Amazon.com Inc. said last year to the manufacturer of smart thermostats Ecobee that it must provide data to the technology giant on its voice devices, even when customers did not use them. The Canadian company said no.
The smaller company feared that compliance with the request would violate customer privacy, said a person familiar with the episode. Ecobee devices work with Alexa, Amazon’s voice assistant and already share some data with Amazon, the person said. Moreover, the company was worried that Amazon would get information from Ecobee users that it could use in competing products.
Amazon responded that if Ecobee does not provide its data, the refusal could affect Ecobee’s ability to sell on Amazon’s retail platform, the person said.
Amazon’s tactic of capitalizing on a dominant position in one business to force partners to accept the terms from another is a familiar one, said former Amazon executives and company officials. Amazon’s tactics, they say, go beyond the typical product package and tough negotiations in part because the company threatens punitive action on vital services it offers, such as its retail platform.
Partners often comply with Amazon’s requirements, executives and officials said, due to its strength in a number of market sectors.