Business News Amazon.com | Page 9

Amazon.com

9

Microsoft Windows Server and Microsoft SQL Server. Amazon Connect enables authors to post remarks on their book pages to customers. WebStore allows businesses to create custom e-commerce websites using Amazon technology. Sellers pay a commission of 7 percent, including credit-card processing fees and fraud protection, and a subscription fee of $59.95/month for an unlimited number of webstores and listings.



Controversies



Differential pricing

In September 2000, price discrimination was found on Amazon.com. Amazon offered to sell a buyer a DVD for one price, but after the buyer deleted cookies that identified him as a regular Amazon customer, he was offered the same DVD for a substantially lower price. Jeffrey P. Bezos subsequently apologized for the differential pricing and vowed that Amazon "never will test prices based on customer demographics". The company said the difference was the result of a random price test and offered to refund customers who paid the higher prices. Amazon had also experimented with random price tests in 2000 as customers comparing prices on a "bargain-hunter" Web site discovered that Amazon was randomly offering the Diamond Rio MP3 player for substantially less than its regular price.



Competition

The company has been controversial for its alleged use of patents as a competitive hindrance. The "1-click patent" is perhaps the best-known example of this.

Amazon's use of the one-click patent against competitor Barnes and Noble's website led the Free Software Foundation to announce a boycott of Amazon in December 1999. The boycott was discontinued in September 2002. On February 22, 2000, the company was granted a patent covering an Internet-based customer referral system, or what is commonly called an "affiliate program". Reaction was swift and negative. Industry leaders Tim O'Reilly and Charlie Jackson spoke out against the patent, and O'Reilly published an open letter to Bezos protesting the 1-click patent and the affiliate program patent, and petitioning him to "avoid any attempts to limit the further development of Internet commerce". O'Reilly collected 10,000 signatures with this petition. Bezos responded with his own open letter. The protest ended with O'Reilly and Bezos visiting Washington, D.C. to lobby for patent reform. On February 25, 2003, the company was granted a patent titled "Method and system for conducting a discussion relating to an item on Internet discussion boards". On May 12, 2006, the USPTO ordered a re-examination of the "One-Click" patent, based on a request filed by Peter Calveley, who cited as prior art an earlier e-commerce patent and the Digicash electronic cash system.

Amazon has a Canadian site in both English and French, but until a ruling in March 2010, was prevented from operating any headquarters, servers, fulfillment centers or call centers in Canada by that country's legal restrictions on foreign-owned booksellers. Instead, Amazon's Canadian site originates in the United States, and Amazon has an agreement with Canada Post to handle