Amazon.com Inc. last year told smart-thermostat maker Ecobee it had to give the tech giant data from its voice-enabled devices even when customers weren’t using them. The Canadian company said no.
The smaller company feared that complying with the demand would violate customer privacy, said a person familiar with the episode. Ecobee’s devices work with Alexa, Amazon’s voice-powered assistant, and it already shared some data with Amazon, the person said. Moreover, the company worried Amazon would glean insights from Ecobee’s users that it could use in competing products.
Amazon responded that if Ecobee didn’t serve up 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 compel partners to accept terms from another is a familiar one, said former Amazon executives and officials at companies on the receiving end. Amazon’s tactics, they said, go beyond typical product bundling and tough negotiating in part because the company threatens punitive action on vital services it offers, such as its retail platform.
Partners often acquiesce to Amazon’s demands, the executives and officials said, because of its power in a range of market sectors.