until the shipment/delivery was confirmed, allowing the company to cancel them even after consumers had paid was found to be misleading as consumers believed they were concluding a sales contract upon payment.

– A lack of clarity in communication. Information crucial to understanding Amazon’s sales contract and delivery guarantee terms were found not to have been made easily accessible to consumers, and to (often) have been presented in a way that was hard to find or read (such as using a grey font on a white background, at the bottom of the page).

– The use of deceptive countdown clocks. Amazon also faces criticism in this case for having displayed countdown timers and stock availability claims that suggested imminent deadlines for order placement or implied limited product availability, without guaranteeing timely delivery.

Amazon’s practices in this case were therefore deemed to potentially mislead customers as regards the nature of their transactions on the platform, affecting their consumer rights and trust.

What Does Amazon Say? 

In its defence, Amazon Poland highlighted how it prioritises fast and reliable delivery across a wide selection of products and that Amazon.pl offers millions of items with fast and free Prime delivery. Amazon also emphasised its continuous investment and effort to provide customers with a clear and reliable delivery promise at checkout. However, it acknowledged that while most of their deliveries arrive on time, they are committed to rectifying situations promptly whenever delays or order cancellations occur.

Amazon also mentioned its collaboration with the UOKiK, proposing multiple voluntary amendments to further improve the customer experience on Amazon.pl, but stated that it strongly disagreed with the UOKiK’s assessment and penalty. Amazon also says it intends to appeal the decision.

What Does This Mean For Your Business? 

This story illustrates how any practices that could mislead customers regarding the nature of their online transactions (thereby affecting their consumer rights and trust) can lead to some painful consequences for retailers.

Although Amazon doesn’t agree with the decision and plans to appeal, the accusation and details of “dark patterns” outlined by the UOKiK in this case could be potentially quite damaging for Amazon’s reputation and could lead to them being scrutinised even more closely in the future.

While being potentially beneficial for Amazon in terms of operational flexibility, sales, and competitive positioning, the practices outlined by the UOKiK clearly backfired in a spectacularly expensive way for Amazon with a £6,342,000 fine which may be powerful enough to make Amazon more careful in future.

This case also underscores the critical importance of transparency and honesty in online retail operations. Businesses, large and small, must recognise that the digital consumer experience is not just a pathway to transactions but can have an effect on brand reputation and customer loyalty. The regulatory action taken against Amazon by Poland’s UOKiK should, therefore, serve as a potent reminder that misleading practices (intentional or not) can have severe legal and financial repercussions. It highlights the necessity for all e-commerce entities to meticulously review and possibly revamp their online sales practices, ensuring they are not only legally compliant but also aligned with ethical standards that prioritise consumer rights and transparency.

Featured Article : Doorbell Ding Dong

After the Amazon-owned ‘Ring’ video doorbell company’s recent major subscription price hike across its range caused anger and made the news, we look at what customers have said and if there’s a way to beat the price hike.

Ouch! 

Ring has angered customers and received some negative publicity after announcing that starting on 11 March this year, its subscription price for its basic plan customers will rise by an eye-watering 43 per cent, from £34.99 to £49.99 per device, per year.

This will mean that the basic plan price has doubled since 2022 when it was priced at £24.99 per year for each device.

Also, those who pay monthly will see a price increase from £3.49 to £4.99 a month.

Angry 

The announcement of the price increase prompted angry reactions from customers including many taking to Reddit to complain, saying they’d already cancelled their subscription, and suggesting ways to object and force a U-turn. For example, one very popular threat in the Ring sub-Reddit is called “Cancel your Ring subscription.” At the head of the thread in Reddit, for example, the ‘Discussion’ summary reads: “Even if you plan on paying for it with the new price, just cancel it now and select price as the reason why” and “it just increased not long ago and now they are trying to introduce an even bigger increase. If everyone cancelled, the increase would be called back immediately.” 

Other points that angry customers have made include:

– They’ve just bought a Ring doorbell or been given one for Christmas but won’t use it because the subscription price is now too high.

– Not wanting to invest heavily in hardware for a company that has gained a reputation for subscription price hikes.

– Highlighting how the company’s increase in per-device price for a capability that may not be used anyway (the ability to save, review and share video recordings) amounts to Ring damaging its reputation unnecessarily.

Others, however, who can accept the price rise, are not willing to cancel or switch (they still perceive value outweighing the price). For example, one Reddit user wrote: “It sucks, but who’s going to switch over 10 dollars a year? I’m not going to uninstall it and change to another one. I live in a neighbourhood with a lot of people and the past recordings are insurance in case anything happens.” 

What Does Ring Say? 

As yet no specific statement in answer to the threat of mass subscription cancellations has been released by Ring and there’s only a price update page on the website explaining what happens if customers cancel their subscriptions.

Suggestion About How To Freeze Price – Martin Lewis 

Consumer financial champion and broadcaster Martin Lewis, however, took to the ‘X’ platform to suggest a way that users can beat the 43 per cent price hike. Mr Lewis suggested: “Cancel now and get a pro-rata refund (you may lose saved files though) – Sign up again at the current price which then locks it in for the next year.” 

Mr Lewis also said he will be sending out a “Full checked out update to come via MSE News” i.e., Money Saving Expert news.

Alternatives 

In what is a growing video doorbell market, there are alternative/competing products, although Ring is the market leader in the UK (up until now), and competitors are unlikely to have the backing of a company with the market power and wealth of Amazon.

Some examples of competing products include Nest Hello, Arlo Video Doorbell, August View, Eufy, and Tapo. Nest Hello, for example, is known for its high video and audio quality, sleek design, and advanced features like activity zones and familiar face alerts. Arlo Video Doorbell is reported to offer excellent video quality, a wide field of view, two-way talk functionality, and smart notifications that can differentiate between people, vehicles, and animals. August View is known for characteristics like its user-friendliness and day-to-day use.

Other Concerns 

Beyond price issues, there are other concerns around the use of video doorbells not least of which is privacy. For example, back in October 2021 in the UK, a judge ruled that video images and audio files that a Ring doorbell and cameras captured of the neighbour of an Oxfordshire plumber were her personal data and that the video doorbell and the use of the doorbell of this case was a kind of harassment and had been in breach of the Data Protection Act 2018 and UK GDPR. Consequently, the owner of the Ring doorbell (the plumber) was fined a substantial sum. Following this Fairhurst v Woodard case, Amazon, the parent company of Ring LLC, issued a warning to its Ring Doorbell owners saying, “We strongly encourage our customers to respect their neighbours’ privacy and comply with any applicable laws when using their Ring product.”

The case doesn’t mean that any usage of Ring doorbells is illegal as the prosecution mainly centred around the doorbell’s audio recording capabilities (the range at which it was capturing audio) being too much for crime prevention and home protection purposes. Also, it was found that the doorbell’s owner hadn’t been transparent about how and when his camera was operating. That said, it does highlight how there is a real risk if video doorbell owners don’t adhere to data privacy and other relevant laws.

In addition to privacy concerns, other risks that owners of video doorbells may need to consider include:

– Security risks (i.e. a risk of hacking) where unauthorised individuals could gain access to your video feed or personal data.

– Not understanding where and how video data is stored, who has access to it, and how long it is retained (and the potential legal implications thereof).

– Network requirements. This is because video doorbells require a stable and strong Wi-Fi connection. Weak signals can affect performance.

– As illustrated by this Ring price hike, beyond the initial purchase, buyers need to carefully consider subscription fees for additional features, like cloud storage or enhanced security measures.

– For wireless video doorbell models, battery life can vary, and replacing or charging batteries can be a hassle.

– It’s possible, depending on the sensitivity and technology used, owners may receive false alerts from passing cars, animals, or other non-human movements, which can be annoying and disruptive.

– Whether or not the doorbell can operate well in the weather conditions common to your area.

– Compatibility with existing smart home devices and ecosystems can vary, impacting your overall smart home experience.

What Does This Mean For Your Business? 

Even though Amazon’s Ring doorbell company announced a couple of years ago that there would be a price increase, the sheer scale of it has been met with anger as well as many threats and claims of cancellations. The fact that customers appear not to be able to see any additional value or extra benefit to justify such a large price increase (and perhaps a lack of further communication about it) alongside the availability of some quality alternatives appears to have considerably lowered the barrier to exit and created a PR disaster for Ring.

Having Amazon as a very powerful and wealthy owner may have been a key reason why Ring has become the market leader, but this makes it all the more surprising that a price rise has been handled in this way. For Ring customers who’ve only recently purchased or been gifted the hardware, this is a blow that may cause them to cut their losses and try a competitor. For video doorbell competitors, therefore, it’s the best opportunity they’ve had in years to gain share and chip away at Ring’s market position.

For Ring, however, if the ‘customer rebellion’ continues, it could put pressure on them to go for a climbdown or to announce some kind of additional benefit(s) to pacify and retain customers. Price sensitivity and changing market conditions, particularly in a cost-of-living crisis, are something that all B2C companies (especially) need to take seriously in their pricing strategies.

Tech News : Amazon Prime Video : Pay To Remove Ads

Amazon has announced that from 5 February 2024, its Amazon Prime Video customers in the UK and Germany will see “limited” ads unless they pay £2.99 per month to remove them.

Why? 

Amazon says that in view of the fact it won’t be making changes in 2024 to the current price of Prime membership, and that it will continue investing in content and keep increasing that investment over a long period of time, it will be adding the “limited” adverts that customers must pay to remove.

In the announcement about the pay-to-remove ads, Amazon listed the many benefits of the Prime Service, and its heavy investment in the service. More specifically, it’s also likely that its renewals of hit series like Redemption and The Boys, its deal with Games Workshop (bringing Warhammer 40,000 to cinema screens) and its plans for other popular content like a series based on the video game Fallout, may also be used to balance out the cost/value analysis in the minds of customers.

The online retail and tech giant and streamer is also keen to stress that it will “have meaningfully fewer ads than linear TV and other streaming TV providers.” 

That said, live content such as sports will continue to include advertising whether customers pay for Prime ad removal or not.

Ad-Free Option Later 

Amazon has also said that it will be adding a new ad-free option but will share the price of that option at a later date.

How And When? 

Amazon says no action is required for Prime members as the “gradual” rollout of the ads takes place and that it will email Prime members several weeks before ads are introduced into Prime Video. The email will also contain information on how users can sign up for the ad-free option and will, presumably, give the price of the ad-free service.

More Expensive Than The US And Germany

Although customers in the US and Canada will see ads rolled out earlier than in the UK (from 29 January), at US $2.99 (£2.35) to stop the ads, this works out cheaper than for UK customers.  It is also understood that customers in Germany will have a better deal by only having to pay the equivalent of Germany will pay £2.60.

Competitors  

Amazon Prime’s competitors, Disney+ and Netflix, have also introduced their own cheaper ad-supported memberships (and price rises). For example, back in August 2023, Disney+ announced its plan to introduce a cheaper streaming option with adverts in the UK in November (due to falling profits). Also, it was back in November 2022 when Netflix launched its ‘Basic with Ads’ streaming plan.

What Does This Mean For Your Business? 

For Amazon Prime, adopting the limited ads that require payment to remove them idea provides an extra revenue stream which could be used to contribute to its investment in content creation thus enhancing the platform’s offerings and competitiveness.

The email to be sent to customers about the ads also provides Amazon Prime with an opportunity to get customers’ attention and highlight its ad-free option in a more ‘under-the-radar’ way in what is a highly competitive streaming market.

Since the boom-time of the pandemic when streaming services were prioritised and multiple users per account tolerated, the post-pandemic saw user numbers drop, e.g. for Netflix. This led to the leading streaming platforms having to increasingly explore varied revenue models, including ad-supported tiers in order to offer more attractive and diversified subscription options to retain and attract a broader subscriber base in this highly competitive space. Amazon Prime, therefore, like Netflix and Disney+, is now offering ad-free options to increase user numbers and attract this broader range of customers (more price-sensitive viewers) thereby intensifying the competition among streaming services.

However, although Amazon Prime’s move could provide new revenue opportunities, it also presents challenges and choices for customers, who now must weigh the trade-off between tolerating ads or paying more for uninterrupted viewing, thereby potentially unsettling them and lowering barriers to exit. As Amazon’s announcement about the change shows, it’s hoping that its commitment to a lower ad volume compared to other platforms could mitigate some potential viewer dissatisfaction and that reminding customers of the many benefits of its services may soften the blow.

Amazon’s business-changing model for streaming is, therefore, an expected reflection of the changing landscape of the highly competitive streaming services market, as providers continuously adapt their strategies.

Featured Article : Amazon Launching ‘Q’ Chatbot

Following on from the launch of OpenAI’s ChatGPT, Google’s Bard (and Duet), Microsoft’s Copilot, and X’s Grok, now Amazon has announced that it will soon be launching its own ‘Q’ generative AI chatbot (for business).

Cue Q 

Amazon has become the latest of the tech giants to announce the introduction of its own generative AI chatbot. Recently announced at the Las Vegas conference for its AWS, ‘Q’ is Amazon’s chatbot that will be available as part of its market-leading AWS cloud platform. As such, Q is being positioned from the beginning as very much a business-focused chatbot with Amazon introducing the current preview version as: “Your generative AI–powered assistant designed for work that can be tailored to your business.” 

What Can It Do? 

The key point from Amazon is that Q is a chatbot that can be tailored to help your business get the most from AWS. Rather like Copilot is embedded in (and works across) Microsoft’s popular 365 apps, Amazon is pitching Q as working across many of its services, providing better navigation and leveraging for AWS customers with many (often overlapping) service options. For example, Amazon says Q will be available wherever you work with AWS (and is an “expert” on patterns in AWS), in Amazon QuickSight (its business intelligence (BI) service built for the cloud), in Amazon Connect (as a customer service chatbot helper), and will also be available in AWS Supply Chain (to help with inventory management).

Just like other AI chatbots, it’s powered by AI models which in this case includes Amazon’s Titan large language model. Also, like other AI chatbots, Q uses a web-based interface to answer questions (streamlining searches), can provide summaries, generate content and more. However, since it’s part of AWS, Amazon’s keen to show that it adds value by doing so within the context of the business it’s tailored to and becomes an ‘expert’ on your business. For example, Amazon says: “Amazon Q can be tailored to your business by connecting it to company data, information, and systems, made simple with more than 40 built-in connectors. Business users—like marketers, project and program managers, and sales representatives, among others—can have tailored conversations, solve problems, generate content, take actions, and more.” The 40 connectors it’s referring to include popular enterprise apps (and storage depositories) like S3, Salesforce, Google Drive, Microsoft 365, ServiceNow, Gmail, Slack, Atlassian, and Zendesk. The power, value, and convenience that Q may provide to businesses may also, therefore, help with AWS customer retention and barriers to exit.

Benefits 

Just some of the many benefits that Amazon describes Q as having include:

– Delivering fast, accurate, and relevant (and secure) answers to your business questions.

– Quickly connecting to your business data, information, and systems, thereby enabling employees to have tailored conversations, solve problems, generate content, and take actions relevant to your business.

– Generating answers and insights according to the material and knowledge that you provide (backed up with references and source citations).

– Respecting access control based on user permissions.

– Enabling admins to easily apply guardrails to customise and control responses.

– Providing administrative controls, e.g. it can block entire topics and filter both questions so that it responds in a way that is consistent with a company’s guidelines.

– Extracting key insights on your business and generating reports and summaries.

– Easy deployment and security, i.e. it supports access control for your data and can be integrated with your external SAML 2.0–supported identity provider (Okta, Azure AD, and Ping Identity) to manage user authentication and authorisation.

When, How, And How Much? 

Q’s in preview at the moment with Amazon giving no exact date for its full launch. Although many of the Q capabilities are available without charge during the preview period, Amazon says It will be available in two pricing plans: Business and Builder. Amazon Q Business (its basic version) will be priced at $20/mo, per-user, and Builder at $25/mo, per-user. The difference appears to be that Builder provides the real AWS expertise plus other features including debugging, testing, and optimising your code, troubleshooting applications and more. Pricewise, Q is cheaper per month/per user than Microsoft’s Copilot and Google’s Duet (both $30).

Not All Good 

Despite Amazon’s leading position in the cloud computing world with AWS, and its technological advances in robotics (robots for its warehouses), its forays in space travel (with Amazon Blue) and into delivery-drone technology, it appears that it may be temporarily lagging in AI-related matters. For example, in addition to being later to market with this AI chatbot ‘Q’, in October, a Stanford University index ranked Amazon’s Tital AI model (which is used in Q) as bottom for transparency in a ranking of the top foundational AI models with only 12 per cent (compared to the top ranking Llama 2 from Meta at 54 per cent). As Stanford puts it: “Less transparency makes it harder for other businesses to know if they can safely build applications that rely on commercial foundation models; for academics to rely on commercial foundation models for research; for policymakers to design meaningful policies to rein in this powerful technology; and for consumers to understand model limitations or seek redress for harms caused.” 

Also, perhaps unsurprisingly due to Q only just being in preview, some other reports about it haven’t been that great. For example, feedback about Q (leaked from Amazon’s internal channels and ticketing systems) highlight issues like severe hallucinations and leaking confidential data. Hallucinations are certainly not unique to Q as reports about and admissions by OpenAI about ChatGPT’s hallucinations have been widely reported.

Catching Up 

Amazon also looks like it will be makingeven greater efforts to catch up in the AI development world. For example, in September it said Alexa will be getting ChatGPT-like voice capabilities, and it’s been reported that Amazon’s in the process of building a language model called Olympus that could be bigger and better than OpenAI’s GPT-4!

What Does This Mean For Your Business?

Although a little later to the party with AI chatbot, Amazon’s dominance in the cloud market with AWS means it has a huge number of business customers to sell its business-focused Q to. This will not only provide another revenue stream to boost its vast coffers but will also enhance, add value to, and allow customers to get greater leverage from the different branches of its different cloud-related services. What with Microsoft, Google, X, Meta, and others all having their own chatbot assistants, it’s almost expected that any other big players in the tech world like Amazon would bring out their own soon.

Despite some (embarrassing internal) reviews of issues in its current preview stage and a low transparency ranking in a recent Stanford report, Amazon clearly has ambitions to make fast progress in catching up in the AI market. With its market power, wealth, and expertise in diversification and its advances in technologies like space travel and robotics and the synergies it brings (e.g. satellite broadband), you’d likely not wish to bet against Amazon making quick progress to the top in AI too.

Q therefore is less of a standalone chatbot like ChatGPT (OpenAI and former workers have helped develop AI for others) and more of Copilot and Duet arrangement in that it’s being introduced to enhance and add value to existing Amazon cloud services, but in a very focused way (more so for Builder) in that it’s “trained on over 17 years’ worth of AWS knowledge and experience”.

Despite Q still being in preview, Amazon’s ambitions to make a quantum leap ahead are already clear if the reports about its super powerful, GPT-4 rivalling (still under development) Olympus model are accurate. It remains to be seen, therefore, how well Q performs once it’s really out there and its introduction marks another major move by a serious contender in the rapidly evolving and growing generative AI market.

Tech News : Amazon’s Satellite Broadband : 100% Success

Amazon’s ‘Project Kuiper’ satellite broadband moved one step closer following a reported 100 per cent success rate for its first two prototype satellites.

Project Kuiper 

Like Elon Musk’s SpaceX, with Project Kuiper, Amazon hopes to set up its own low Earth orbit (LEO) satellite broadband network, i.e. 311 miles (500 kilometres) above Earth. It is still, however, in the early testing stage.

The only two satellites currently deployed by Amazon (and used to test Project Kuiper), were launched in early October using Atlas V rocket from United Launch Alliance (ULA) and which lifted off from Space Launch Complex-41 at Cape Canaveral Space Force Station, Florida.

Amazon says that following the recent tests, “mass satellite production ahead of a full-scale deployment” will begin early next year, followed by beta testing which will begin in the second half of next year, with partners like Vodafone and Verizon participating in the service pilots.

Also, Amazon is inviting enterprise, telecommunications, and government customers to register (early next year) to take part in part in its pilot to help get Project Kuiper up and running in the (hopefully not-too-distant) future.

Protoflight Success 

Amazon has reported that within 30 days of sending two prototype satellites into space, Project Kuiper achieved a 100 per cent success rate for its Protoflight mission, thereby “validating key technologies that underpin the network and moving the program another step closer toward that long-term vision.” 

The company says the experience was unique to the Protoflight mission because it only has two satellites in orbit.

Testing What? 

The company described the success of its two most recent Proto-flight tests as “an incredible feat.” The tests looked at different performance characteristics of the Project Kuiper network, on top of the basic functions of transmitting and receiving data. For example, the test looked at the performance of what Amazon calls the “RF communications payload,” which is the satellites’ parabolic antennas, phased array antennas, and other elements that will allow the system to send customer data traffic across the network.

The testing also involved three basic demonstrations of transmitting and receiving data over the Project Kuiper satellite network, which were:

– In the first demonstration, logging into an Amazon Prime account, searching for a product, adding it to the cart, and then checking out.

– In the second demonstration, logging into Prime Video, searching for the Amazon Original movie ‘A Million Miles Away’, and then streaming it as ultra-high definition (UHD) 4K video, thereby testing “network throughput and low latency”.

In the third demonstration, a two-way video call over Amazon Chime between Amazon’s test site in Texas and its mission operations centre in Washington, thereby testing low latency (for a smooth video call), and involving “full duplex” performance, with antennas simultaneously sending and receiving data.

What’s Next?

The rapid deployment stage next year will essentially involve launching enough satellites to build a constellation to provide enough coverage. It’s been reported that, for example, Amazon has secured 77 heavy-lift vehicles over three launch providers to help with this.

SpaceX Second Launch – Explosion 

Just days after Amazon’s announcement, on Saturday, Elon Musk’s SpaceX confirmed the second (test) launch of its SpaceX Starship rocket. Unfortunately, like the first test, it didn’t end particularly well. Apparently, the rocket flew for about eight minutes before SpaceX lost contact with it, and whilst the top part of the rocket successfully separated from the booster, it exploded shortly afterwards.

What’s So Good About Satellite Broadband, Anyway?

Amazon’s Jeff Bezos has already been to space himself before any of his satellites, thanks to founding his own Blue Origin company which builds and launches reusable launch vehicles and in-space systems for civil, commercial, and defence customers. This, plus Amazon’s huge financial and market power and ability to diversify means that it was only a matter of time before it used these synergies and capabilities to start offering satellite broadband of its own.

This puts in in direct competition with Elon Musk’s SpaceX and its Starlink broadband, which already has around 4,500 orbiting satellites in operation (accounting for more than 50 per cent of all active satellites orbiting the Earth). This means that Amazon’s less snappy, rather awkwardly named Project Kuiper, with its 2 orbiting satellites has some catching up to do in order to keep up as a front runner in what is seen by some as the tech billionaires’ battle for space and control over what will become the global communications network, and the power and influence that brings.

Not only is satellite broadband beneficial in terms of allowing internet and communications access anywhere in the world (for homes and businesses) and in areas where options are limited, but as recent conflicts have shown and as the EU has recognised (with plans to launch its own 170 satellites), it will be vital for space-based sovereignty and secure communication services.

Some commentators also see the rush to launch communications satellites (which is becoming more complex due to the amount of satellites and space junk already in orbit) as a way for companies and countries to claim their own bit of ‘space.’ Amazon’s bold announcement therefore of 100 per cent success may have seemed a little weak, considering there are only 2 satellites to test, but it’s larger purpose was to highlight Amazon’s intent, readiness, and capability to challenge and establish itself as major player in space, as it is on earth, and it’s understood that Amazon plans to send up thousands of satellites over the next 5 years.

For households and businesses in unserved and underserved communities, plus to large enterprises and government agencies operating all over the world, satellite broadband offers reliable, fast connections and for Starlink, Amazon (and no doubt others to follow), it offers not just another source of revenue, but power, influence, and staking a claim in the future.

Tech News : UK Joins Amazon’s Fast Drone Delivery Expansion

Amazon has announced that it will be expanding its ultra-fast Prime Air drone delivery operations to the UK, Italy and also to an as yet unnamed US city by the end of 2024.

Prime Air Drone Delivery

Amazon Prime Air is a service is intended to (safely) deliver packages to customers in 30 minutes or less using unmanned aerial drones. The unmanned (UAV) delivery drones, which fly at altitudes below 400 feet, use advanced sense-and-avoid technology to safely navigate the airspace and deliver the package to the intended location. As well as being convenient and fast, particularly in areas of road congestion, using these electric drones is also one way that Amazon hopes to reduce the carbon footprint of its package delivery and contribute to its goal of net-zero carbon emissions by 2040.

Using Drones For More Than A Year 

Amazon’s Jeff Bezos first revealed his plans for a drone delivery service back in 2013 and Amazon Prime Air completed its first fully autonomous drone delivery as far back as December 2016. In 2020, Amazon received approval from the US Federal Aviation Administration (FAA) to operate its fleet of Prime Air delivery drones, and Amazon says that it’s been using drones in the US to safely deliver customer packages weighing up to five pounds in one hour or less, for almost a year.

The company says the new locations (i.e. the UK, Italy, and a third city in the US) will add to its existing opt-in drone delivery operations, and that Amazon’s goal is to deliver 500 million packages on autonomous aircraft by 2030.

Regulators 

However, in order to expand its drone network, Amazon will need to satisfy the European regulator which it has found a challenge in the US, such as satisfying the FAA that the drones can operate an autonomous safety-critical system over densely populated environments within the busy US national airspace. As such, and with several test crashes, it was reported that by May this year, Amazon had only completed 100 deliveries in two small U.S. markets compared to Walmart backed DroneUp which reportedly made more than 110,000 deliveries in the US. Therefore, Amazon will need hundreds of incident-free flights to satisfy regulators and expand its services. Also, in the US, there have been some reports of low signups to drone delivery services.

For its new UK, Italian, and expanded US drone service, Amazon says it’s been working closely with national regulators and international regulators, has committed the right resources and has the right technology and infrastructure in place to make its service scalable, convenient, and safe.

Better Drones 

Amazon has announced that its UK and Italy Prime Air delivery service will be undertaken using its new MK30 drone design, which it says is “quieter, smaller, and lighter, than previous models” and can fly twice as far as previous Prime Air drone models, thereby reaching customers further from fulfilment networks. The MK30 drone features ‘best of both worlds’ design as its tiltrotor system means it can take off like a helicopter and transition into horizontal wing-borne flight once in the air.

Other Improvements 

Crucially, for UK flights, Amazon says the MK30 can “fly in more diverse weather conditions” with the package held inside the drone to protect it. Also key to this operation is that the MK30 is equipped with “sense and avoid technology” so it can avoid obstacles in the delivery area. Some of the problems with Amazon’s previous drone models were that they required site surveys to find landing spots with trimmed grass, requiring people, pets and objects needing to be 5 metres away. The hope is that the new MK30 drone (regulations allowing) will be able to operate more safely in tighter and more varied spaces.

Humanoid Robot Announcement 

In addition to announcing its new drone services, Amazon has also announced that it will be testing Agility’s bipedal robot ‘Digit’ (a humanoid robot with arms, legs, and a head) in its warehouse facilities. This marks a substantial change from its many wheeled and robot-arm style robots. Amazon already has a staggering 750,000 autonomous mobile robots (AMRs) deployed across the company’s warehouse network, but a walking humanoid design is a first. It is thought that humanoid-style robots will be well suited to workspaces built for humans (shelves and stairs), and that it could have wider scope than just being used for parcel-picking, thereby expanding future possibilities.

What Does This Mean For Your Business? 

Amazon’s wealth, power, scale, and scope as a business has allowed (and perhaps required) it to experiment more with automation that improves both its productivity and efficiency (i.e. robots) and its delivery service (the drones). In addition to improving these aspects of its business, its drones and robots have been a way for Amazon to put more pressure on the competition, open up new future opportunities, offer more choice to customers (opt-in drone deliveries), learn and build alliances and partnerships, move further towards meeting its green targets (zero emission technology), and continue to grow and expand.

In the UK, parcel delivery drones flying overhead would be a new and novel development but would offer potential opportunities for businesses trying to offer customers speedy (at least same-day), secure deliveries even to difficult-to-reach locations at a time when our roads are often congested, particularly in urban areas (if the price were right).

There are regulatory hurdles to overcome, nevertheless Amazon has made the effort to create a safer and more suitable drone to meet specifications and match environmental conditions. The advantages of drones (speed, directness, cleanliness) could be appreciated and used as way to add value and provide a competitive edge to all kinds of businesses and organisations in the UK that need to deliver goods and other items very quickly.

Tech-Trivia : Did You Know? This Week in Tech-History …

28 Years Ago : eBay (& Amazon by Comparison)

Whilst eBay’s market cap is dwarfed by that of Amazon (i.e. circa 24 billion dollars compared to circa 1.4 trillion dollars), it’s easy to forget eBay helped shape online purchasing too.

Before it was rebranded as eBay in 1997, the site was originally called AuctionWeb. Founded by Pierre Omidyar in 1995, it was an experiment to create an online venue for person-to-person auctions and lacked any heavy investment. In fact, the hosting company were just charging thirty dollars per month to for the entire website when he started up, until they said they’d no longer host it for that price due to the growth in traffic, thereby forcing him to monetise his website via his sellers, which worked.

With his degree in computer science behind him and having worked in a subsidiary company of Apple, he was also working on various other web projects. He’d also co-founded another company called Ink Development, a company initially focused on developing software for pen-based computing. The company transformed its direction and became an e-commerce platform named eShop, which was later acquired by Microsoft in 1996.

In short, Pierre was the right person in the right place at the right time. And so was Elon Musk (more on him later).

The Unexpected First Listing

The first item ever listed on AuctionWeb was a laser pointer. To be more precise, it was a broken laser pointer. This wasn’t a mistake or an oversight. Omidyar had bought it for his own use but found out it was faulty. Rather than discarding it, he decided it would make an interesting first listing on his experimental auction site. He listed it clearly mentioning it was non-functional. To his astonishment, the laser pointer garnered bids and finally sold for $14.83.

Intrigued by someone paying for a known broken item, Pierre out to the buyer who simply responded that he was a collector of broken laser pointers. This quirky initial transaction showed the potential of a vast, unpredictable, and diverse online marketplace.

The Beanie Baby Phenomenon

While the broken laser pointer was AuctionWeb’s first sale, it was the Beanie Baby craze in the mid-90s that truly skyrocketed the platform’s popularity. Beanie Babies, those small plush animals filled with plastic pellets, became a massive collector’s item. AuctionWeb became a primary marketplace for these avid collectors, providing them a platform to buy, sell, and trade these toys.

The Beanie Baby phenomenon showcased the strength of the platform in bringing together niche audiences globally and the success also signalled the beginning of a new era where the average person could become an entrepreneur from the comfort of their own home.

From AuctionWeb to eBay

Seeing the growing potential, Omidyar soon renamed AuctionWeb to “eBay,” which was short for Echo Bay, the name of Omidyar’s consulting firm. The rest is history! eBay went public on September 24, 1998.

On its first day of trading, the stock’s price of $53.50 soared well past the initial target of $18, emphasising the optimism investors held during the dot-com boom. Unlike many that fell by the wayside, eBay is now a business that operates in over 30 countries with a market cap peaking at 80.6 billion dollars.

Amazon and eBay – Different Approaches.

While eBay and Amazon both started as online marketplaces in the 1990s, they evolved with different business models and strategies that have influenced their trajectories. eBay started off as an online auction place, although plenty of people and businesses sell via their ‘Buy Now’ function as an online shop.

There are many possibilities as to why eBay hasn’t reached the same magnitude as Amazon and here are a few :

  1. Business Model: eBay began as a peer-to-peer auction site, allowing individual sellers and buyers to negotiate prices. This gave eBay a unique identity but also meant slower and less predictable transactions. Amazon, on the other hand, started as a book retailer and then expanded its product range, focusing on selling new products at fixed prices.
  2. Fulfilment and Logistics: Amazon invested heavily in fulfilment-centres and logistics, creating a vast and efficient infrastructure for storage, packing, and shipping. This allowed them to ensure rapid delivery, leading to services like Amazon Prime. eBay, on the other hand, relies on individual sellers to handle shipping and logistics, which can be more variable in terms of speed and reliability.
  3. Private Label & Product Expansion: Amazon developed its own private-label products and expanded into diverse categories. They also encouraged third-party sellers to use their platform, ensuring a vast product range.
  4. Ecosystem Development: Amazon diversified its business areas, venturing into hardware (Kindle, Echo), streaming (Amazon Prime Video), cloud services (AWS), and more. This diversification created multiple revenue streams and bolstered its market presence.
  5. Trust and Reliability: Amazon’s emphasis on customer service and consistent delivery times built significant trust with customers. While eBay has made efforts to ensure product authenticity and seller reliability, the peer-to-peer model sometimes leads to inconsistencies in product quality and delivery.
  6. Global Expansion Strategy: Both companies pursued international expansion, but Amazon’s aggressive strategy of setting up localized versions of its site, fulfilment centres, and tailored services for different countries gave it a strong global footprint.
  7. Subscription Model: Amazon Prime, a subscription-based service, not only offers faster delivery but also includes streaming, exclusive deals, and other perks. This has fostered customer loyalty and increased purchase frequency.
  8. Feedback System: While eBay’s feedback system was innovative and built trust in the early days, some argue that it’s become less effective over time due to potential biases and reluctance from buyers and sellers to leave negative feedback.
  9. Acquisitions and Divestitures: While both companies made acquisitions, their strategies differed. Amazon’s acquisitions like Zappos, Whole Foods, and Twitch were integrated into its ecosystem. eBay, on the other hand, made some large acquisitions, such as Skype (see below), which were later divested as they didn’t align with eBay’s core focus.

What can be seen is that eBay seems to have plateaued insofar as the gross merchandise volume (GMV) (i.e. the total amount of ‘stuff’ sold via the platform) is concerned whereas Amazon’s GMV is steadily rising and so is the share of that GMV being sold by third party sellers (rather than Amazon directly) so doubtless they’re eating some of eBay’s lunch.

Perhaps the different share prices reflect the differing optimism because if there’s one thing that investors like, it’s growth.. One thing that’s clear … both companies did well over the pandemic.

While eBay didn’t reach the same dizzying heights of Amazon, it’s nevertheless a true rags-to-riches success-story that’s worth studying, including a couple of their better-known acquisitions. Even if the acquisitions were later sold, it’s interesting to try and appreciate the thinking behind the strategy and synergy.

Payment Provider : X Marks The Spot

The X Factor Elon Musk’s wealth originated from a critical acquisition made by eBay in 2002. In the late 1990s, Musk co-founded X.com, an online payment company. X.com would later become known as PayPal after a series of developments and a merger.

It was this very company, PayPal, that eBay acquired in 2002 for $1.5 billion in stock. At the time of the acquisition, Musk held 11.7% of PayPal shares, translating to roughly $165 million from the sale. Not too shabby for Mr Musk and it certainly helped springboard his wealth to be in the same league as that of Jeff Bezos from Amazon.

Communications Considerations : Skype

In late 2009, eBay finalized the sale of Skype for an impressive $2.75 billion. This strategic move allowed eBay to refocus on its core e-commerce operations, while the deal also highlighted Skype’s significant growth and potential in the telecommunications sector.

The Future?

Whilst Amazon seems intent on taking over the world by expanding relentlessly into eBay’s territory (and many others), eBay will likely remain a trusted corner-of-the-web for people to buy and sell goods for many years to come.

All of which started 28 years ago (this week), with a good idea and a broken laser-pointer.

Featured Article : Subscription Sales Scrutiny

Following the news that US Federal regulators have sued Amazon, alleging that people have been “tricked” into buying hard-to-cancel Prime memberships, we take a closer look at ‘inertia selling’.

What Happened With Amazon Prime Subscriptions? 

Back at the end of June, the US Federal Trade Commission (FTC) announced that it was taking action against Amazon.com Inc, for “enrolling consumers in Amazon Prime without consent and sabotaging their attempts to cancel”. The FTC, which alleged that Amazon had been involved in this kind of inertia selling for years, went so far to say in its complaint that Amazon had been using “manipulative, coercive, or deceptive user-interface designs” which it describes as “dark patterns,” designed to “trick consumers into enrolling in automatically renewing Prime subscriptions.” 

The FTC Chair Lina M. Khan, said in the complaint: “These manipulative tactics harm consumers and law-abiding businesses alike.” 

Denial From Amazon

Amazon issued a statement in response, denying the TFC’s allegations, saying they were “false on the facts and the law” and that “The truth is that customers love Prime, and by design we make it clear and simple for customers to both sign up for or cancel their Prime membership.” 

Inertia Selling 

‘Inertia selling’ is a controversial sales technique which usually applies to a company sending unsolicited goods or services (or a subscription for services) to individuals with the expectation that they will buy or continue to buy the items. The idea is that the inertia of the consumer (i.e., the natural tendency of consumers to avoid taking action and stick with the default option) will mean that they either keep and pay for the item or to continue a subscription service, often without fully understanding the terms and conditions involved.

As the name suggests, this approach relies on the consumer’s inertia to drive sales, rather than obtaining explicit consent or agreement for the transaction.

Making Things Too Difficult 

In the recent complaint against Amazon by the FTC, it was alleged that making the option to purchase items on Amazon without subscribing to Prime was difficult for consumers to locate by not being clear in the transaction that in choosing that option consumers were also agreeing to join Prime for a recurring subscription. Also, the FTC alleged that when consumers tried to cancel Prime membership, they were faced with multiple steps, first having to locate the cancellation flow, and then being redirected to multiple pages that presented several offers to continue the subscription at a discounted price, turn off the auto-renew feature, or to decide not to cancel. The FTC said that only after clicking through these pages could consumers finally cancel the service. In other words, its alleged that consumers may have been tricked into consent in the first place and then the sheer complication of cancellation made consumers give up and opt for keeping the service.

Is It Illegal? 

Although these “dark patterns” (as described by the FTC) sound as though they must be illegal, it’s not quite as clear cut. Inertia selling is generally considered to be an unfair commercial practice under UK law, and it can be illegal. For example, UK consumer protection legislation like the Consumer Protection from Unfair Trading Regulations 2008, is designed to prevent unfair or deceptive practices, including inertia selling. These laws require that businesses provide consumers with clear, truthful information so they can make informed choices.

If a consumer in the UK receives unsolicited goods or services, they generally are under no legal obligation to pay for them. The law typically considers these unsolicited items to be gifts, and the consumer may not be required to return them. Also, companies must not demand payment for items that were not explicitly ordered as doing so could be considered an unfair commercial practice and may result in legal consequences.

However, for the consumer, it’s essential to carefully read the terms and conditions of any contract or agreement entered into, as there can be instances where the business has a legal basis for providing additional goods or services and charging for them. It appears, therefore, these situations can sometimes be nuanced.

Change Is Coming 

Although some areas of these practices may be nuanced, in April in the UK, the government announced that a new Bill will give the Competition and Markets Authority (CMA) new powers to clamp down on “subscription traps.” The changes will also require businesses to give consumers clearer information before they enter a subscription contract, issue a reminder when (for example) a free trial or low-cost introductory offer is coming to an end, and a reminder before a contract auto-renews onto a new term, and give consumers a straightforward way to exit a subscription contract.

In March this year, in the US, the FTC proposed a “click to cancel” provision requiring sellers to make it as easy for consumers to cancel their enrolment as it was to sign up. This change looks likely to help tackle hard-to-stop free trials, and auto-renewals (subscription traps).

In the EU, The CPC Network (coordinated by the European Commission) recently asked Mastercard, VISA and American Express to introduce a series of changes in their rules to ensure that traders provide clear information to consumers on recurrent payments before they enter into a subscription.

Others 

Inertia selling is not new but arguably, with the kind of subscription economy we now have, it may be easier for companies to use those practices. It’s worth noting that it’s not just Amazon that allegations of inertia selling of subscriptions have been made about. Other examples (and there are many more than these) include:

– Way back in 2013, when Adobe transitioned to its Creative Cloud subscription service, it received criticism about its subscription-only model and its cancellation policies.

– In 2015, Sky faced an Ofcom investigation for allegedly making it difficult for customers to cancel, e.g. cancellation requests not being “verified” without a call by the customer.

– In 2019, a Guardian newspaper report highlighted many companies which let customers sign up online but required a phone call to leave, e.g. Weight Watchers (WW), Ocado Smart Pass, British Gas Homecare, Which?, and others. The point was that requiring cancellation via phone call could be something that consumers forget.

– In 2020, the CMA took action against Roland for not making it sufficiently easy for online customers to cancel their digital piano rental agreements.

– Three, Vodafone, and EE all came under scrutiny from the CMA in the UK for the terms of their mobile phone contracts, some of which allegedly made it difficult for customers to switch providers or cancel their services.

– As in the US, gym chains in the UK have faced scrutiny for their cancellation policies. The CMA has now taken steps to ensure that gyms are transparent about their terms and conditions.

– In 2021, while the primary concerns with Viagogo (the multinational ticket exchange and ticket resale brand) surrounded ticket reselling, some consumers also complained about subscriptions that were difficult to cancel. This led to investigations and enforcement action by the CMA.

– Last year, as part of its investigation into the online console video gaming sector, the CMA identified concerns about some features of Microsoft’s auto-renewing subscriptions. For example, the CMA was particularly concerned about whether it was clear upfront that contracts would automatically renew, how easy it was to turn off automatic renewal, and whether people may not have realised they were still paying for services they no longer used.

What Does This Mean For Your Business? 

As we have moved more into becoming a subscription society, regulating all the practices has become more complicated. One of the chief concerns is how to protect consumers from business practices that essentially make the barriers to entry of a subscription contact incredibly low (or virtually invisible) and the barriers to exit extremely high through means such as excessive complication – two key characteristics of inertia selling.

In the US, UK, and EU matters such as hard-to-stop free trials, auto-renewals (subscription traps), and making consumers work hard to cancel are all being addressed with new proposed laws and new powers being given to regulators. For businesses offering subscriptions and wanting to avoid penalties, this will mean a review of their subscription process paying particular attention to clarity and options in sign-up and providing an easy way to cancel (with enough reminders along the way). Although Amazon is the latest to come under the regulatory spotlight it is by no means the only company to have been warned or had action taken against it by regulators over how subscriptions are sold, handled, renewed, or cancelled.

Although more legislation is in the pipeline and scrutiny more intense than ever, there is still some way to go in successfully tackling the many practices and nuances related to inertia selling. In the meantime, in the UK, customers who believe they have been the victim of inertia selling can report the practice to the CMA or their local Trading Standards office for further investigation.

Tech News : Seven Safeguarding SamurAI?

Following warnings about threats posed by the rapid growth of AI, the US White House has reported that seven leading AI companies have committed to developing safeguards.

Voluntary Commitments Made 

A recent White House fact sheet has highlighted how, in a bid to manage the risks posed by Artificial Intelligence (AI) and to protect Americans’ rights and safety, President Biden met with and secured voluntary commitments from seven leading AI companies “to help move toward safe, secure, and transparent development of AI technology”. 

The companies who have made the voluntary commitments are Amazon, Anthropic, Google, Inflection, Meta, Microsoft, and OpenAI.

What Commitments? 

In order to improve safety, security, and trust, and to help develop responsible AI, the voluntary commitments from the companies are:

Ensuring Products are Safe Before Introducing Them to the Public

– Internal and external security testing of their AI systems before their release, carried out in part by independent experts, to guard against AI risks like biosecurity and cybersecurity.

– Sharing information across the industry and with governments, civil society, and academia on managing AI risks, e.g. best practices for safety, information on attempts to circumvent safeguards, and technical collaboration.

Building Systems that Put Security First 

– Investing in cybersecurity and insider threat safeguards to protect proprietary and unreleased model weights (regarded as the most essential part of an AI system). The model weights will be released only when intended and when security risks are considered.

– Facilitating third-party discovery and reporting of vulnerabilities in their AI systems, e.g. putting a robust reporting mechanism in place to enable vulnerabilities to be found and fixed quickly.

Earning the Public’s Trust 

– Developing robust technical mechanisms to ensure that users know when content is AI generated, such as a watermarking system, thereby enabling creativity AI while reducing the dangers of fraud and deception.

– Publicly reporting their AI systems’ capabilities, limitations, and areas of appropriate and inappropriate use, covering both security risks and societal risks (e.g. the effects on fairness and bias).

– Prioritising research on the societal risks that AI systems can pose, including those on avoiding harmful bias and discrimination, and protecting privacy.

– Developing and deploying advanced AI systems to help address society’s greatest challenges, e.g. cancer prevention, mitigating climate change, thereby (hopefully) contributing to the prosperity, equality, and security of all.

To Be Able To Spot AI-Generated Content Easily 

One of the key aspects of more obvious issues of risk associated with AI is the fact that people need to be able to definitively tell the difference between real content and AI generated content. This could help mitigate the risk of people falling victim to fraud and scams involving deepfakes or believing misinformation and disinformation spread using AI deepfakes which could have wider political and societal consequences.

One example of how this may be achieved, with the help of the AI companies, is the use of watermarks. This refers to embedding a digital marking in images and videos which is not visible to the human eye but can be read by certain software and algorithms and give information about whether it’s been produced by AI. Watermarks could help in tackling all kinds of issues including passing-off, plagiarism, stopping the spread of false information, tackling cybercrime (scams and fraud), and more.

What Does This Mean For Your Business? 

Although AI is a useful business tool, the rapid growth-rate of AI has outstripped the pace of regulation. This has led to fears about the risks of AI when used to deceive, spread falsehoods, and commit crime (scams and fraud) as well as the bigger threats such as political manipulation, societal destabilisation, and even the existential threat to humanity. This, in-turn, has led to the first stage action. Governments, particularly, need to feel that they can get the lid partially back on the “genie’s bottle” so that they can at least ensure safeguards are built-in early-on to mitigate risks and threats.

The Biden administration getting at least some wide-ranging voluntary commitments from the Big AI companies is, therefore, a start. Given that many of signatories to the open letter calling for 6-month moratorium on systems more powerful that GPT-4 were engineers from those big tech companies, it’s also a sign that more action may not be too far behind. Ideas like watermarking look a likely option and no doubt there’ll be more ideas.

AI is transforming businesses in a positive way although many also fear how the automation it offers could result in big job losses, thereby affecting economies. This early stage is, therefore, the best time to make a real start in building in the right controls and regulations that allow the best aspects of AI to flourish and keep the negative aspects in check, but this complex subject clearly has a long way to run.