U.S. blocks Amazon efforts to stop shareholder votes on facial recognition
reuters.com
reuters.com
Shareholders that meet pretty minimal criteria are eligible to include a proposal on the proxy statement and to be voted on at a company's annual meeting. As part of this, the shareholder or a representative must be present at the annual meeting and gets a few minutes to stand up and present their proposal.
In order to avoid this becoming a platform for every special interest group to gain an audience for their pet cause, the SEC has a list of criteria that proposals must meet. If the company believes that the proposal does not meet these criteria, they can petition the SEC for an exclusion, which if granted, lets the company ignore the proposal: https://www.law.cornell.edu/cfr/text/17/240.14a-8
Most shareholder proposals have no hope of passing and are a tool to raise awareness and get publicity for an issue. My guess is that this proposal has zero chance of passing, but that Amazon both wanted to exclude the proposal 1) because they want to exclude all shareholder proposals as a matter of course and 2) that they do not want to give this issue publicity.
Well, that worked quite well.
I'd think that, as a rule, you can't rely on rejection as a mechanism for preventing something from getting publicity. Someone savvy can use that as a fuel for publicity. You'd have to destroy both the message and the messenger.. and also any onlookers.
Another tool is to go into politics and change the law, that forbids surveillance technology to be sold to governments. Which then influences the future of Amazon.
And a third way, do not work for companies, that you do not see a future in. Either by your own moral standards or ideas or simply because of long term outcome.
But maybe that is old fashioned, non collective me. :-)
Even though this amazon resolution may make the proxy ballot, most shareholders don't vote. Check out this online petition that makes it easier: https://www.yourstake.org/ask/amazoncom-inc-facial-recogniti...
Amazon then took the unusual step of asking for a reconsideration of that decision, but was again rebuffed in a April 3 letter from the agency.
I think if you feel the need to ask again, because you really don't want to let them vote on it, that works against the idea that it's insignificant to your business...
We don’t know if Amazon is honestly arguing from that position, or being dishonest as you imply.
It's a catch 22
Let’s assume someone scheduled a vote to force Bezos to get a hair transplant or quit his position. Could we agree then that this would be insignificant to Amazons business? Could we agree that it would still be insignificant even if Amazon fought to drop that vote? I’d think so.
Stopping Amazon's poorly implemented facial recognition system won't stop the N start-ups in the space who are doing it better. It won't stop the Chinese government, which is already using much more advanced versions of this technology to police a significant portion of the human population.
Let's say you do manage to stop Amazon from offering this service. Do you think the problem is resolved? Will police departments in the US stop trying to use this technology or will they likely source it from somewhere else with less publicity?
Our world is the sum of countless factors. Giving up issues large and small will on net make the world worse to larger or smaller degrees.
The process of determining whether a majority of shareholders have an opinion about anything is costly and tedious. That said, this doesn't appear to be a meaningless question from a shareholder perspective.
If people felt that strongly about a CEO's haircut, maybe it should be up for debate too, but it's a terrible comparison since it wouldn't affect society at large the way that large-scale surveillance does.
A better comparison would be that the shareholders wanted it so that Beezos had to wear a well designed Amazon logo branded tie during business vs. whatever he wears. That example is far less invasive of personal rights and insignificant to the business operations. Most would agree it would be silly to waste time and effort worrying about Beezo's work tie design...
Or, keeping in line with the original example, that Beezos had to wear an Amazon hat/cap during business work.
Suppose, do to some new efficiencies, Bezos proposes converting a few warehouses to detention centers. It would be an insignificant part of Amazon business. This project is potentially very politically costly to an apolitical company. Even though it's insignificant the shareholders want a vote on it.
No I don't think we could agree here, because if it was significant to the company, then the stock holders would demand the hair change. And if it wasnt, then shareholders wouldn't, See, it's a catch-22. ;P
Having a national government recognize you as a market-dominating behemoth? As the de facto market leader? If you believe that breakup isn't possible, that government recognition could be a marketing plus.
Only some juridiction actually have any law to (broadly) that effect. In practice, corporate officers have extremely wide latitude to decide what’s in the long-term interest of the company. That’s why companies can support charities, or not engage in warfare, or innovate in recycling, or taking the lead in privacy, or leave China due to censorship without any legal risk. One can argue that such efforts are in the shareholders‘ interest for PR reasons, but then one has essentially given up the argument, because anything can be framed as an excersize in PR. I have also witnessed countless acts of charity that never became public, such as donating leftover goods or keeping employees in personal crises on the payroll.
The only successful challenge along this line of argumentation I am aware of is Craigslist, and that required the founder to explicitly state their intentions to harm the company for rather esthetic considerations.
A shareholder-above-anything philosophy is also just not good policy. While capitalism has been a stellar success in harnessing selfishness for the common good, that is not evidence to suggest attempts to go beyond-and-above what’s legally required are actively harmful. Capitalism works well because bottom-up decision-making works best. Centrally (top-down) enforcing selfishness is bound to be just as detrimental as Moscow deciding what to plant this spring.
The original case that is usually cited about this "maximize shareholder value at all costs" concept was Dodge v. Ford Motor Co, in which the argument was that Ford was trying to turn the company, at least temporarily, into a non-profit, and avoid giving any profits to shareholders, arguably in order to make the positions of significant minority shareholders (eg, the Dodges) worthless and deprive them of capital to start a competing company. There's a significant difference between maximizing shareholder value at all costs, and intentionally trying to obliterate shareholder value in order to harm the shareholders.
While as an exercise, measuring intention is nearly impossible since determining motive is highly subjective, unless we can read minds (or internal emails/paper trials which are often guarded or intentionally avoided), we can at least look at public evidence and trends that we're aware of.
In today's economy, perceived value reigns supreme over functional and monetary value, and utility takes a back seat. Manipulating perception is highly impactful on most fronts of increasing revenue. Advertising, marketing, branding, the amount of psychology utilized, data mining and tracking (for targeted marketing), etc.--most all of this effort is about manipulating perceived value to consumers by painting an idealized image of a product/service (propaganda)--and it works.
Part of that perceived value manipulation is also painting a picture to the public that your company is "great." I've taken quite a few marketing surveys and you'll find quite a few questions about if you think a company is "good" or "bad." What your opinions are about the company (your perception), very emotionally tied questions.
If you look at historical evidence, you'll see misinformation campaigns everywhere: from the tobacco industry to bottling industries to fossil fuel industries to the lead industries.... all these sort of campaigns have been about shifting public perception in the interest of the business, and therefore, the shareholders. It's not in societies interest (unless you support social darwinism) that we have rampant lung cancer or other cancers caused by lead contact. It's not in the world or societies interest that we pretend global warming isn't an issue when the scientific consensus, the method leading to humanities greatest leaps and discoveries, tells us otherwise.
PR activity exists almost for the sole purpose of keeping the general public and your consumers happy (they also provide product/service information, when it's in their business interest). While not all PR activites are as calculated, most all efforts are to protect and foster growth of a business, and therefore most activity is for the shareholders. If a PR group's activity or business marketing campaign does the opposite and harms revenue, you'll find a lot of those people will lose their jobs. That's quite telling of the motive, at least for me.
The underlying problem is that almost everybody buys stock as an investment, not to take active roles in running companies or make political statements.
am i missing something or is that last line really weirdly phrased?
www.guardian.co.uk/commentisfree/cifamerica/2012/mar/01/shareholder-crusade-prison-rape
https://www.sec.gov/Archives/edgar/data/1070985/000089968112...
Maybe they have dug in for purely emotional reasons now, and need some shareholders to set them straight. Or maybe there even are enough shareholders that value behaving ethically more than money. There’s no law of either governments, physics, or human behavior that prohibits that.
I guess there is a tradition of deference to corporate leadership, especially among institutional investors. But there have been cracks in that consensus, with for example Blackrock (the largest of them) making more noises wrt such issues (trade in weapons, climate change, etc).
It’s also ignoring the generally silent shareholders who want Amazon to develop such technologies, who want them to have government contracts, etc. Or who view Amazon managing such a service in the open and where we can discuss it as superior to someone like Palantir doing the same, and don’t believe it’s possible to restrict all companies from developing that technology — particularly those less open to public pressure or oversight.
You’re assuming a vocal cohort of anti-American, uninformed activists represent the majority of Amazon shares — and I don’t think they do.
Frankly, if BlackRock drops weapons trade, I’ll drop my iShares: that would be them failing to represent me as my fiduciary.
Americans do not care about privacy or security in any mass sense. They will let the country fall to a total surveillance state with without even batting an eye, put wiretaps right in their homes so they can set timers for their lasanga, all for 'convenience'. Amazon's 'bad PR' doesn't effect them in the slightest and Americans have already forgotten about their past issues with facial recognition, except a small percentage of techies that visit sites like this, not any majority of society.
"FR lead developer here of a real product in this space, likely to be acquired over the next few years, possibly by Amazon."
There's no telling what small thing today will look like in a few years down the road.