Hackers, ‘virtual assault rifles,’ and how Jeff Bezos has lost control of Amazon


Has Jeff Bezos lost control of the giant tech monster that he created, Amazon? That’s what I’m starting to wonder after a series of beyond-unfortunate — and at times remarkable — events that my law partner Barry J. Cooper Jr. and I have had in dealing with the world’s largest online retailer.

It all started with a computer hack, then escalated with the hackers’ purchase of thousands of dollars of — of all things — virtual assault rifles (from a wholly owned Amazon subsidiary, no less) and ended up with the company taking punitive measures not against the thieves but against Cooper and, even more bizarrely, against me.

Today, Cooper and I are putting Amazon on notice. Last week, the Cooper Law Firm — where I am of counsel — informed the Seattle-based tech monster of our intention to sue Amazon in our home state of Louisiana for allowing this egregious data breach and for violating the state’s Unfair Trade Practices Act in hounding us over these fraudulent charges.

It shouldn’t have had to come with this. But going to court seems to be the only way to get the attention of a company whose owner Jeff Bezos has become the richest man in the history of the planet and that has grown so arrogant that rather than profusely apologize to its customers for a significant privacy breach and trying to track down and arrest the criminals, it adds insult to injury by blocking and billing the victims.

There is much to admire about Bezos’ original 1990s’ vision for his company, his business acumen and his stewardship of the Washington Post — a bastion of press freedom in these troubled times — but he needs to get his main house in order. As Amazon has grown in size, the company has also spiraled into chaos.

This all started last July when an unauthorized hacker gained access to Cooper’s Amazon account, and — over a 12-day period — used the credit cards that he had on file with the company to buy 50 “crates” of virtual assault rifles to use in online video games. Each of the 50 crates had an individual purchase price that was below $200 — and thus too low to trigger any type of fraud detection. Needless to say, however, the scam added up, so by the time that Cooper saw the fraudulent charges on his credit card bill the losses were close to $9,000.

Amazon’s failure to prevent this type of data breach isn’t just bad business but a case of gross negligence. By this time of this incident in July 2018, the online business world had already been placed on notice of widespread data breaches affecting millions of customers. Most famously, in 2017 the major credit-rating service Equifax said hackers had gained access to private information about 143 million Americans, including hundreds of thousands of credit cards numbers. That a massive and highly profitable company like Amazon lacked proper cybersecurity to prevent this type of data breach is a stunning failure.

Cooper did what any red-blooded American consumer would do: He immediately called up his credit card companies and disputed the 50 bogus charges. And these banks did what’s supposed to happen when there’s a data breach: They halted payment. (Although I’m compelled to say that Visa and Master Card — the cards involved here — don’t fight for their clients the way that American Express does.) That should have been the end of the story – but it was just the beginning of a consumer nightmare. Instead, the company that dominates global e-commerce froze Cooper’s account, and has continued to do so through now.

In its most recent communication dated April 21, Amazon continues to insist of these charges — the obvious result of hacking — that “your account will remain on hold until we receive this payment.” Numerous attempts over a number of months to contact Amazon and resolve this matter have gone nowhere.   

We did learn something interesting, though, which is that the company selling those virtual assault rifles — Twitch Interactive, the leading online streamer of video games — was sold in August 2014 for $970 million. The buyer? Amazon. This kind of conflict of interest — Amazon’s ability to connect buyers with goods when increasingly it’s also the seller of those goods — could explain why the firm is not eager to nullify this purchase and unfreeze Cooper’s account.

But there’s one more disturbing angle to all of this. A short time after Cooper’s account was frozen, I also received a notice from Amazon. They said they were also blocking my account, because it was “associated” with a closed account, which is obviously Cooper’s. That’s right — because I share the same business address with someone who was the victim (not the perpetrator!) of a data breach, I’ve also been banned from the world’s largest online marketer. Unbelievable.

Two months ago, I wrote Amazon a registered letter urging that a live human talk to me and resolve the matter by unblocking my account. “I am not interested in litigating this simple matter which results from computer confusion,” I wrote. “If a live human being would have the courtesy to call me back to discuss this urgent matter, it would be much appreciated.” When I still didn’t hear from anyone, I wrote this second letter.

Amazon is harassing two longtime Prime account holders, when it could have reported this data breach to the proper authorities, identified the thieves and worked with law enforcement to make the criminals repay the money.  Surely Twitch Interactive — Amazon’s wholly owned subsidiary — could help identify who the wrongdoers are. A theft of this magnitude is punishable with substantial prison time.

Our experience is also part of a much broader reality — that while Amazon completely dominates the field of internet commerce, the firm has amassed enormous, and unchecked, quasi-legal powers to determine who can use its site and who can’t. This is particularly true for the millions who make a living selling products through the site.

Last December, an article in The Verge described Amazon and this system as “a quasi-state,” writing that “now that the company controls nearly half of the online retail market in the US, its rulings can instantly determine the success or failure of your business.” The article quotes one critic, Dave Bryant, as saying, “Amazon is the judge, the jury, and the executioner.”

One thing that’s striking about this action by Amazon is that Cooper and I are not everyday citizens but prominent attorneys who — among other things — once litigated and won a $1.056 billion jury verdict against the world’s largest oil company, Exxon-Mobil. If we receive this kind of treatment from the company, imagine how customers with less means and legal savvy are dealt with by this out-of-control monopoly.

Enough is enough. Last week, the Cooper Law Firm filed a legal action on Cooper’s behalf seeking damages from Amazon for the data breach and for its clear violation of the Louisiana Unfair Trade Practices Act, which bars the company from seeking to collect fees from fraudulent activity such as the hacking of Cooper’s account.

Additionally, the law firm informed the company by registered letter that the firm is in violation of both the federal Fair Debt Collection Practices Act as well as the Louisiana Fair Debt Collection Act for its multiple, bad-faith efforts to coerce Cooper into paying for the bogus charges. It asks Amazon to halt its collection activities and restore Cooper’s account. A copy of the letter was forwarded to Louisiana’s attorney general, Jeff Landry.  

That’s not all. This article will be sent – via Twitter – to every member of the U.S. House and Senate, because our elected representatives need to start doing their jobs and cut Amazon down to size, just as the government did with Standard Oil and then with AT&T, back in the day when Washington took its trust-busting responsibility seriously.

When customers plea for help, Amazon does not pick up the phone. But you know what: A jury can make Jeff Bezos pick up the phone. That is the beauty of our incredible Constitution, that gives us the right to speak truth to power.

This is a matter of justice not just for one consumer, but for the millions of consumers who are at risk both from Amazon’s reckless handling of their most personal and private data and from the arrogance of Jeff Bezos’s monopolistic giant, which functions less as a corporation and more as a rogue state making its own harsh and inscrutable rules. Unless Amazon does the right thing and addresses the issues raised in this complaint, Cooper and I will convert this case into a class action suit, which would mean multi-district litigation in which Amazon’s violations of the law would go before federal judge and possibly a jury.  Jeff Bezos should desperately not want this to happen.

In March, Sen. Elizabeth Warren declared that it’s past time for government regulators to break up the tech giants like Amazon, Facebook and Google. The Democratic presidential candidate told a rally in Queens, N.Y., that Amazon reminds her of the dystopian novel “The Hunger Games,” with its ability to impose its will on the less-fortunate masses. “I’m sick of freeloading billionaires!” she proclaimed.

So am I!

In this political climate, Amazon has a choice. It can start taking its awesome public trust to safeguard the data of its customers – and to treat them as human beings – more seriously. Or it can face the growing chorus calling for a more sweeping kind of change, the voices like Sen. Warren who say it is time for Bezos’ empire to be broken up.

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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