Amazon.com Inc. Last year, smart thermostat maker Ecobee told it to provide the tech giant with data from its voice-controlled devices even when customers weren’t using them. The Canadian company said no.
The smaller company feared meeting the demand would violate customer privacy, a person familiar with the episode said. Ecobee’s devices work with Alexa, Amazon’s voice assistant, and it has already shared some data with Amazon, the person said. In addition, the company was concerned that Amazon would collect insights from Ecobee’s users that it could use in competing products.
Amazon replied that if Ecobee didn’t offer 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 company to force partners to accept terms from another is well-known, said former Amazon executives and officials at host-end companies. Amazon’s tactics, they said, go beyond typical product bundling and harsh bargaining, in part because the company threatens to punish essential services it offers, such as the retail platform.
Partners often agree to Amazon’s demands, executives and officials said, due to its power in a range of market sectors.