Amazon Patents Price Comparison Blocking Over WiFi

business_ethics_highlights_2Should a bricks-and-mortar retailer be able to interfere with your ability to comparison shop over a wireless network? Hot on the heels of news of Amazon’s impending Whole Foods acquisition, the New York Post reports Amazon has secured a patent on technology that would permit the company to do just that. From an ethical standpoint, this is interesting to think about within the framework of Joseph Heath’s market-failures approach (MFA) to business ethics.

According to the MFA, business firms are duty-bound to avoid taking advantage of unregulated market failures. Consumer access to information about competitor pricing enhances the efficiency of markets, which efficiency Heath sees as the underlying justification for competitive market economies. Therefore, at first blush, it would seem that interfering with potential customers’ access to competitive pricing information and seeking to profit from the resulting lack of information would create the very sort of inefficiency that the MFA says firms are duty-bound not to take advantage of.

However, things are not so straightforward. As the linked article seems to indicate, the patent and technology are limited to a retailer-provided WiFi network. This is important for two reasons:

1) With respect to comparing competitors’ prices, potential customers are left no worse off than they would be if the retailer provided no WiFi network at all. Unless all bricks-and-mortar retailers are duty-bound to offer shoppers free and unencumbered WiFi networks, it’s not clear that blocking access to competitive-pricing information shoppers couldn’t have in the absence of a retailer-provided WiFi network is wrongful.

2) The technology presumably leaves a smartphone’s cellular-data network untouched. Consequently, the practical effect of the technology is probably limited to those who lack smartphones, but use WiFi-only tablets or devices like the iPod Touch to access the internet while shopping.

Whether or not Amazon’s patented technology is unethical, its heavy-handedness and the inconvenience it imposes (i.e., turning off your phone’s WiFi so that you can access the sought-after information over you cellular-data network) likely leaves a bad taste in the prospective customer’s mouth—not the effect the likely new owner of Whole Foods should be going for. >>>

LINK: Amazon’s latest patent will enrage consumers (by Post Staff Report for New York Post)

Amazon … was recently granted a patent that could be used to track customers’ web surfing in stores and interfere with where they go online.

The patent … details a system that would prevent customers from comparing prices in Amazon stores by watching any online activity conducted over its wi-fi network, detecting any information of interest and responding by sending the shopper to a completely different web page — or even blocking internet use altogether.

The patent clearly lays out how Amazon could employ the technology, saying the e-commerce giant could interfere in “the event that requested content is determined to be associated with or potentially associated with a competitor or an item of interest.” If Amazon doesn’t like what it sees, “information may be blocked” or the customer “may be redirected to other content,” such as an Amazon webpage.

The control Amazon would have goes beyond your web browser, extending to your entire phone. In one example, Amazon says it could send you a text, push notification or email in response to what you’re looking at online.

Additionally, the technology allows Amazon to track your location in the store, potentially guiding how Amazon would respond to your browsing.

What do you think?

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