Amazon is well-known for its tax avoidance, workers’ rights abuses and monopolistic behaviour.
Here, we introduce our Amazon alternatives series, outlining more ethical options. We also explain the background to our Amazon boycott and why we launched it in 2012.
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The list of accusations against Amazon is long, from offering its services to fossil fuel giants to firing activist workers. Since 2012, Ethical Consumer has been calling for a boycott of the company over its tax avoidance which costs the UK millions in public funds every year.
Our featured guides such as bookshops and online retailers are focused on helping you avoid Amazon, and to take pleasure in supporting the good guys – the ethical alternatives that are challenging its online monopoly.
Below we outline three of the main reasons why we are calling for a boycott of Amazon.
1. Tax avoidance
In September 2021, Amazon – which has a market value of £1.5 trillion – released its tax figures for the previous year. Its key arm in the UK, Amazon UK Services, paid just £3.8 million more in corporation tax than in 2019 despite sales rising by £1.9 billion. Profits increased to £128 million.
Over the years, we have repeatedly told the same story, with headlines like ‘Amazon’s UK tax up just 3% despite surge in profits’ in October 2020 to ‘Amazon’s tax bill falls despite tripling profits’ in September 2018. In 2019, Fair Tax Mark named Amazon as having “the poorest tax conduct” of the six major tech companies – a sector known for its tax avoidance.
Amazon has been criticised for its tax practices in many parts of world, from the EU to the US. In 2018, for example, the company helped kill a new tax law in Seattle aimed at tackling homelessness – which had reached a ‘state of emergency’ in the city – after it threatened to pause local investment if the law went ahead.
Globally, the tax avoidance of Amazon and other companies costs US $245 billion a year. The impact is disproportionately felt by poorer countries.
As Athena Coalition – a US organisation of local and national groups opposing the online giant – writes:
“It’s we who should decide what is best for us in our communities — not big corporations. We can stop Amazon’s sweetheart tax deals from local governments, draining of public resources, and big-footing into our neighborhoods with no regard for the rest of us.”
So how is it avoiding so much tax?
Amazon has shunted much of its UK income to its subsidiary in Luxembourg, “where there is a ‘loss-making’ subsidiary that is not only not paying tax, but is generating enormous tax reliefs that can be used in the future to ensure that little or no tax continues to be paid,” according to Paul Monaghan from the Fair Tax Mark.
In fact, a report by Unite the Union in August 2021 found that the company may have shifted as much as £8.2 billion from the UK to Luxembourg in 2019. In 2017, the company registered almost 75% of its UK sales through the subsidiary.
The company has also sometimes shunted its remaining profits through time: Amazon has invested in dominating the market, thereby monopolising industries while keeping its profits low. This way, it can defer paying taxes until another time.
2. Building a monopoly
By investing so heavily, Amazon has also come to dominate many online markets globally.
During the first lockdown in the UK, 35% of all purchases made online were through the company.
As of 2019, almost 40% of UK shoppers had access to Amazon’s Prime subscription service. The company is the top fashion retailer in the USA.
Amazon’s monopoly supports staggering inequalities: between March and September 2020, at a time when most businesses were struggling, Amazon founder Jeff Bezos saw his personal wealth increase so much that he could have given all 876,000 Amazon employees a bonus of $105,000 and be as wealthy as he was pre-pandemic.
