Reclaim Democracy!

Citizen Lawmaking Under Assault

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Many GOP State Legislators Are Sabotaging the Ballot Initiative Process

By Jeff Milchen
February 19, 2023

American voters often waver from one election to the next between electing majorities of Republicans or Democrats to Congress or their state legislatures, yet the results of ballot initiatives remain remarkably predictable. Last November’s outcomes results again showed a majority of voters — even those in deep-red states — favoring progressive policies when voting on individual issues rather than voicing their party identity.

But instead of accepting those outcomes as guidance to better represent their constituents, many Republican legislatures are trying to obstruct or neuter citizen lawmaking.

Last year, pro-abortion-rights voters won in all six states with questions on the ballot (the most ever on the topic), including the GOP strongholds of Kansas, Kentucky, and Montana. That success has advocates exploring ballot measures to amend state constitutions in a dozen or more states.

In other initiatives, voters abolished involuntary servitude as a punishment (Alabama, Oregon, Tennessee, and Vermont) and raised minimum wages (Nebraska, Nevada, and the District of Columbia). South Dakota became the seventh state (and the sixth under GOP control) to expand Medicaid via citizen initiative. And Michigan voters embedded reproductive rights and voter protection principles in the state constitution.

Two Republican officials on Michigan’s Board of State Canvassers initially blocked both of those initiatives from the ballot. Though supporters gathered a record 735,000 petition signatures for the reproductive-rights measure, the two officials claimed that inadequate spacing in the fine print of ballot petitions was disqualifying and voted to disqualify the voting rights initiative on another technicality. The initiatives’ backers filed lawsuits, and thankfully the Michigan Supreme Court ruled in both cases to prevent the sabotage and enable citizens to vote on the issues. 

Twenty-four states enable proactive initiatives while two additional states enable citizens to nullify laws, but not enact new ones. Around the turn of the century, progressive initiatives began outnumbering conservative ones, and 2022 yielded victories on a wide range of progressive causes. But Republican politicians increasingly deem this an unacceptable intrusion into their powers and push bills to undermine ballot initiatives on three different fronts: erecting barriers to initiatives reaching the ballot, making passage more difficult and corrupting voters’ intent post-passage. 

Last year, Ballotpedia counted a record 232 state bills impacting ballot measure processes, of which 23 passed. The Ballot Initiative Strategy Center (BISC), a nonprofit advocate for citizen lawmaking, listed 140 of those bills as impeding citizen initiatives. And the attacks are unrelenting: Missouri Republicans introduced a dozen such bills this January alone.

Ohio Republicans, meanwhile, proposed legislation to radically increase signature-gathering costs and require a 60 percent supermajority vote for constitutional initiatives. The author of the latter bill openly declared his intent: to block a forthcoming citizen initiative expanding reproductive choice. Also motivating the attack is an initiative to create an independent redistricting commission, which would neutralize gerrymanders that effectively ensure a Republican majority in the legislature. (In an unusual plot twist, a leading advocate for the initiative is Maureen O’Connor, a Republican and former Ohio Supreme Court chief justice.)

Roadblocks to citizen lawmaking may be making their intended impacts, as just 30 initiatives made state ballots in 2022 — the fewest this century. In Utah, for example, an out-of-state group with anonymous funding called the Foundation for Government Accountability helped pass a 2021 law banning paying signature gatherers per valid signature, which is currently standard practice. By nixing a key incentive for workers to gather more signatures than they would if paid only an hourly wage, the law will hike both the cost and duration of campaigns to qualify a ballot measure. “Qualification challenges, courts blocking measures, and onerous restrictions” all contributed to the decrease, says Chris Figueredo, executive director of BISC.

total number of annual state citizen initiatives 201-2022
Graphic courtesy of Ballotpedia

Unlike direct voter-disenfranchisement tactics, the escalating assaults on direct democracy have generated few headlines. But regardless of our policy preferences, ballot initiatives provide a vital safety valve, giving citizens a tool to bypass unresponsive legislatures that ignore or defy their constituents. This corrective power is especially vital today, as gerrymandering makes dislodging officeholders in safe seats nearly impossible.

Despite the preponderance of progressive ballot victories, direct democracy is a nonpartisan, pro-democracy tool popular with citizens across the political spectrum. Two-thirds of the 24 states with proactive citizen initiatives typically have had trifecta Republican control of state government. In Colorado, which flipped from GOP control of all branches of government in 2004 to a Democratic trifecta today, 65 percent of voters supported a 2022 initiative to cut state income taxes. And when Californians voted for President Joe Biden by a 29-point margin in 2020, conservative positions prevailed on several ballot questions. If more state legislatures flip to Democrats, conservative initiatives undoubtedly will serve as a check on their power as well. 

The election results of 2022 demonstrated that citizen initiatives unite voters with differing party loyalties to advance common interests, often addressing issues where legislators decline to act. The threats to citizen lawmaking should be resisted in favor of protecting one key avenue to ensure frustrated voters a constructive way to engage and progress toward inclusive democracy.

Jeff Milchen is the founder and a board member of Reclaim Democracy! Follow him on Twitter: @JMilchen. A shorter version of this commentary was first published by Governing.

See also: Tactics GOP Legislators Are Using to Undermine Direct Democracy

How the Senate Filibuster Enables Corporate Rule

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By Jeff Milchen
April, 2022

“Follow the money” is a fundamental principle for political reporters. It means competent journalists look at who funds politicians, provides that information in relevant stories, and examines how politicians’ votes and statements compare to the agenda of their funders. On that criterion, nearly every news report on the recent filibuster of Senate voting rights legislation failed. 

It’s not like the trail is camouflaged. The U.S. Chamber of Commerce, perhaps the most powerful lobbying group in America, promoted it’s agenda publicly, decrying the the threat of a responsive democracy and touting the filibuster to prevent it. The Chamber lavished praise and cash upon Krysten Sinema and Joe Manchin, the two Democratic Senators who saved corporate America from the threat of majority rule. Without the filibuster, proposals broadly popular with the public, but anathema to many corporations — like a $15 minimum hourly wage, bans on corporate union-busting, and stronger pollution limits — could likely become law.

Finally, the Chamber warned all Senators that a vote to enable democracy will be punished on its scorecard, which tells who’s been naughty or nice in the eyes of multinational corporations.

When Manchin and Sinema professed their deep concern for bipartisanship or tradition to justify blocking voting rights protections, some reporters showed appropriate skepticism, since both Senators voted to suspend the filibuster just weeks earlier to raise the national debt ceiling. Yet reports on the filibuster vote from the largest media outlets neglected corporate influence entirely. The only reporting I found connecting Manchin and Sinema’s filibuster support to funding by fossil fuel interests, restaurant chains, and many other corporations was The Lever, a reader-supported investigative journalism startup. 

To be clear, the Constitution’s wealthy authors intended the Senate to protect powerful people from rapid populist pressure that could more easily influence the House of Representatives. Yet they couldn’t anticipate the later invention of filibusters turning their speed bump into a full roadblock. Nor could the founders foresee population growth that now gives Californians about 1/68th as much Senate representation as residents of Wyoming, a state created a century after our Constitution.

Meanwhile, the people of Washington, D.C. and Puerto Rico, who outnumber the residents of several states, have no voting representation in Congress whatsoever. The power imbalances are magnified further by the whiteness and patriarchy prevalent in over-represented Plains and Northern Rockies states.

While many corporations offer feel-good commercials promoting multiculturalism and equality, their political arms (like the Chamber) and political investments perpetuate the dominance of wealth over our elections and the public interest. Those of us who value democracy must remember the quest for voting rights and equality is inseparable from the imperative to revoke the power of corporations and money over our elections and government.

Many of us learned a sterilized history in which the United States progressed steadily from a white, wealthy, male electorate toward inclusive democracy. But in the entire history of our nation, just 11 Black people and 58 women have served as Senators. Hard-fought citizen victories have taken decades and are interspersed with setbacks — like today — at the hands of the U.S. Supreme Court. 

Long-term progress has come through rallying with new energy after each defeat to push further toward equality with clear proactive agendas. The recent Senate defeats for democracy should fuel momentum for tackling the problem at its roots by organizing toward a Right to Vote Amendment in our Constitution that transforms voting from a privilege to a right. have our votes count equally.  

Jeff Milchen is a Reclaim Democracy! board member in Bozeman, MT. Share your views with him or follow on Twitter at @JMilchen

Cartoon displayed on social media is by Nick Anderson.

USPS Purchasing Gas Guzzlers Would Be a Disaster for the Climate and Customers

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By Jeff Milchen
January 13, 2022

Transportation generates  29 percent of all U.S. greenhouse gas emissions, meaning any serious work to mitigate harm from global warming requires changing how we move people and goods. And while our personal transportation choices matter, collective action to drive significant emission reductions at large institutions is essential.

Owning more than 200,000 vehicles, of which 70 percent are 25–32 years old, the U.S. Postal Service will make a global impact—for better or worse—with its choices of fleet vehicles. Local delivery trucks typically travel less than 100 miles daily at lower speeds, making them perfect candidates for electric engines. The situation creates a once-in-a-generation opportunity to increase efficiency, reduce pollution, and advance economies of scale for electric vehicle production.

Just one problem: Postmaster General Louis DeJoy awarded a decade-long, multi-billion-dollar contract for those replacements to Oshkosh Defense Corporation. If that sounds to you like a company focused on making armored war machines rather than street vehicles, you’re correct. The plan calls for 90 percent of new trucks to run on gas and travel about nine miles per gallon, barely improving their predecessors.

While President Biden has called for all federal vehicle purchases to be emission-free by 2035, he lacks the authority to control (or fire) the postmaster directly. Biden has appointed most of the USPS Board of Governors, but his selections seem likely to give DeJoy full autonomy. DeJoy gained notoriety by taking hundreds of mail sorting machines out of service just before the 2020 elections and slowed mail service dramatically. 

In a February 6 statement, DeJoy cited budget deficits he inherited as the obstacle to buying more costly electric vehicles. Though USPS is a public service, it is expected to fund itself without direct federal assistance. Yet Congress imposes onerous requirements on USPS to pre-fund employee retirement benefits far into the future, contributing to its deficit. This week, a bill to relieve that burden is moving through Congress, potentially saving USPS $50 billion over the next decade.

If the bill passes, the opportunity should not be wasted. While the gas-powered trucks are cheaper to purchase initially, lower operating and maintenance costs for electric trucks start saving money immediately, and full fleet electrification could save $4.3 billion (PDF) over a generation of vehicles.

Notably, Biden’s Build Back Better bill, defeated via Senate filibuster, would have fully funded a USPS transition to electric vehicles. 

Upon learning of the USPS procurement plan, the Environmental Protection Agency wrote to USPS urging reconsideration. It claims the decision was based on faulty analysis, including absurd assumptions about battery and gasoline prices. The letter also accused the USPS of illegally awarding $482 million to Oshkosh Inc. before an environmental review.

The dispute also exposed a dangerous EPA rules loophole that incentivizes bigger, more polluting trucks. For example, vehicles classified as light trucks (combined vehicle weight + payload up to 8,500 pounds) must meet significant efficiency requirements from which heavy trucks (exceeding 8,500 pounds) are exempt. In a cynical ploy to evade EPA standards, the Oshkosh /DeJoy agreement calls for vehicles with a combined vehicle weight of 8,501 pounds—nearly double the weight of most current USPS vehicles.

USPS estimates $3.3 billion would cover a complete transition to electric vehicles. For reference, Congress allotted $24 billion more than anyone requested for military spending. Surely we can afford the relatively modest investment to defend against climate calamity the Pentagon cites as a top security threat. 

While we should urge our representatives to enable that crucial step, this conflict should inspire us to look at the procurement choices being made close to home by our schools, local governments, and other institutions we can influence directly. Our individual choices as consumers matter. But only through our actions as citizens can we drive change on the scale our climate crisis demands.

Reclaim Democracy board member Jeff Milchen adapted this commentary from a report he first wrote for UU World.

Voting Rights: We Need Immediate Action AND Long-Term Strategy

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Last updated February 11, 2023

Pro-democracy groups are urging people to support at least three essential bills in Congress:

  • The Freedom to Vote Act (slated for reintroduction by May of 2023)
  • The John Lewis Voting Rights Act
  • The Washington, D.C. Admission Act, which would grant voting rights to D.C. residents by making the District a state (the Supreme Court has shut down every other option). 

Each bill is truly necessary and urgent. We urge you to lobby your Senators for their immediate passage and do all you can to make your voice heard through other channels. Yet we are deeply concerned that the approach of focusing on legislative fixes alone does not capture the imagination of Americans and engage them to the degree we need. So, while we wholeheartedly urge passage of the three bills noted above, we also continue building support for a Right to Vote Amendment for three reasons:

  • We need one, clear, compelling message that overwhelming numbers of Americans can support and convey concisely: every citizen must have a right to vote and have their votes count equally.
  • While bills in Congress may change language, names, and even bill numbers, getting commitments from our legislators to support an affirmative right to vote will help hold them accountable to support all voting rights bills.
  • Crucially, advances made solely through legislation can be undone by Congress and by courts. If a neutral person were to look at our 1965 Voting Rights Act, they would conclude we have strong protections that would make many provisions of current legislation unnecessary. Yet the Supreme Court stripped the Voting Rights Act of meaning in 2013 and has become more anti-democratic in subsequent years. A constitutional Amendment expanding civil rights has never been revoked.

If you have not yet contacted both of your U.S. Senators on these bills, please do so today. Let them know the anti-democratic filibuster cannot be used as an excuse to enable the denial of voting rights. You can always reach any U.S. Senator or Representative’s D.C. office via the Capitol switchboard: 202-224-3121. #NoMoreExcuses 

See the links above to great bill summaries by the Campaign Legal Center and Brennan Center. For more on the Washington, D.C. Admission Act and all current Senate sponsors, see D.C. Statehood Coalition.

Additional Resources

50+ Ways to Disenfranchise and Suppress Voters

Landmarks in Voting History & Law

Key Elements of a Right to Vote Amendment

How Amazon Wins: By Steamrolling Rivals and Partners

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By Dana Mattioli
First published in The Wall Street Journal, Dec. 23, 2020

Jeff Bezos built Amazon.com Inc. from his garage with an underdog’s ambition to take on the establishment. He imbued staff with an obsession to grow fast by grabbing customers using the biggest selection and lowest prices. Today, he has more than 1.1 million employees and a market valuation around $1.6 trillion.

But Amazon never really grew up. Mr. Bezos still runs it with the drive of a startup trying to survive.

That ethos helps keep Amazon booming. Aggressive competition—including wresting market share from rivals—is often a hallmark of a successful business. It’s also why the tech-and-retail giant is the target of rivals, regulators and politicians who say its tactics are unfair for a company its size, and potentially illegal. As the company has grown, so has its capacity to take on an ever-growing array of competitors.

Bull Market
To keep customers happy, which Mr. Bezos has long said is Amazon’s fixation and growth strategy, executives behind the scenes have methodically waged targeted campaigns against rivals and partners alike—an approach that has changed little through the years, from diapers to footwear.

No competitor is too small to draw Amazon’s sights. It cloned a line of camera tripods that a small outside company sold on Amazon’s site, hurting the vendor’s sales so badly it is now a fraction of its original size, the little firm’s owner said. Amazon said it didn’t violate the company’s intellectual-property rights.

When Amazon decided to compete with furniture retailer Wayfair Inc., Mr. Bezos’s deputies created what they called the Wayfair Parity Team, which studied how Wayfair procured, sold and delivered bulky furniture, eventually replicating a majority of its offerings, said people who worked on the team. Amazon and Wayfair declined to comment on the matter.

Amazon set its sights on Allbirds Inc., the maker of popular shoes using natural and recycled materials, and last year launched a shoe called Galen that looks nearly identical to Allbirds’ bestseller—without the environmentally friendly materials and selling for less than half the price.

“You can’t help but look at a trillion-dollar company putting their muscle and their pockets and their machinations of their algorithms and reviewers and private-label machine all behind something that you’ve put your career against,” said Allbirds Co-CEO Joey Zwillinger. “You have this giant machine creating all these headwinds for us.”

An Amazon spokesman said the company’s shoe didn’t infringe on Allbirds’ design, adding that the company has previously said: “Offering products inspired by the trends to which customers are responding is a common practice across the retail industry.”

This year, Amazon has zeroed in on Shopify Inc., a fast-growing Canadian company that helps small merchants create online shops. Amazon has established a secret team, “Project Santos,” to replicate parts of Shopify’s business model, said people familiar with the project.

Amazon executives often initiated efforts like these on their own, though in some cases examined by The Wall Street Journal, Mr. Bezos himself was involved, according to former Amazon executives and internal emails.

From its start as an online bookstore 26 years ago, Amazon has expanded into an online retailer with a presence in nearly every major category. It is also the leading provider of cloud-computing services, a gadget maker, a major entertainment player and a rival to United Parcel Service Inc. and FedEx Corp. Mr. Bezos is the world’s richest man, with a net worth Forbes estimates at $187 billion.

He still exhorts employees to consider Amazon a startup. “It is always day one,” he likes to say. Day two is “stasis, followed by irrelevance, followed by excruciating, painful decline, followed by death.” Mr. Bezos originally considered calling his company Relentless, and www.relentless.com still redirects to Amazon’s site.

Mr. Bezos declined to be interviewed. Amazon declined to provide an overall comment on the topic of this article and responded only to specific examples.

Some rivals and partners say Amazon’s competitive zeal looks like unfair practices. The Journal this year reported that Amazon employees used data about independent sellers on its platform to develop competing products and that it has used the investment and deal-making process in ways that entrepreneurs and others said helped it develop products that competed with its would-be partners. Journal reporting showed how Amazon has limited some competitors’ ability to promote rival streaming devices and other gadgets on its dominant e-commerce platform.

Mr. Bezos in July testimony to the House Antitrust Subcommittee about the Journal’s private-label article, said: “I can’t guarantee you that that policy has never been violated.” The Amazon spokesman said the company doesn’t use confidential information that companies share with it in the mergers-and-acquisitions and venture-capital processes to build competing products. Amazon didn’t directly address the question of whether it hobbles rivals’ marketing, saying it is common practice among retailers to choose which products they promote.

The Justice Department last year launched a broad investigation of the market power of large technology companies including Amazon, and the Federal Trade Commission has oversight of Amazon as part of a broader look into the business practices of big tech. Europe’s antitrust regulators last month charged Amazon with violating competition law. Amazon said it disagreed with the allegations and would continue to engage with the commission.

In October, the House Antitrust Subcommittee concluded a 16-month investigation into tech companies with a report accusing Amazon of exerting “monopoly power” over sellers on its website. “It’s very clear that they use the enormous market power that they have to maintain dominance,” Rep. David Cicilline (D., R.I.), chairman of the subcommittee, said in an interview.

Amazon has denied exerting monopoly power. In response to the investigation, it published a blog post saying that “large companies are not dominant by definition, and the presumption that success can only be the result of anti-competitive behavior is simply wrong.”

Amazon’s version
At its height about a decade ago, Pirate Trading LLC was selling more than $3.5 million a year of its Ravelli-brand camera tripods—one of its bestselling products—on Amazon, said owner Dalen Thomas.

In 2011, Amazon began launching its own versions of six of Pirate Trading’s top-selling tripods under its AmazonBasics label, he said. Mr. Thomas ordered one of the Amazon tripods and found it had the same components and shared Pirate Trading’s design. For its AmazonBasics products, Amazon used the same manufacturer that Pirate Trading had used.

Amazon priced one of its clone tripods below what Mr. Thomas paid his manufacturer to have Pirate Trading’s version made, he said. He determined it would be cheaper to buy Amazon’s versions, repackage and resell them than to buy and sell them on the terms he had been getting; he decided not to do that.

Amazon suspended Pirate Trading camera tripod models that competed with the AmazonBasics versions repeatedly, Mr. Thomas said, alleging his tripods had authenticity issues. Amazon rarely suspended the tripod models that didn’t compete with AmazonBasics versions, he said. In 2015, Amazon suspended all Ravelli products, he said, and even though the suspension ended, his company’s tripod business is now a fraction of the size it was. Mr. Thomas said he found being a seller on Amazon too risky and has largely pivoted to real-estate investing.

Several Amazon sellers said they have received notifications from Amazon, which has been battling fraud and fake goods on its platform, that say their products are used or counterfeit. Amazon suspends their selling accounts until they can prove that the products are legitimate, which can cause big sellers to lose tens of thousands of dollars each day, they said.

To turn their accounts back on, Amazon often requests that the sellers provide details on who manufactures their product along with invoices from the manufacturer so that Amazon can verify authenticity. Several sellers told the Journal they provided those details to Amazon to get their accounts reinstated, only for Amazon to introduce its own version of their products using the same manufacturer.

The Amazon spokesman said the company requests invoices when there is a counterfeit claim and doesn’t use information it requests about a seller’s manufacturer to procure private-label products.

CJ Rosenbaum, a lawyer who works on behalf of Amazon sellers, said some of them use intermediary “black box” factories to hide suppliers’ identities from Amazon: “They get the finished goods and ship them to a black-box factory who will ship their products to Amazon.”

‘Held as a prisoner’
More than half of all product searches start on Amazon’s search bar, according to some estimates, making it the de facto place for product discovery. For many sellers, Amazon represents the majority of their revenues.

“It’s literally like being held as a prisoner with Amazon,” said Billy Carmen, a Holly, Mich., seller of patio products, “and because of that there’s no place else companies like us can go to sell our products. Amazon uses that against us.”

The 62-year-old in late April sent Amazon invoices from his manufacturer because his account was under threat of suspension for counterfeit claims, even though he makes the product in question. He worries about the level of information Amazon has about his supply chain, though so far he hasn’t seen any Amazon-branded imitations on the site.

Mr. Bezos set out to make Amazon a destination where consumers can find everything they want and continues that push. “If a company is offering something that Amazon thinks they can do better, or can do less expensively, then they will try to do it,” said Patrick Winters, an Amazon Prime Video manager who left this summer to work for Albertsons Cos. after more than a decade at Amazon.

“That was Amazon’s philosophy from the start,” Mr. Winters said, “to basically have everything a customer wants even if it’s something only a few customers want.”

Quidsi, parent of Diapers.com and Soap.com, became a target a decade ago, when Amazon set up a team to focus on it, according to emails released as part of congressional hearings. Amazon wanted to know how the New Jersey e-commerce company could deliver bulky packages of diapers so quickly, said people familiar with the matter.

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Amazon in 2009 developed a 12-step plan to take on Quidsi, according to the emails released by Congress. Action items in emails included “Beat or meet Diapers.com’s delivery speed” and “Beat or meet Diapers.com’s 6PM order time cutoff.” An internal email that year from a top Amazon retail executive called Quidsi “our #1 short term competitor,” and said: “we need to match pricing on these guys no matter what the cost.”

In a June 2010 email chain that included Mr. Bezos, a senior executive laid out tactics, saying “We have already initiated a more aggressive ‘plan to win’ against diapers.com in the diaper/baby space,” a plan that included doubling Amazon’s discounts on diapers and baby wipes to 30% off, and a free Prime program for new moms.

When Amazon cut diaper prices by 30%, Quidsi executives were shocked and ran an analysis that determined Amazon was losing $7 for every box of diapers, former Quidsi board members said. Senior Quidsi executives were even more surprised when, the day of the price cuts, Jeff Blackburn, a top lieutenant to Mr. Bezos, approached a Quidsi board member saying the company should sell itself to Amazon, said a person familiar with the matter. At that point, Quidsi wasn’t for sale and had big growth plans.

Editor’s Note: What’s described here — selling at a loss to eliminate a competitor is illegal, but. Like most corporate crime, has been ignored by Democratic and Republican administration’s alike. (Individual prosecution decisions theoretically are made by non-partisan civil servants.) Remarkably, the website of the Federal Trade Commision claims “Instances of a large firm using low prices to drive smaller competitors out of the market in hopes of raising prices after they leave are rare.” And racism no longer exists, either.

While the reporting here is excellent overall, we should ask why the media almost never seeks statements from those whose job it is to prosecute such crimes and ask their reasons for not enforcing the law).

Quidsi started to unravel after Amazon’s price cuts, said Leonard Lodish, a Quidsi board member at the time, missing its internal monthly projections for the first time since 2005. The company felt it had no choice but to sell itself because it couldn’t compete with what Amazon was doing and survive. Amazon bought Quidsi in 2010 for about $500 million. It shut down Diapers.com in 2017, saying it was unprofitable.

“What Amazon did was against the law. They were selling diapers for below cost,” said Mr. Lodish. “But what were we going to do? Sue Amazon for antitrust? It would take years and tens of millions of dollars and we’d be bankrupt by then.”

The Amazon spokesman declined to comment on the specifics of the Quidsi acquisition, saying Diapers.com wasn’t profitable when Amazon acquired it. Mr. Blackburn declined to comment.

Wayfair Parity Team
In 2016, Wayfair was an online retailer of furniture such as coffee tables and nightstands with $3.4 billion in revenue that year, compared with Amazon’s $136 billion. Amazon had less furniture selection than Wayfair, and its so-called S-team of senior vice presidents—some directly under Mr. Bezos—made the market a priority, said the people who worked on the team.

That year, Amazon launched its Wayfair Parity Team, which analyzed Wayfair’s business with the goal of eventually selling on Amazon 90% of furniture Wayfair offered, the people said. The team grew to around 100 people. It struggled to find Wayfair’s suppliers. Wary of competitors, Wayfair was buying items from manufacturers and rebranding them to mask their identity, said the people.

The team eventually identified the manufacturers by ordering Wayfair products to check manufacturing information and by going to trade shows to find Wayfair’s suppliers, they said.

Images from court documents show the West Elm Orb chair listing, left, and the Amazon Orb

In March 2018, Amazon began selling an “Upholstered Orb Office Chair” under its Rivet brand. 

Amazon didn’t stop Wayfair’s growth. The smaller company increased its share of online furniture sales in the U.S. to 25% last year from under 18% in 2016, according to market-research company 1010data—although Wayfair’s net loss also widened during the period. Amazon’s market share stayed steady, at just over half of online furniture sales, including its direct sales and those of outside vendors on its platform.

In the most recent quarter, Wayfair’s revenue grew 66.5% and the company posted its second consecutive quarterly profit after straight quarterly losses since its 2014 market debut.

The Amazon spokesman, while declining to comment on the Wayfair Parity Team, said part of earning customer loyalty is making selection and pricing as good or better than competitors’.

Williams-Sonoma Inc. successfully fought back against Amazon, which it claimed had copied a chair sold by its West Elm brand, known for its midcentury-modern furniture style. West Elm’s distinctive-looking orb dining chair was a particular hit, with more than $2 million in sales in the first 10 months of 2018, according to a complaint Williams-Sonoma filed in a lawsuit against Amazon over the incident, alleging patent infringement. In 2017, West Elm had filed a patent for the design of the chair.

The “Amazon Orb Chair is so highly similar that the ordinary observer would be confused by the imitation,” said the complaint. Williams-Sonoma’s complaint identified other furniture items that Amazon’s private-label team launched that looked nearly identical to designs it began selling earlier, including a coffee table and a few lamps.

Amazon removed the items from its website and settled the lawsuit in October, with a favorable outcome for West Elm, according to people familiar with the matter. Amazon and Williams-Sonoma declined to comment on the lawsuit.

Powerful tool
In targeting competitors, Amazon’s private-label team has access to a powerful tool: Amazon’s database of search terms customers frequently use. The team can add those terms to their product descriptions and detail pages to gain a boost on Amazon’s search engine, some former Amazon private-label employees said.

When employees on Amazon’s private-label team in 2017 launched its Goodthreads line of apparel such as military jackets and chino pants, they sought to create an aesthetic similar to that of J.Crew, one of the former employees said. Parent company J.Crew Group for years avoided selling on Amazon. J.Crew’s then-Chairman Mickey Drexler in a 2017 conference said he wouldn’t sell on Amazon because: “No. 1, they own the customer” and would “take every bestseller and put it into their private label collection.”

So the Goodthreads managers took steps to help searches for “J.Crew” show results that included Goodthreads, according to the person. Goodthreads is now one of Amazon’s top 10 private-label brands, according to e-commerce intelligence firm Marketplace Pulse.

The Amazon spokesman said Goodthreads targets an aesthetic common among multiple brands and isn’t unique to J.Crew. J.Crew declined to comment.

Shoe seller Allbirds, too, refused persistent Amazon efforts to get it to sell on the tech giant’s site, said Mr. Zwillinger, the co-CEO. The San Francisco startup launched its first shoe, “Wool Runner,” in 2016. It was the product of three years of research and development, using fabric from an Italian mill and a sole that was “carbon neutral,” produced with a Brazilian chemical company.

The lightweight shoe became an instant success. Amazon consistently contacted Allbirds between 2017 and 2019 to sell on its site, said Mr. Zwillinger. Allbirds always declined.

Allbirds’ team in mid-2017 began noticing that, on Google’s search engine, the top results for “Wool Runner” were knockoffs from outside vendors on Amazon, Mr. Zwillinger said. Allbirds believed Amazon was buying advertisements on Google to siphon demand for the shoes to itself, he said.

Mr. Zwillinger said it isn’t possible to track the damage to his company, but that “to see a company with the deep pockets of Amazon try to siphon off demand and give it to copycats is really frustrating.”

Then came the Galen shoe. Mr. Zwillinger said he believes search data guided Amazon’s decision to clone his hit product, which he said looks “eerily similar” to his shoe.

“I’m not saying whether they did or didn’t infringe. We didn’t get a lawyer involved,” he said. Because of Amazon’s size, he said, “it seems like that’s going to be an uphill battle that’s not worth fighting.”

Amazon’s Galen shoe.
The Amazon spokesman said that the company didn’t target Allbirds on Google advertising and that it was obvious wool shoes were trending.

Now, Amazon is targeting one of the biggest pandemic beneficiaries, Shopify, a platform that helps bricks-and-mortar stores set up online shops. With the coronavirus causing store shutdowns, many smaller retailers have invested in creating online stores using Shopify’s technology.

Small retailers on Shopify had aggregate sales of $5.1 billion over Black Friday weekend, topping Amazon’s $4.8 billion from its third-party sellers. Amazon won’t disclose how much it made in sales from its first-party business where it buys inventory and resells it. The 14-year-old Shopify’s share price has roughly tripled over the past year.

Amazon had largely dismissed the Canadian company internally, said employees on and off the project, but that has changed over the past year now that it looks like a significant threat. “It’s super high on our radar,” said one of the people.

At roundtables with its sellers, the people said, Amazon has learned that many had been defecting to Shopify because of increasing fees from Amazon, which on average collects 30% of each sale on its platform from outside vendors, up from 19% five years ago, according to the Institute for Local Self-Reliance. Shopify collects 2.9% plus 30 cents a transaction.

Earlier this year, Amazon created a top-secret task force dedicated to studying the Canadian company and copying parts of it, said the employees. To lead the team, Amazon tapped Peter Larsen, a longtime executive and vice president, consumer. Mr. Larsen recruited dozens of executives, who have signed nondisclosure agreements to work on the project. Internal chat boards are filled with other Amazon employees digging for information on “Project Santos,” the employees said.

Amazon and Mr. Larsen declined to comment on Project Santos. Shopify didn’t respond to requests for comment.

In October, the team presented its work to Mr. Bezos, who was enthusiastic that the project could help stem the defection of sellers to its Canadian rival, said the employees. Amazon hasn’t launched the project yet, they said.

Mr. Larsen’s direct reports have cryptic descriptions in their LinkedIn profiles about what they are working on. One lists “new things on the horizon,” while another writes “Good things are happening.”

Sebastian Herrera contributed to this article. Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 

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Time to Reverse Corporate “Constitutional Rights”

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By Representative Pramila Jayapal
February 5, 2020

This past fall, Amazon challenged the proudly progressive character of my home city, Seattle, pouring $1.5 million into its City Council elections.

In doing so, Amazon placed not just a thumb but also a fistful of cash on the scales of our democracy. Thanks to immediate organizing on the ground and the speaking out of elected officials, the cynical and last-minute corporate spending on elections backfired: Nearly all of the Amazon-backed candidates lost their races.

However, on this 10th anniversary of the US Supreme Court ruling in Citizens United v. Federal Election Commission that catalyzed our current era of super PACs and corporate power, the clear danger posed by money in politics is real. Citizens United vastly expanded the rights of corporate entities and the super-wealthy to spend or invest their money to influence political elections and deepened the corrupting electoral influence of big money.

In the 10 years since Citizens United, we’ve seen newly created super PACs and “dark money” political nonprofits spend staggering sums, taking in unlimited donations without having to disclose them. While they cannot coordinate their spending with specific candidate campaigns, they can spend on political attack ads and other forms of political influence. From 2010 to 2018, super PACs spent roughly $2.9 billion on federal elections while dark-money spending rose from $129 million in the period from 2000 to 2008 to $964 million from 2010 to 2018.

It is important to note that Citizens United was not the first time political money in elections has been equated with “free speech” and corporations have been equated with people with constitutionally protected rights. The claim that corporate entities are legal persons with constitutional “rights” has been around for over a century.

Political money as free speech originated in the 1976 Buckley v. Valeo decision, while corporate political free speech rights began with the 1978 First National Bank v. Bellotti ruling.

But corporate constitutional rights extend beyond First Amendment free speech rights. Corporate constitutional rights began in the 1880s when Supreme Court Justices hijacked the Bill of Rights and the 14th Amendment—intended to guarantee equal protections for black Americans—claiming the rights of people also applied to corporate entities. Courts also interpreted sections of the original Constitution to protect corporate “rights” over those of people and communities, even though corporate entities are not mentioned anywhere in our Constitution.

The collective consequences of this have been devastating.

The corporate First Amendment “right not to speak” means that consumers may end up knowing less about what’s in the food they eat. The corporate First Amendment religious “right” granted in the 2014 Hobby Lobby decision gives a for-profit corporation the right to deny reproductive health care coverage based on religious belief.

The corporate Fourth Amendment search and seizure “rights” prevents warrantless inspections of many businesses to ensure safe working and environmental protections.

The corporate Fifth Amendment takings “rights” defines certain corporate regulations that protect private land as a “taking,” with the corporation being justly compensated for lost current and/or future profits.

Therefore, any full remedy to the questions of money into elections must address not only the immediate effects of Citizens United but also the entirety of corporate constitutional rights.

That is why in 2019, I introduced House Resolution 48, the We the People Amendment calling for ending all corporate constitutional rights—as well as political money as free speech.

The flood of money into elections following Citizens United and other court decisions has eroded public trust in our elected leaders to seriously address issues like health care, climate change, wealth inequality, guns, and infrastructure. Only by ending all of these corporate constitutional rights and the corrupting influence of political money as “free speech” can we have a government that represents all of us rather than only the interests of the super-wealthy.

The We the People Amendment (HJR 48), co-sponsored by 67 of my House colleagues, enjoys widespread support with the American public. The national group Move to Amend has been educating and organizing citizens across the country, building an authentic, grassroots movement seeking a systemic solution to address the harms of Citizens United.

The American people urgently want us to return our government back to the people instead of the highest bidders. It’s up to all of us to make that happen.

Pramila Jayapal represents Washington’s 7th District in the United States House of Representatives.