Amazon.com Inc. last year told smart thermostat maker Ecobee that it had to provide data to the tech giant of its voice devices, even when customers weren’t using them. The Canadian company said no.
A company familiar with the episode said the smaller company feared that compliance with the lawsuit would violate customer privacy. Ecobee’s devices work with Alexa, Amazon’s voice assistant, and already shared some data with Amazon, the person said. In addition, the company was concerned that Amazon would obtain information from Ecobee users that it could use in competing products.
Amazon responded that if Ecobee did not release its data, the refusal could affect Ecobee’s ability to sell on Amazon’s retail platform, the person said.
Amazon’s tactic of leveraging dominance in one business to force partners to accept another’s terms is familiar, according to former Amazon executives and company officials at the reception. They said Amazon’s tactics go beyond typical product grouping and tough negotiation, as the company threatens punitive action for the vital services it offers, such as its trading platform.
Partners often meet Amazon’s demands, executives and officials said, because of their power in various market segments.