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CNN LIVE EVENT/SPECIAL

Special Report: The Age of Amazon. Aired 9-10:30p ET

Aired August 16, 2019 - 21:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[21:00:00] (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The following is a CNN Special Report.

TEXT: A CNN SPECIAL REPORT.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Hey, who are you?

JEFF BEZOS, FOUNDER, CHAIRMAN, CEO, & PRESIDENT OF AMAZON: I'm Jeff Bezos.

(AUDIENCE CLAPPING)

UNIDENTIFIED MALE: What is your claim to fame?

BEZOS: I'm the Founder of Amazon.com.

POPPY HARLOW, CNN ANCHOR, CNN NEWSROOM: What began as on online book store.

BEZOS: A millennia from now, people are going to look back and say, Wow!

HARLOW: Has become a virtual empire.

(END VIDEO CLIP)

SCOTT GALLOWAY, PROFESSOR OF MARKETING, NEW YORK UNIVERSITY STERN SCHOOL OF BUSINESS: Amazon really is arguably the most successful company in the history of business.

HARLOW: Wow! That's saying a lot.

(BEGIN VIDEO CLIP)

BEZOS: This is the beginning of e-commerce.

(END VIDEO CLIP)

HARLOW: You guys didn't even know if this thing was going to work.

JEFF WILKE, CEO, AMAZON WORLDWIDE CONSUMER: We had a pretty good instinct.

(BEGIN VIDEO CLIP)

BEZOS: If you make the best service online, people will come.

(END VIDEO CLIP)

STACY MITCHELL, CO-DIRECTOR, INSTITUTE FOR LOCAL SELF-RELIANCE: This is a company that wants to control the infrastructure.

(BEGIN VIDEO CLIP)

BEZOS: As computers continue to get cheaper, we will layer innovation on top of that.

(END VIDEO CLIP)

AMY WEBB, FOUNDER, FUTURE TODAY INSTITUTE: It's plausible that Amazon will know you better than you know yourself.

TONI REID, VICE PRESIDENT OF ALEXA EXPERIENCE AT AMAZON: Alexa.

(BEGIN VIDEO CLIP)

HARLOW: It's in our homes.

(END VIDEO CLIP)

HARLOW: Should people trust that it won't be used against them in some way that they don't authorize?

REID: Absolutely.

(BEGIN VIDEO CLIP)

HARLOW: At our fingertips.

(END VIDEO CLIP)

KASHMIR HILL, DEPUTY EDITOR, SPECIAL PROJECTS DESK: Amazon Web Services took over the web basically in a decade.

HARLOW: Does having that much power give you pause?

ANDY JASSY, CEO, AMAZON WEB SERVICES: That's a significant responsibility. We're aware of that.

(BEGIN VIDEO CLIP)

HARLOW: And now, it fuels our economy.

UNIDENTIFIED FEMALE: Amazon is America's second trillion-dollar company now.

UNIDENTIFIED FEMALE: The company is now worth almost as much as the entire economy of Australia. (END VIDEO CLIP)

HARLOW: Is Amazon too big?

JASSY: I - I don't think Amazon is too big.

(BEGIN VIDEO CLIP)

(CROWD PROTESTING SHOUTING AMAZON HAS GOT TOO BIG)

(END VIDEO CLIP)

REP. DAVID CICILLINE (D-RI): I think they have monopoly power.

GALLOWAY: Amazon has become an invasive species.

HARLOW: So, you think that Amazon should be broken up?

GALLOWAY: Oh, 100 percent.

(BEGIN VIDEO CLIP)

HARLOW: A journey--

(END VIDEO CLIP)

JAMIE DIMON, CEO, JPMORGAN CHASE: It's a business miracle.

(BEGIN VIDEO CLIP)

HARLOW: --and a leader, unlike any other.

BEZOS: This is Blue Moon.

I ask people at Amazon to kind of wake up every morning afraid, wake up terrified. Be afraid of our customers. Those are the people we have to pay attention to.

HARLOW: Tonight, a CNN Special Report.

BEZOS: I can guarantee you one thing, it will be fun.

HARLOW: The Age of Amazon.

(END VIDEO CLIP)

HARLOW: How has the retail industry changed during this rise of Amazon?

GALLOWAY: Well you have this sort of Great White Shark that's always, you know, kind of looming offshore and--

HARLOW: Great White Shark!

GALLOWAY: Well this thing does and can eat everything.

(BEGIN VIDEO CLIP)

HARLOW: Despite holding only a small fraction of global retail sales, today, Amazon takes claim for nearly 50 cents of every dollar spent in online e-commerce in the United States, an astounding market dominance.

You've called what Jeff Bezos has built a miracle.

WARREN BUFFETT, CHAIRMAN & CEO, BERKSHIRE HATHAWAY: Absolute miracle. So, it's - it's one of the great - and might be the greatest before it gets all through on that.

HARLOW: Legendary Investor Warren Buffett even called himself an idiot for not investing in Amazon earlier.

What is it about Jeff Bezos, the man that has made him and Amazon such a success?

BUFFETT: I wish I could give my blood testers. I mean--

HARLOW: You want to clone them?

BUFFETT: Maybe - maybe I have a - in fact, I know I want a transfusion. I actually--

(END VIDEO CLIP)

HARLOW: Warren Buffett told me just a few weeks ago, the rise of Amazon, in his view, is a miracle. Is it a miracle?

DIMON: It's a business miracle.

HARLOW: Really?

DIMON: I mean you wouldn't have thought that at - almost a trillion- dollar company would be formed in 25 years that it would disrupt so many different things and create so many different things, and it's still a growing machine. So yes, it's a business miracle.

BRAD STONE, JOURNALIST, " THE EVERYTHING STORE: JEFF BEZOS AND THE AGE OF AMAZON " AUTHOR: Miracle seems like it's an act of God and Amazon has been anything but.

[21:05:00] I think it's the application of business wisdom and technical expertise--

HARLOW: Yes.

STONE: --over a long period of time.

(BEGIN VIDEO CLIP)

HARLOW: Brad Stone has been studying Amazon and writing about its growth since the late 90s.

(END VIDEO CLIP) HARLOW: You're writing another book about Amazon. What's the focus? Where does this pick up?

STONE: The Everything Store ended in - in about 2011. And there were so much story left to tell. The company is about four times larger than it was then.

HARLOW: Wow.

STONE: So much has happened.

(BEGIN VIDEO CLIP)

HARLOW: In addition to selling millions of products, Amazon also manufacturers thousands of its own products for the Amazon marketplace, everything from batteries to luggage to motor oil.

(END VIDEO CLIP)

JASON DEL REY, SENIOR CORRESPONDENT, RECODE: But then, increasingly, more than half of what's sold on Amazon comes from a contribution of whittled mom-and-pop sellers to bigger operations that are selling directly to Amazon customers on their own, and Amazon is just taking a cut.

(BEGIN VIDEO CLIP)

HARLOW: A seller, a manufacturer, a marketplace and just the beginning of Amazon's reach.

MITCHELL: They're making investments in healthcare.

HARLOW: You're trying to fix that, make it better with Jamie Dimon and with Jeff Bezos. What should America expect the three of you can do on healthcare?

BUFFETT: That we'll do our best. It's - it's a 3.3 or a 3.4 trillion- dollar industry.

MITCHELL: In finance.

(END VIDEO CLIP)

HARLOW: What would your over/under be on Amazon becoming a bank one day?

DIMON: I think it's - I - I really don't know.

REY: Even a category like online advertising, they're the third biggest platform for ads in the U.S., only after Google and Facebook.

GALLOWAY: Television, who's the second largest spender on original- scripted television in the world right now? Amazon.

HARLOW: How big do you guys want to be?

It has been reported that Amazon spends $5 billion a year on original and licensed content. Am I in the ballpark?

GREG HART, VICE PRESIDENT, AMAZON PRIME VIDEO: I can't confirm or deny that.

HARLOW: OK.

(BEGIN VIDEO CLIP)

REID: Alexa.

ALEXA, AMAZON'S VIRTUAL ASSISTANT: OK.

(END VIDEO CLIP)

GALLOWAY: The most innovative product of the last three years, I would argue, is Amazon's Echo device.

(BEGIN VIDEO CLIP)

REID: Alexa. Turn on the shower.

HARLOW: So, it can warm up.

(END VIDEO CLIP)

GALLOWAY: Whether they're bumping up against Facebook or Google, whether they're bumping up against Apple, anywhere they're bumping up against other big players, they're winning.

(BEGIN VIDEO CLIP)

HARLOW: They're also shipping. Amazon has amassed its own logistics empire with an expanding fleet of trucks, planes, drones, robots and, of course, warehouses, hundreds of warehouses.

(END VIDEO CLIP)

WILKE: It makes same-day possible and makes next-day delivery possible.

HARLOW: There are some who say that Amazon killed traditional retail. How do you see it?

WILKE: What we're trying to do is invent for customers. We sort of look at things that we can make better by innovation.

GALLOWAY: I would describe Amazon, in medical terms, an opportunist infection that has literally culled the herd of any weakness or the aged in retail. Now, were some of these companies who went out of business going out of business anyways? Yes. But Amazon made the decline much faster.

(BEGIN VIDEO CLIP)

HARLOW: In part, by reimagining the physical store experience with their own Amazon-branded retail stores. (END VIDEO CLIP)

GALLOWAY: Amazon is now the only firm in the world that can really perform consistently what I refer to as Jedi mind tricks. When Amazon announced the acquisition of Whole Foods, the value of Kroger, the largest pure-play grocer in the world, its value declined a third.

MITCHELL: It's not just a matter of being big. It's also the structure of its power.

(BEGIN VIDEO CLIP)

HARLOW: Stacy Mitchell is Co-Director of the Institute for Local Self- Reliance, a non-profit that studies economic concentration.

MITCHELL: A handful of big companies have taken over large swaths of our economy.

(END VIDEO CLIP)

MITCHELL: We often try to understand Amazon by talking about all the different businesses that it's in. And more accurate way to understand Amazon is that this is a company that wants to control the infrastructure, the rails that other companies need to use in order to get to market.

(BEGIN VIDEO CLIP)

BEZOS: The infrastructure.

Infrastructure.

Infrastructure lets entrepreneurs do amazing things.

(END VIDEO CLIP)

MITCHELL: In addition to the retail platform, the Cloud is another area that is essentially infrastructure.

JASSY: Speed is a really important part of the culture at Amazon.

We're trying to enable really any company or any government to be able to run their technology infrastructure on top of our technology infrastructure platform.

(BEGIN VIDEO CLIP)

[21:10:00] HARLOW: Though a lesser known part of Amazon, AWS, Amazon's Cloud-business has been instrumental to the company's bottom line.

(END VIDEO CLIP)

HILL: Amazon Web Services took over the web, basically in a decade.

(BEGIN VIDEO CLIP) HARLOW: When Investigative Technology Journalist, Kashmir Hill, started noticing the growing footprint of Amazon in her family's life, she decided to try an experiment, to live without Amazon.

(END VIDEO CLIP)

HILL: I worked with this technologist who built a tool for me that just prevented any of my devices from talking to Amazon servers. So that prevented me from using the thing I use the most with Amazon, which is Amazon Web Services.

(BEGIN VIDEO CLIP)

HARLOW: Not surprising, given that AWS supports countless companies, and government agencies, and powers one-third of the world's cloud.

(END VIDEO CLIP)

MITCHELL: Netflix, Conde Nast, the CIA all rely on Amazon Web Services.

HILL: It's just impossible to avoid.

GALLOWAY: Amazon has become an invasive species.

HARLOW: Ooh, an invasive species?

GALLOWAY: 100 percent.

(BEGIN VIDEO CLIP)

BEZOS: Ready for shipment.

HARLOW: Next, how Bezos did it.

BEZOS: Hong, Japan, Australia.

This is day one. This is the very beginning.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

(CROSSTALK)

HARLOW: By 2012--

JON STEWART, COMEDIAN, 9/11 FIRST RESPONDERS' ADVOCATE: Jeff Bezos, Jeff.

HARLOW: --you would be hard-pressed to find someone who hadn't heard of Jeff Bezos.

UNIDENTIFIED FEMALE: Jeff Bezos, the godfather of a virtual bookstore. JIMMY FALLON, NBC HOST, THE TONIGHT SHOW STARRING JIMMY FALLON: Jeff Bezos.

(CROWD APPLAUSE)

STONE: The Everything Store.

HARLOW: But while researching his book, journalist Brad Stone found that person.

(END VIDEO CLIP)

[21:15:00] STONE: I said, "I'm writing a book about Amazon and about this guy named Jeff Bezos, and I would like to talk to you for it." And he had no idea what I was talking about.

(BEGIN VIDEO CLIP)

HARLOW: That person was Jeff Bezos' biological father.

(END VIDEO CLIP)

STONE: I was like, "Well, he's your son." And he was perplexed. And I said, "When you were in high school, back in Albuquerque, you know, you had a son named Jeff." And he said, "Is he still alive?"

HARLOW: Wow!

STONE: And I was like, "Yes, he's one of the wealthiest guys in the world."

(BEGIN VIDEO CLIP)

HARLOW: Jeff Bezos was born in Albuquerque, New Mexico in 1964. His mother, Jackie Gise was a junior in high school when she and her boyfriend, Ted Jorgensen became parents.

BEZOS: She doesn't talk about it that much. But my mom had me when she was 17 years old. You could ask her. But I'm pretty sure that wasn't cool in 1964 to be a pregnant mom in high school.

HARLOW: But by the time Jeff turned two, his mother and Jorgensen, a circus performer and unicyclist, had split up. And Jackie was left to raise her son on her own.

(END VIDEO CLIP)

JOSHUA WEINSTEIN, JEFF BEZOS' CHILDHOOD FRIEND: Look at Jeff.

HARLOW: Aw!

WEINSTEIN: Look at that hair and the glasses.

(BEGIN VIDEO CLIP)

HARLOW: One of Bezos' closest friends from high school, Joshua Weinstein, remembers Jackie as a loving and determined mother.

(END VIDEO CLIP)

WEINSTEIN: Jackie is the toughest, hardest working person I've ever met, and the most loyal, and Jeff gets that from - from Jackie.

STONE: Jackie Bezos was clearly the force in - in Jeff's life, a fiercely protective mother who got Jeff into the best schools, and got him the best opportunities. And she also recognized, I think, Jeff's abilities early on.

(BEGIN VIDEO CLIP)

HARLOW: Jackie and Jeff wouldn't be a family of two for long. Soon, Jackie would fall in love with a Cuban immigrant named Miguel Bezos. They married when Jeff was four.

BEZOS: My father adopted me when I was about four years old. I have the world's best dad.

(END VIDEO CLIP)

WEINSTEIN: Science Whiz Jeff Bezos is an outstanding student, emphasizing high standards.

(BEGIN VIDEO CLIP)

HARLOW: Bezos' academic ambitions would lead him to the top of his high school class, and then to Princeton University.

BEZOS: I went to Princeton specifically to study physics, but a couple of years into it I realized that I wasn't smart enough to be a physicist. And then I transferred to computer science and electrical engineering, which I loved, and never looked back.

HARLOW: After College, Bezos landed on Wall Street, at the quantitative hedge fund, D. E. Shaw, where he would meet his soon-to- be wife, MacKenzie.

(END VIDEO CLIP)

WEINSTEIN: He called me up one day, and he said "I'm getting married." I said, "Great! To who?" And he told me all about her.

HARLOW: Really?

WEINSTEIN: Yes.

(BEGIN VIDEO CLIP)

HARLOW: Just six months after they began dating, Bezos and MacKenzie were married. And Bezos continued to rise through the ranks at D. E. Shaw, where he began to explore a burgeoning new medium, the internet.

UNIDENTIFIED MALE: It spans the globe like a superhighway. It is called internet. BEZOS: I started looking at the internet, and I found this incredible startling fact.

(END VIDEO CLIP)

HARLOW: Jeff Bezos saw that web activity had jumped 230,000 percent in a short period of time. That was the ding, ding, ding in his head.

STONE: Yes. I think he was able to see very early, you know, that the web was growing, that people were embracing it, and that it would create a whole set of new business opportunities.

WEINSTEIN: Jeff called me, and he said, "MacKenzie and I are quitting our jobs, and we're moving to Seattle, and we're starting a company." And I said, "Great! Well what are you going to do?" He said, "We're going to sell books." I said, "Nice!" He said, "On the internet." I said "Cool! What's the internet?"

HARLOW: In 1994, then 30-year-old Jeff Bezos ditched his lucrative Wall Street job, borrowed his father's car, and drove with his wife MacKenzie to Bellevue, Washington, just outside Seattle. And inside that garage, Jeff Bezos started his own company, an online bookstore. And by the end of the year, that company had a name, Amazon.

JENNIFER CAST, VICE PRESIDENT, SPECIALTY RECRUITING, AMAZON: I went to www.amazon.com, and started searching for books, and was immediately hooked.

(BEGIN VIDEO CLIP)

HARLOW: Jennifer Cast would become Amazon's 25th employee.

UNIDENTIFIED MALE: Thank you for calling amazon.com. All right, how can I help?

HARLOW: By the time she was hired in 1996 to run Marketing--

UNIDENTIFIED MALE: Hello? Amazon.com.

HARLOW: --Amazon headquarters had moved from the Bezos' garage to actual offices in Downtown Seattle.

(END VIDEO CLIP)

CAST: It was definitely a start-up feel. The first building, it was a dump. Jeff thought that it was too fancy for us. There was no air- conditioning. Stained carpets, but we loved it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: This is a solid-core bridge (ph) door.

(END VIDEO CLIP)

HART: The first thing that you did when you started at Amazon is you built your own desk. (BEGIN VIDEO CLIP)

[21:20:00] HARLOW: Greg Hart joined Amazon in 1997, working in Product Management and Marketing for books. Today, he runs Amazon's foray into Hollywood, Prime Video.

UNIDENTIFIED FEMALE: These are four-by-fours, Simpson tiles (ph), put them all together. You got off the furniture.

(END VIDEO CLIP)

HARLOW: Tell people what door desks are. Was it truly frugal, to save money?

HART: It was frugal. That - that - that was exactly how it started, was frugality, but also it's a good symbol of the mindset that Jeff wanted to create. We had to be resourceful and creative.

(BEGIN VIDEO CLIP)

HARLOW: But in order to expand beyond books, way beyond books, Bezos needed capital, and a lot of it.

UNIDENTIFIED FEMALE: Amazon.com jumped $5.5 on its first day of trading.

HARLOW: So, in May of 1997, in the middle of the dot-com frenzy, Amazon went public.

BEZOS: What's really incredible about this is that this is day one. This is the very beginning. This is the Kitty Hawk stage of electronic commerce.

HARLOW: "Day one, it's always day one" became the Bezos' mantra. In his first letter to shareholders, Bezos sketched out the foundation of Amazon. It's all about the long-term.

(END VIDEO CLIP)

STONE: I like and I'll tell Babe Ruth kind of calling his home run shot, it was audacious.

(BEGIN VIDEO CLIP)

HARLOW: Bezos would stick to that long-term thinking, even during Amazon's toughest times.

UNIDENTIFIED FEMALE: Amazon's stock has lost much of its luster.

HARLOW: After the dot-com bubble burst, Amazon stock price tumbled.

UNIDENTIFIED MALE: Investors ran for the exits.

HARLOW: Losing more than 90 percent of its value in the next two years.

(END VIDEO CLIP)

STONE: There were famous analysts who said Amazon would run out of money. But it was also a hard time. They were losing a lot of executives.

HARLOW: Yes.

(BEGIN VIDEO CLIP)

BEZOS: Our first announcement is a complete video game store.

HARLOW: Facing intense pressure--

BEZOS: Store number two.

HARLOW: --Bezos pushed ahead right into new markets.

BEZOS: Tomorrow, we launch these four new stores.

(END VIDEO CLIP)

HART: People were amazingly customer-focused. They felt like they were inventing and breaking new ground.

(BEGIN VIDEO CLIP)

HARLOW: But with new inventory came new problems, how to store and ship all of it.

(END VIDEO CLIP)

HARLOW: So, you are often referred to as the other Jeff.

WILKE: It's my name. I think it's great.

(BEGIN VIDEO CLIP)

WILKE: I grew up as a programmer, that's me.

HARLOW: Jeff Wilke has been with Amazon for 20 years, and rarely gives television interviews. He's now one of Bezos' top executives.

WILKE: We have essentially an assembly process.

HARLOW: But back in 1999, when Wilke first joined Amazon, he used his background in manufacturing to transform Amazon delivery into what would become Amazon Prime.

(END VIDEO CLIP)

HARLOW: You guys didn't even know if this thing was going to work, right?

WILKE: Prime?

HARLOW: True? WILKE: No. We didn't know for sure that customers would love it, but we had a pretty good instinct.

HARLOW: Both of you, both Jeffs, are big risk-takers. Is that right?

WILKE: I think so. I think Prime, at the time, was a big risk.

(BEGIN VIDEO CLIP)

HARLOW: Today, it's estimated that more than half of U.S. households are Prime members.

(END VIDEO CLIP)

HARLOW: What should that tell us about how important Prime is to Amazon's success?

WILKE: I think it's very important. But it's not the only thing that's important for our success.

HARLOW: They say about you that you're the most powerful man in the Cloud. Do you like that description?

(BEGIN VIDEO CLIP)

HARLOW: The man behind Amazon's Cloud, next.

(END VIDEO CLIP)

[21:25:00] (COMMERCIAL BREAK)

HARLOW: Jeff Bezos, the richest man in the world, but they say about you that you're the most powerful man in the Cloud. Do you like that description?

JASSY: I don't think of it that way.

(BEGIN VIDEO CLIP)

HARLOW: In the heart of Amazon's Seattle campus, I met with Andy Jassy, one of Jeff Bezos' top leaders, the CEO of AWS, the man who built Amazon's Cloud.

(END VIDEO CLIP)

JASSY: We're in The Spheres, which is kind of an amazing place when you look around. There are 700 species and 40,000 different plants in here. It's a place that Amazonians can come and do work. It's really nice to be able to get away from what you're doing every day and be inspired by what's around you.

HARLOW: Whose idea was this?

JASSY: I think it was Jeff's idea.

(BEGIN VIDEO CLIP) HARLOW: But Amazon Web Services, that was Jassy's idea, an idea so powerful, it is now perhaps Amazon's most valuable business.

(END VIDEO CLIP)

STONE: It generates an unusual amount of margin for Amazon.

HARLOW: The best margins for Amazon. Period!

STONE: Yes. And it's really almost single-handedly kind of changed enterprise computing.

HARLOW: I think it is fair to say many people watching this have no idea what AWS is. Where did it come from?

JASSY: There were a few things going on, I'll - I'll call it between 2000-2003, that made us think that this was an interesting idea.

(BEGIN VIDEO CLIP)

HARLOW: Most notably, Jassy realized that in order to continue expanding and experimenting at a pace their leader had come to expect, Amazon's computing technology would have to move a lot faster.

(END VIDEO CLIP)

JASSY: If you need a server to try and experiment, it typically takes you 10 to 18 weeks to get that server. With the Cloud, you can - you can spin out thousands of servers in minutes. So, we figured if we needed it, it was probably likely that a lot of other companies needed it as well.

(BEGIN VIDEO CLIP)

HARLOW: In the same way that Amazon transformed the speed of shipping physical products, AWS has done the same for data.

(END VIDEO CLIP)

HILL: The Cloud is not up there. It's, you know, in machines, sitting on the ground, all around the world, and they're just storing all this content, and shipping it out to web users.

HARLOW: What strikes me is that it worked, and then you essentially had a seven-year lead on all your competitors.

JASSY: Yes.

(BEGIN VIDEO CLIP)

BEZOS: This is like the greatest piece of business luck in the history of business, so far, as I know.

(END VIDEO CLIP)

HARLOW: Why did no one follow quickly? JASSY: It's a really good question. And I don't know if we know the answer for sure.

In the beginning, a lot of companies would pooh-pooh the cloud, and say that nobody was going to use it for anything interesting. And when the value proposition is that good for consumers, you can howl at the wind all you want, but you can't fight gravity.

(BEGIN VIDEO CLIP)

[21:30:00] HARLOW: 13 years later, the Cloud is now a $70 billion industry. And while formidable competitors have emerged, Amazon continues to dominate with a seemingly endless list of customers, from Fortune 500 companies to tech start-ups, to yes, CNN, even secretive government agencies, including the CIA.

(END VIDEO CLIP)

HARLOW: The Cloud is crucial to the economy. It's now crucial to national security. Do you think there should be more federal regulation of it?

JASSY: Governments are going to make their own decisions on what they feel like they need to regulate and what they feel like they don't need to regulate. And we expect that governments will - will want to understand how we're operating, as more and more workloads are being put on top of AWS.

(BEGIN VIDEO CLIP)

HARLOW: For now, the federal government is busy deciding how much more of the nation's most sensitive data it wants to place in Amazon's hands. AWS is a final contender for the JEDI contract, a $10 billion Pentagon deal that would involve hosting government data for operations critical to military missions across the globe.

(END VIDEO CLIP)

JASSY: We think it's integral for the Department of Defense to have access to the most sophisticated cutting-edge technology that exist. Period!

HARLOW: Does having that much power give you pause?

JASSY: We have over 3,000 government agencies using AWS in a significant way. That's a significant responsibility. We're aware of that.

(BEGIN VIDEO CLIP)

HARLOW: But most Americans are not aware of the extent to which our government, our economy, and our homes now rely on Amazon.

REID: Alexa, popcorn.

ALEXA: Starting popcorn. HARLOW: Although a vastly different kind of technology, Alexa, like the Cloud, has unleashed its own revolution.

(END VIDEO CLIP)

REID: We launched with 13 skills. Now we have over 80,000 skills. Alexa can actually just do over a million things.

(BEGIN VIDEO CLIP)

HARLOW: Toni Reid has been with Amazon for 21 years, and headed Alexa's introduction to the world.

(END VIDEO CLIP)

HARLOW: You have said that voice is the technology that, in your words, we didn't know we needed. Why?

REID: It's so natural. This is our natural user interface.

WEBB: Voice is going to quickly emerge as one of the primary ways that we interface with machines. And this is happening faster than a lot of analysts even projected.

(BEGIN VIDEO CLIP)

HARLOW: Alexa, tell me the news on CNN.

(END VIDEO CLIP)

WEBB: What it means is that we are talking more than we're typing. And if it's the case, then we have a very close and personal relationship with these companies.

(BEGIN VIDEO CLIP)

HARLOW: But how close is too close and who exactly is listening?

REID: Alexa, stop.

(END VIDEO CLIP)

HARLOW: What does and doesn't Alexa record?

REID: Alexa only records after she hears the wake word.

HARLOW: Who at Amazon hears what I tell Alexa when I'm talking to her?

REID: A small group of annotators who do some ground truthing. They take very small subsets, it's - it's de-linked from customer data, to help train the models that go back into improving speech technology.

ANTHONIO PETTIT, WRITER & DATA ACCOUNTABILITY CONSULTANT, ACCOUNTABLE OBJECTIVITY MOVEMENT FOUNDER: There are people on the other end.

(BEGIN VIDEO CLIP) HARLOW: Anthonio Pettit is one of them. During his seven-month contract at Amazon, Pettit analyzed Alexa commands gone wrong, in order to improve the technology. He now works in Artificial Intelligence at Microsoft.

(END VIDEO CLIP)

PETTIT: Amazon is listening to what you tell Alexa, not in any type of nefarious way, to my knowledge. I believe that everything that they do is based on quality assurance. But people should know that. I think that that is something that is definitely not advertised.

HARLOW: What do you say to those folks who think "Oh my Gosh, someone's listening to me?"

REID: I think it's important for customers to understand that we're not listening to them. It's a very, very small percentage that is - is carved off for ensuring that the models are doing what the models say that they're supposed to do.

(BEGIN VIDEO CLIP)

HARLOW: But if you're one of the estimated 66 million Americans who use a voice assistant speaker, you know that voice technology today is far from perfect.

(END VIDEO CLIP)

HARLOW: Many people have heard the story of the couple's conversation, they got recorded without them triggering Alexa with the key word, and actually emailed the - to a - to a contact of theirs. How does something like that happen?

REID: In that particular case, Alexa did what it thought the customer was intending Alexa to do. And, in the end, we still got it wrong. There are defects for us. And we try to learn from those.

HARLOW: Is there a day that you foresee where you can 100 percent guarantee that won't happen again?

REID: There's no technology that works a 100 percent of the time. We should strive towards that, which we are.

[21:35:00] HILL: I think the problem is the law. We have a very weak legal framework around privacy that doesn't give consumers a lot of rights. Unless you're monitoring the traffic, monitoring your network, you can't really know what's happening in the background. You have to trust what the company is telling you it's doing.

HARLOW: Should people trust that if parts of their conversation are listened to that it won't be used against them in some way that they don't authorize?

REID: Absolutely.

(BEGIN VIDEO CLIP) HARLOW: Next.

BEZOS: The most important thing that we've done over the last 20 years is earn trust with customers.

HARLOW: But is that trust in Amazon eroding?

CICILLINE: I think they have monopoly power.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BEZOS: I think the most important thing that we've done over the last 20 years is earn trust with customers. We've worked hard to do that.

(AUDIENCE CLAPPING)

HARLOW: Today, Americans trust Amazon with just about everything.

(END VIDEO CLIP)

GALLOWAY: You're a consumer. It's hard not to love Amazon.

(BEGIN VIDEO CLIP)

HARLOW: According to a 2018 study, Amazon is the second most trusted institution in the country, second only to the U.S. Military.

(END VIDEO CLIP)

HARLOW: Is there any sign that that trust is eroding?

GALLOWAY: I think there's a general erosion of trust across all of big tech.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (D-VT) PRESIDENTIAL CANDIDATE: Companies like Amazon that made billions in profits did not pay one nickel in federal income tax.

JULIAN CASTRO (D) PRESIDENTIAL CANDIDATE: How is it that Amazon is paying less in taxes than you and your family?

[21:40:00] HARLOW: Technically, it's more complicated. Amazon does pay state taxes, and it has paid federal taxes in the past, but it's also taken advantage of billions in corporate tax breaks.

(END VIDEO CLIP)

WILKE: We pay all the taxes we're required to pay. We paid $2.6 billion in cash taxes in the last three years. If last year, we paid no tax in the U.S., it was because the law required us to pay no tax. Since 2011, we've invested $200 billion in the U.S. in infrastructure for fulfillment, and delivery, and data centers, and solar farms, and wind farms that these are exactly the kind of investments that the tax code was intended to stimulate. But the result of it is that it's a - that ends up being a deduction that means we didn't pay any tax last year.

(BEGIN VIDEO CLIP)

HARLOW: But it's not just taxes that have critics questioning Amazon's business practices.

(END VIDEO CLIP)

LINA KHAN, ACADEMIC FELLOW AT COLUMBIA LAW SCHOOL: The Antitrust laws are really focused on promoting competition.

(BEGIN VIDEO CLIP)

HARLOW: In 2017, Yale Law student, Lina Khan published "Amazon's Antitrust Paradox," a paper in the Yale Law Journal that reframed the national conversation on Antitrust law in America.

(END VIDEO CLIP)

KHAN: When you have a situation when a single company is effectively able to set the terms of the marketplace, that's a situation where I think we should worry about the market not being competitive.

(BEGIN VIDEO CLIP)

HARLOW: Critics argue that Amazon's platform has become so dominant anyone looking to sell products online is practically forced to sell there.

(END VIDEO CLIP)

MITCHELL: If you want to reach consumers online, and you're not selling through Amazon, you're giving up half the market right out of the gate.

(BEGIN VIDEO CLIP)

HARLOW: Questions have also been raised about the data Amazon collects from all of its marketplace sellers.

(END VIDEO CLIP)

MITCHELL: We see Amazon mines their data, watches what they're selling well, and then become a seller in that category itself. It's a very difficult environment in order to succeed in.

(BEGIN VIDEO CLIP)

HARLOW: But Jeff Wilke, the man in charge of the Amazon Marketplace sees it much differently. (END VIDEO CLIP)

WILKE: We don't use any data about specific items that's not available to the world by just looking at - at our website.

(BEGIN VIDEO CLIP)

HARLOW: Which may be true, but Amazon knows how to access and analyze its data better than anyone else.

(END VIDEO CLIP)

HARLOW: Does Amazon give priority to and prioritize its private label in search?

WILKE: We prioritize the things that customers want.

(BEGIN VIDEO CLIP)

HARLOW: In a recent hearing on Capitol Hill, an Amazon attorney went a step further and categorically denied the claim.

NATHAN SUTTON, ASSOCIATE GENERAL COUNSEL, LITIGATION & REGULATORY AT AMAZON.COM: We do not use their individual data when we're making decisions to launch private brands. Our incentive is to help the seller succeed because we rely on them.

HARLOW: Third-party vendors now make up more than half of Amazon's online sellers, helping to fuel its marketplace dominance.

(END VIDEO CLIP)

WILKE: Worldwide retail is something like $30 trillion. We are about 1 percent of that.

HARLOW: You're about 1 percent of worldwide retail, but you're about 50 percent of U.S. e-commerce.

WILKE: What's interesting to me is no customer that I've talked to, wakes up in the morning, and says, "What am I going to buy from e- commerce today?" and then says, "What am I going to buy from the store today?" They say "What do I need?" or "What do I want?"

HARLOW: What do you say to folks who say "Well, I like Amazon. It's super convenient. But it did kill mom-and-pop shops?"

WILKE: I - actually I don't think it killed mom-and-pop shops. There's plenty of evidence that there are mom-and-pop shops thriving online and offline too.

(BEGIN VIDEO CLIP)

HARLOW: But according to a study by the Institute for Local Self- Reliance, 90 percent of more than 850 small businesses surveyed say Amazon has had a negative impact on their revenue.

(END VIDEO CLIP)

MITCHELL: We've seen this sharp decline in the number of small businesses across a lot of different industries. We're now creating new businesses at about one-third the rate that we were in the 1980s.

(BEGIN VIDEO CLIP)

HARLOW: And Washington has started to take notice. The Justice Department announced it is conducting a broad Antitrust review of the online marketplace, while Congress has also launched its own investigation of big tech--

CICILLINE: We welcome everyone to our first--

HARLOW: --including Amazon.

(END VIDEO CLIP)

CICILLINE: I think they are behaving like a monopoly. I think they have monopoly power.

(BEGIN VIDEO CLIP)

CICILLINE: The internet has become increasingly concentrated.

HARLOW: Congressman David Cicilline is leading the top-to-bottom Antitrust probe.

(END VIDEO CLIP)

CICILLINE: Congress doesn't have the ability to break up companies. I know that people have been suggesting that. But we can set the statutory framework and provide the resources and the regulatory guidance to make sure that competition exists in all of these spaces.

(BEGIN VIDEO CLIP)

HARLOW: Regulators in Europe have had their eyes on big tech for some time.

MARGRETHE VESTAGER, EUROPEAN COMMISSIONER FOR COMPETITION: Amazon now has to repay the tax benefit.

[21:45:00] HARLOW: This past July, the E.U.'s top Antitrust Official, Commissioner Margrethe Vestager formally launched an investigation of Amazon's marketplace.

So, I asked Jeff Wilke, the CEO of Consumer for Amazon, flat-out, does Amazon give priority to its private label in search, and he said to me, "We prioritize things that customers want."

VESTAGER: We don't take what you say for granted. We really want to see the evidence. A lot of people would want to sell what people want, not only Amazon. So, of course, we would like to see well how does this dual relationship work that you're both a host and a competitor? And - and that is the key question here. (END VIDEO CLIP)

HARLOW: So, if you're Jeff Bezos, how freaked out would you be about European regulators right now?

GALLOWAY: Well I think they are suitably freaked out.

HARLOW: So, you think that Amazon should be broken up?

GALLOWAY: Oh, a 100 percent.

WILKE: We have intense competition everywhere in the world, in every one of our businesses. So, I - the main question for me is why?

HARLOW: Is Amazon too big?

JASSY: I don't think Amazon is too big. And I think if you look at most of the business segments, in which we operate, we are a relatively small percentage of the total market segment.

HARLOW: What do you make of the calls to break up Amazon?

DIMON: I think that's a silly idea and concept. Amazon is doing a lot of good things for a lot of people. That's not a problem. They have a lot of competitors.

(BEGIN VIDEO CLIP)

HARLOW: One of those potential competitors is Jamie Dimon, CEO of America's largest bank.

(END VIDEO CLIP)

HARLOW: Jeff Bezos tried to hire you.

DIMON: Yes. We first had lunch, and we just hit it off, and we've been friends ever since.

HARLOW: Are you more partners or competitors with Amazon?

DIMON: We're - we're partners. We do business together, you know.

HARLOW: I know.

DIMON: We have the Card (ph) together. We do a bunch of stuff.

(BEGIN VIDEO CLIP)

HARLOW: Since 2002, JPMorgan Chase has partnered with Amazon on a consumer credit card. Yet, Dimon remains acutely aware of Amazon's ability to disrupt new markets.

(END VIDEO CLIP)

HARLOW: You did create a team, I think it was 2017, to essentially think about Amazon. DIMON: It was all of them like - like--

HARLOW: OK, all the internet giants.

DIMON: All of them. If we were them, if they were us, what would you do, how'd you look at it? What can they do to compete? How might we want to partner?

(BEGIN VIDEO CLIP)

HARLOW: Competitor, partner, or both, Dimon warns that the days of an unregulated tech industry may be numbered.

(END VIDEO CLIP)

HARLOW: What's coming?

DIMON: I'm not warning them like they're bad. I'm saying that you better get ready for this. If they're not geared up for that, and I - but I think they're - honestly, they are gearing up for it, they should be.

(BEGIN VIDEO CLIP)

HARLOW: For his part, Jeff Bezos seems confident in his company's ability to battle whatever storm may be coming.

BEZOS: We are so inventive that whatever regulations are promulgated or however it works, that will not stop us from serving customers.

ALEXA: Have a good weekend.

(END VIDEO CLIP)

[21:50:00] (COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HARLOW: In the midst of historic Hollywood, Amazon is the new kid on the block.

(END VIDEO CLIP)

HARLOW: Where are we? This is iconic.

HART: Culver Studios. This is the Gone with the Wind house.

HARLOW: And it is now the home of Amazon Prime Video.

HART: It is the home of Amazon Studios, exactly.

(BEGIN VIDEO CLIP)

HARLOW: Greg Hart is the Worldwide Vice President of Prime Video, Amazon's video streaming service.

(MUSIC)

(END VIDEO CLIP)

HARLOW: Who came up with that idea to create the video?

HART: Jeff said what if we licensed a bunch of content and made it available at no additional charge to Prime members? And everyone sort of looked at each other, and looked at him, and thought, "OK, that's an interesting idea." People may come for the shopping but they stay for the entertainment.

HARLOW: Is the goal to win Oscars or to sell more paper towels?

HART: I think the goal, first and foremost, is to delight our customers. And so, people who engage with Prime video, they convert from free trials to paid membership at a higher rate. They renew their memberships at a higher rate, and they shop more.

HARLOW: Did you know it was going to work?

HART: Of course, not.

(BEGIN VIDEO CLIP)

(AUDIENCE APPLAUSE)

BEZOS: This phone is gorgeous. I can't wait for you to get your own hands on it.

HARLOW: But in Jeff Bezos' mind, any risk on behalf of the customer is a risk worth taking.

BEZOS: When we make mistakes, and we've made doozies like the Fire Phone and many other things that just didn't work out, I can - I could live - we don't have enough time--

UNIDENTIFIED MALE: Right.

BEZOS: --for me to list all of our failed experiments. But the big winners pay for thousands of failed experiments.

HARLOW: Back in 2009, Hart, who has been with Amazon since 1997, got a behind-the-scenes take on how the Amazon Founder thinks, spending two years in a coveted role as Bezos' shadow.

(END VIDEO CLIP)

HARLOW: What's the most important lesson Jeff Bezos taught you during that time?

HART: The incredibly high standards that he has for what Amazon is capable of and what the people that work at Amazon are capable of.

HARLOW: Like you think the bar is high, it can be higher?

HART: Exactly. (BEGIN VIDEO CLIP)

BEZOS: The secret sauce of Amazon, the number one thing that has made us successful, by far, is obsessive-compulsive focus on the customer as opposed to obsession over the competitor.

(END VIDEO CLIP)

DIMON: When you look at Amazon and Jeff, they're always it - that is so paramount, and - and, you know, transcends almost all of the things. So, yes, you learn from that.

HARLOW: Has he affected the way you run your bank?

DIMON: Oh, sure. If you made a bunch of products and services, where you click on and then you have to wait a second, and--

HARLOW: Right.

DIMON: --we didn't really think about it very much until I was reading something about Amazon. I said, "My God, we're just - we're going to be much faster."

HARLOW: We're too slow.

DIMON: We're too slow.

(BEGIN VIDEO CLIP)

HARLOW: Well that exacting culture has brought Amazon extraordinary customer satisfaction. It has also brought on harsh criticism from some of its workers.

(END VIDEO CLIP)

PETTIT: The culture is competitive and - and - and cutthroat, I would say.

(BEGIN VIDEO CLIP)

ALEXA: Mount Everest's height is 29,029 feet.

HARLOW: Anthonio Pettit worked on a seven-month contract for Amazon's Alexa team.

(END VIDEO CLIP)

PETTIT: Not a lot of care seems to be taken to ensure that, you know, people aren't just burning out, working there. That's what I see not always taken into account is the - the cost of having this convenience is oftentimes built on the backs of the people who are working at Amazon.

HARLOW: Talk a little bit about the culture. There was that 2015 New York Times article about culture here at Amazon, and employees saying that it can be cutthroat, and that it can be relentless. When you read that what did you think?

JASSY: I think it was quite skewed. And I think that if you have a company with several hundred thousand people, like we do, if you want to write a certain perspective, or find some people to support it, you can really write almost anything you want.

(BEGIN VIDEO CLIP)

[21:55:00] HARLOW: But The Times interviewed more than 100 current and former Amazon employees, including Executives across departments, describing quote, "Sometimes punishing aspects of their workplace." Complaints have also come from workers at fulfillment centers.

(END VIDEO CLIP)

REY: These jobs, hard.

You know, these people are standing in the same spot for eight, 10 hours a day during - maybe during a peak season. There are complaints about limited breaks. There are complaints about just the quotas and the goals.

(BEGIN VIDEO CLIP)

HARLOW: Just this past July, warehouse workers in Minnesota launched a Prime Day strike during one of Amazon's busiest days of the year.

(AMAZON WAREHOUSE WORKERS PROTESTING VIDEO)

(END VIDEO CLIP)

HARLOW: You're aware of some of the criticism that some Amazon employees have brought against the company, from poor working conditions, to increased pressure, the time, "Get it done. Get it done. Get it done." What's your response to that?

WILKE: That doesn't, in total, describe the - the experience that - that I helped to build.

One of the things that we did was bring the safety programs from the best manufacturers in the world into retail, which - which hadn't been done before. The benefits that our folks in the warehouses and fulfillment centers get are the same benefits that my family has access to.

(BEGIN VIDEO CLIP)

HARLOW: Amazon also raised wages in 2018 for all U.S. workers to at least $15 an hour, following pressure from lawmakers, including Congresswoman Alexandria Ocasio-Cortez, and Senator Bernie Sanders, who at the time praised Amazon's decision.

SANDERS: I want to give credit where credit is due. And I want to congratulate Mr. Bezos for doing exactly the right thing.

HARLOW: In Bezos' words, "We listened to our critics." Critics have also called on Amazon to increase diversity at its highest levels of leadership.

(END VIDEO CLIP)

HARLOW: Would Amazon arguably be even more successful if it had more women, more minorities, near the top?

STONE: I mean no doubt. Women are - are the primary shoppers that - that it's a huge part of their business until the fact that it hasn't been male-driven organization probably does create some blind spots.

CAST: If you look below Jeff's leadership level, there are very, very influential, important women. But do we want and need more? Absolutely, and especially in the pockets where we know we can improve.

(BEGIN VIDEO CLIP)

HARLOW: Improving and maintaining Amazon's company culture has kept many employees like Andy Jassy from ever leaving.

(END VIDEO CLIP)

JASSY: I've been at the company for 22 years now. And I would tell you that the culture is the primary reason I - I remain here. It is a place where you're encouraged to think creatively, where there is no ceiling to what you can pursue, where we're willing to make big investments, and make big bets, and - and commit to - to them for long periods of time.

(BEGIN VIDEO CLIP)

HARLOW: A uniquely Amazonian culture made possible by Bezos' relentless focus on the future.

BEZOS: I get to invent, I get to live two to three years in the future.

(END VIDEO CLIP)

HARLOW: Is there something about Jeff Bezos that makes him markedly different than almost any other leader on the planet?

DIMON: You know you become a real outlier when you're good in three or four or five different things. You know, he ended up being a great inventor, a great thinker, a great team-builder, and obviously very flexible. That's kind of rare.

(BEGIN VIDEO CLIP)

HARLOW: Coming up, how Amazon transformed Seattle.

UNIDENTIFIED MALE: I think you'll find a lot of people here will be very angry at Amazon.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[22:00:00]

POPPY HARLOW, CNN HOST: In downtown Seattle, you can hardly turn a corner without seeing or hearing Amazon's impact.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Amazon has taken over.

UNIDENTIFIED FEMALE: I call it Amazon Ville.

FMR. MAYOR MICHAEL MCGINN (D) SEATTLE: In 2010, you know, I think we had 30 percent unemployment in the construction cranes. And we had no cranes. I think people were saying, boy, wouldn't it be nice to have some cranes? By 2013 people were saying what's up with all the cranes?

HARLOW: But first many cranes as there are in Seattle today, there are just as many perspectives on what Amazon's growth has meant for the city.

UNIDENTIFIED MALE: Amazon has impacted us in a positive way.

UNIDENTIFIED FEMALE: It's a positive and a negative.

UNIDENTIFIED FEMALE: Jobs. Opportunity.

UNIDENTIFIED MALE: I think it's beautiful.

UNIDENTIFIED FEMALE: Does nothing to help the city at all.

UNIDENTIFIED MALE: It's growing fast.

UNIDENTIFIED FEMALE: Just takes and takes and takes.

MCGINN: I think you'll find a lot of people here will be very angry at Amazon.

HARLOW: Mike McGinn was elected mayor of Seattle in 2009. Right as Amazon's downtown expansion was accelerating.

MCGINN: We all knew there was going to be an expansion, but I think, we said, boy, they might go from 5,000 employees to 20,000. But they went to 45,000.

HARLOW: After losing a re-election bid in 2013, McGinn ran for mayor again in 2017 and lost to a candidate who received money from a PAC supported by Amazon.

Isn't Amazon largely responsible for much of the job growth during your term as mayor?

MCGINN: Actually, we saw job growth in many places and, again, that's a positive. We wanted that job growth. HARLOW: But a lot from Amazon.

MCGINN: Sure. It's a lot from Amazon.

JON SCHOLES, PRESIDENT & CEO, DOWNTOWN SEATTLE ASSOCIATION: Amazon's growth in Seattle has been good for business, been good for the flower shop, the barbershop. There's a ripple effect that creates economic opportunity for others.

HARLOW: Opportunity, however, not shared by all.

UNIDENTIFIED FEMALE: It's greatly impacted the cost of living with rent. Especially. Pushing people out, especially from neighborhoods like this.

UNIDENTIFIED MALE: From a business point of view, I realized the wheels of progress have to keep turning. On the other side, it does not make the people who are being pushed out feel very good about it.

SCHOLES: Got a big imbalance in Seattle between the number of jobs that we've created and welcomed here and the amount of housing that we built so when you have that imbalance, you're going to get an affordability crisis. We have one today in Seattle.

HARLOW: Since 2010, the number of homeless in Seattle has increased nearly 34 percent. To address the crisis, the city council proposed a head tax in 2017 that would tax Seattle's biggest companies $275 per employee. But heavy resistance from Amazon and the Seattle business community led that same city council to reverse its decision, ultimately killing the funding measure.

ANDY JASSY, CEO, AMAZON WEB SERVICES: I would say that, you know, things like the head tax in Seattle I think are super dangerous for cities to implement.

[22:05:02] HARLOW: They fought it.

MCGINN: They fought it hard. And they won.

KSHAMA SAWANT, COUNCILMEMBER, SEATTLE: It is no surprise to me that Amazon bullies its was --

UNIDENTIFIED MALE: Council member Sawant.

HARLOW: Kshama Sawant is a city council member and one of the few elected socialists in the country. She was a leading voice in the movement to pass Seattle's minimum wage increase in 2014. And most recently --

SAWANT: Our modeling to dodge Amazon and other big corporations --

HARLOW: -- a vocal proponent of the head tax.

SAWANT: Amazon has got to pay. Amazon has got to pay.

It's very clear to ordinary people in Seattle that we need a tax on big businesses like Amazon. Big business, big tech, big developers, make all the profits and are making life unlivable for the rest of us in this city.

HARLOW: Do you think Amazon's done enough to cushion the impact of its growth on home prices in Seattle?

JEFF WILKE, CEO WORLDWIDE CONSUMER, AMAZON: Well, first of all, our objective was to take care of customers so if we've been successful at that, which means we've needed to hire more employees and build out our headquarters, that's a good thing.

It's not like we built this headquarters under a shroud and ripped it off and said, you know, ta-da. This was built over years. So, the community had the time with us to, you know, to plan for this growth. I believe that we'll -- the city of Seattle working with us, we'll get this right. We want to be a great corporate citizen.

HARLOW: In addition to Mary's Place, a permanent homeless shelter set to open inside one of Amazon's new buildings, Amazon announced $8 million more in donations to homeless charities. Still, some say, for one of the richest companies in the world, it needs to do more.

SAWANT: They are going to do what they want for their bottom line. If you want something that is socially beneficial, we are going to have to fight for it as ordinary people. I mean, look at what happened in New York City.

HARLOW: In the fall of 2017, Amazon decided it wanted a new place to call home, a second North American headquarters. And in typical Jeff Bezos fashion, they weren't just going to pick a city like most companies. Amazon would hold a year-long competition but the seemingly irresistible prize, Amazon's HQ2 and the potential for 50,000 new jobs.

FMR. GOV. BRIAN SANDOVAL (R) NEVADA: Much like Amazon, Las Vegas is truly unique.

HARLOW: After a 14-month search and more than 200 bids from cities across the country --

(BEGIN VIDEO CLIP)

JAKE TAPPER, CNN HOST: New York and Virginia were the big winners of the Amazon HQ2 hunger games.

UNIDENTIFIED FEMALE: Eye-popping incentives for Amazon including a helipad at its planned New York location.

(CROWD CHANTING)

(END VIDEO CLIP)

HARLOW: But in Queens, New York, the winners high wore off quickly. Days after the announcement, vocal residents, union and community leaders, led protests over the $3 billion tax break for their new neighbor. UNIDENTIFIED MALE: We're New Yorkers. You can't walk all over us.

BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Because of the noise from lawmakers, Amazon kind of decided to turn the car around. That it wasn't worth this fight.

HARLOW: Three months later, Amazon abruptly canceled its plans for New York's HQ2.

(BEGIN VIDEO CLIP)

MAYOR BILL DE BLASIO (D-NY), PRESIDENTIAL CANDIDATE: We got a call this morning saying we're taking our ball and we're going home. I've never seen anything like it.

REP. ALEXANDRIA OCASIO-CORTEZ (D-NY): I think it's incredible. I mean, it shows that everyday Americans still have the power to organize and fight for their communities.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: I think it's a big loss for New York City.

STELTER: I think if anything, Amazon came away looking even more powerful. They were able to say no to New York City.

HARLOW: Plus, Amazon wasn't exactly walking away empty handed.

UNIDENTIFIED MALE: They now have access to some --

HARLOW: All this data.

UNIDENTIFIED MALE: All this data.

UNIDENTIFIED MALE: Frisco is prime to have you.

STACY MITCHELL, CO-DIRECTOR, INSTITUTE FOR LOCAL SELF-RELIANCE: There are over 200 cities across the country that bid on the HQ2, and they put together these big packages of all of this information. Things like where are future infrastructure investments going to go, what's the distribution of our population that has different kinds of education degrees?

So now Amazon has this information about all of these different cities and it's going to put that to really prodigious use in the coming years as it thinks about where to put a new warehouse or a new office or a retail store. No one else has that.

HARLOW: Coming up --

(BEGIN VIDEO CLIP)

TRUMP: I wish them luck. It's going to be a beauty.

(END VIDEO CLIP)

HARLOW: Amazon, Jeff Bezos, and the other Washington. DONALD GRAHAM, OWNER & CHAIRMAN, GRAHAM HOLDINGS COMPANY: I think

ownership of the Post has risks for Amazon as well as benefits.

[22:10:00] (COMMERCIAL BREAK)

HARLOW: It was 2013 and one of the country's leading newspapers was in serious trouble.

GRAHAM: The 2008 financial crisis was devastating. We'd been through a lot of recessions, but we'd never seen anything like this.

The Washington Post had been owned by the Graham family since 1933 but now it was struggling to survive.

GRAHAM: I was trying to figure out how a newspaper that had been successful in print could be successful in the digital world.

HARLOW: So, Don Graham, chairman of the Post at the time, talked to everyone he could in Silicon Valley.

GRAHAM: I talked to Steve Jobs. I talked to Gates. I talked to Mark Zuckerberg. I talked to the founders of Google. I talked to Jeff. Over and over again. I remember that it was smart, sensible, and not full of himself.

HARLOW: Bezos came with the influential endorsement of Warren Buffet.

GRAHAM: Warren at that time was on our board. And Warren said Jeff Bezos is the best CEO in the United States.

HARLOW: Really?

GRAHAM: Yes.

HARLOW: Graham made an offer and Bezos took it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: In a surprise move the Washington Post is being sold to the founder and CEO of Amazon.com, Jeff Bezos.

JEFF BEZOS, CEO, AMAZON.COM INC.: It is the newspaper in the capital city of the most important country in the world. The Washington Post has an incredibly important role to play in this democracy. I know that when I'm 90, it's going to be one of the things I'm most proud of.

HARLOW: But skeptics wondered if Bezos had a different strategy at play.

[22:14:57] SCOTT GALLOWAY, PROFESSOR OF MARKETING, NYU STERN SCHOOL OF BUSINESS: I think his intentions are good. Republican billionaires buy football teams. Democratic billionaires buy newspapers.

But it's also a pretty decent heat shield and prophylactic against antitrust because if a liberal newspaper is not in favor of antitrust against Bezos, it's just a fantastic way to put sheep's clothing around a wolf.

HARLOW: And over the next five years, Bezos invested even more in the nation's capital, purchasing the largest home in the city, choosing its suburbs for Amazon's second headquarters, and spending more on lobbying than any other tech company so far this year.

STELTER: Amazon is one of the single most influential companies in Washington.

HARLOW: Do you think owning the Washington Post has given Bezos more clout among the political class here in Washington?

GRAHAM: No. As the owner of Amazon, Jeff could hardly have more clout if he wanted to exercise it. But I see no evidence that Jeff is using the Washington Post to advance any political interest.

HARLOW: And current executives at the Post have stated repeatedly that Bezos is not involved in any editorial decisions.

Has it ever been a concern for you at all that the interest of Amazon could have motivated the purchase of the Post?

GRAHAM: I suppose that's possible but I think ownership of the Post has risks for Amazon as well as benefits. The risk is that when the Post writes a negative article about a politician, about a government, it can make people unhappy.

(BEGIN VIDEO CLIP)

TRUMP: I think the Washington Post is a Russian asset. It's put there for the benefit, the Washington Post, of Amazon. That's my opinion and I think it's a disgrace.

(END VIDEO CLIP)

HARLOW: President Trump has made a habit of hurling unsubstantiated allegations at Amazon and Bezos on Twitter, accusing him of lobbying through the Washington Post. Calling the paper fake news and claiming Amazon is scamming the U.S. Postal Service.

What started the beef between President Trump and Jeff Bezos?

STELTER: I think fundamentally this is about the Washington Post, it's a very influential newspaper. It's a paper that covers Trump very critically, and rightly so. As a result, Trump lashes out.

GRAHAM: I have seen other presidents do the same thing.

(BEGIN VOICE CLIP)

RICHARD NIXON, FORMER PRESIDENT OF THE UNITED STATES: From now on, no reporter from the Washington Post is ever to be in the White House. Is that clear?

(END VOICE CLIP) GRAHAM: There was a man named Richard M. Nixon who was very direct and very personal in what he felt about the Washington Post so President Trump is doing what an awful lot of politicians have done over the years.

HARLOW: Earlier this year Trump also took aim at Bezos' personal life after the National Enquirer leaked revealing text messages between Bezos and the woman he was seeing just one day after he'd announced his separation from his wife, Mackenzie. President Trump weighed in.

(BEGIN VIDEO CLIP)

TRUMP: I wish him luck. It's going to be a beauty.

(END VIDEO CLIP)

HARLOW: Bezos wrote in a medium post that he suspected politics might be in play in the Enquirer's reporting.

STELTER: And he wanted to say so publicly. The Enquirer came to him and said we have all these photos and we could share it unless you stop accusing us of political motivations. So, the magazine wanted to shut Bezos up.

HARLOW: But instead, Bezos released e-mails from the Enquirer to his team and accused them of blackmail and extortion.

BRAD STONE, AUTHOR, THE EVERYTHING STORE: I was shocked. I think a lot of people around him were shocked, you know. This is not someone whose personal life had drawn a lot of attention.

HARLOW: No.

STONE: And that was a situation that was extraordinary.

HARLOW: In a statement, the tabloid told CNN, quote, "The National Enquirer acted lawfully and stands by the accuracy of our reporting."

STELTER: I think to this day it is still a mystery about exactly what happened with the Enquirer.

HARLOW: Yet the scandal placed Bezos in an entirely new light.

STONE: I think he thought and probably believed pretty strongly that he was doing the right thing. By confronting this - this abusive media power.

GALLOWAY: I think it was handled brilliantly. And I think there's a reservoir of goodwill towards Jeff Bezos because he's been seen as a responsible steward of the Washington Post. So, I think his personal reputation has probably never been stronger.

HARLOW: The medium post I think that surprised everyone with very serious allegations of blackmail. I'm interested if that has affected Amazon at all and if it has changed at all how he leads Amazon. WILKE: It hasn't changed how he leads. Jeff is as engaged as he's

been for years. His ideas are just as clever. I've watched him give messages to our teams, and all-hands meetings, and smaller group messages, and the messages are spot-on. They're aligned with our culture and our leadership principles. He's the same Jeff that I've worked alongside for 20 years and I hope he stays the same Jeff.

[22:10:01] HARLOW: Coming up, the future of Amazon.

AMY WEBB, AUTHOR, THE BIG NINE: It's plausible that Amazon will pretty soon know you better than your spouse does, better than your kids do, better than you know yourself.

(COMMERCIAL BREAK)

UNIDENTIFIED MALE: Ten, nine, eight, seven, six, five, four, command start.

HARLOW: In 2015 --

UNIDENTIFIED MALE: Engine running.

HARLOW: -- Jeff Bezos took a giant leap into a new frontier.

UNIDENTIFIED MALE: And liftoff.

HARLOW: Jeff Bezos recently said that Blue Origin, his space venture, is the most important thing he's working on. Why?

STONE: Because I think he thinks of it as a long-term solution for humanity's biggest problems.

(BEGIN VIDEO CLIP)

BEZOS: It's time to go back to the moon, this time to stay.

(END VIDEO CLIP)

HARLOW: Bezos is now spending a billion dollars a year of his own money exploring space. And while his rocket ships don't say Amazon today, that may change sooner than we think.

UNIDENTIFIED MALE: And liftoff.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Think we'll ever have Amazon fulfillment centers on the moon?

BEZOS: That's a very good question.

(END VIDEO CLIP)

HARLOW: Amazon recently won a patent for a floating warehouse that could store drones 45,000 feet into space. One of many strangers than fiction ideas Amazon has in the works. [22:25:02] WEBB: They're deep in research now on recognizing not only

who you are but what you are in that moment in time.

HARLOW: According to Bloomberg, Amazon is working on a wearable device that can read human emotions.

UNIDENTIFIED MALE: Voice profiles give you the ability to teach Alexa your voice.

WEBB: Using a baseline of your biometrics --

UNIDENTIFIED MALE: Alexa, close the shades, please.

WEBB: You know, are you depressed?

UNIDENTIFIED FEMALE: Alexa, tell Roomba to start cleaning.

WEBB: Are you happy?

UNIDENTIFIED MALE: Alexa, what time is it?

WEBB: Are you manic? Have you had a stroke and don't realize it yet? Do you have early onset Parkinson's?

UNIDENTIFIED FEMALE: Alexa, turn the TV on.

WEBB: These are all discoverable if there's a big enough database of your voice.

UNIDENTIFIED FEMALE: Alexa, tell my coffee machine to prepare --

STONE: Health care is clearly in the next big business they want to offer. They acquired this company called Pill Pack which distributes drugs.

WEBB: It's your medication made easy.

STONE: They're working on ways to turn Alexa into a doctor in your home.

WEBB: It's plausible that Amazon or any of the other big tech companies will pretty soon know you better than your spouse does, better than your kids or parents do, better than you know yourself. Or you're willing to admit.

GALLOWAY: Amazon knows our food intake. It knows our body mass index because of the clothes we're wearing. It knows if we're in a monogamous relationship. It knows how many kids we have.

HARLOW: The question is, what is Amazon doing with all that information?

WILKE: When you search for something, artificial intelligence is making the search result better than it used to be. When we show you the list of recommendations that are personalized for you, that result is improved by artificial intelligence. HARLOW: A.I. has also improved Amazon's long-awaited drone delivery

system.

WILKE: You have to be really good at this so that customers can trust it completely. Regulators can trust --

HARLOW: You have to make the drone even smarter.

WILKE: Yes. Sixty to 80 percent of the items that we shipped could be shipped by the drones that we're working on.

HARLOW: But all of that convenience, experts say, could come at exponentially higher cost to our privacy.

WEBB: In the case, for example, of Amazon, Amazon has incredibly powerful image recognition technology.

UNIDENTIFIED MALE: People really love this image recognition service.

WEBB: At the moment, we don't have any caselaw that answers the question, who owns your face?

HARLOW: Yet, Amazon's facial recognition software is already being used by law enforcement across the country, drawing criticism from the ACLU.

UNIDENTIFIED MALE: Let's think about what those powers cold mean in the hands of the government.

HARLOW: And Amazon's own employees who say the powerful technology must be carefully regulated before it's put to broad use.

You have been pretty open about the fact that this is a service that could do harm, in your words. There have been concerns about racial and gender discrimination. How do you protect against that?

JASSY: We give pretty clear guidance to the law enforcement agencies that they should only use the predictions that come back from our facial recognition technology if they have confidence levels of at least 99 percent and then only as one element of a human-driven decision.

But I also understand why people are concerned and I also think that it's very reasonable for governments to put regulations in place that provide extra guidelines for how the technology should be used.

HARLOW: But what if the problem is not the user but the artificial intelligence taking over all of big tech and its potential for bias?

WEBB: Women of color are far more likely to have the secondary screening at an airport than men or Caucasian women because you look like an anomaly to a system that for the most part was built by a whole bunch of people who maybe aren't racist but never occurred to them --

HARLOW: A whole bunch of white men. WEBB: Correct.

HARLOW: One reason another tech giant, Google, has been hesitant to bring this technology to market so swiftly.

Google has chosen, at least for now, not to sell facial recognition technologies while your competitors like Amazon are moving full steam ahead.

SUNDAR PICHAI, CEO, GOOGLE: We realize there are potential cases in which there isn't a clear regulatory framework around how technology can be used. That gives us pause.

UNIDENTIFIED MALE: As opposed to some companies who are backing away from supporting the government, we are unwavering in our support to serve government.

HARLOW: Is it worth to given what Amazon has brought to the world?

GALLOWAY: So, the question is, is Amazon a net good? A 100 percent yes, but the problem is with the word, "net." Fossil fuels are a net positive for society but we still have emission standards. Pesticides are a net positive for us but we still have an FDA.

Amazon has been a net positive. Does that mean they shouldn't be broken up when they become noncompetitive? No, they should be broken up.

[22:30:04] WEBB: I would argue that if you force these companies to break apart, you could say that that's a national security issue because, quite frankly, we all rely on these companies. We need Amazon, we need Google, we need Apple, we need Microsoft. So the question is, where do we go from here?

BEZOS: My view on this is very simple: all big institutions of any kind are going to be, and should be, examined, scrutinized, inspected.

UNIDENTIFIED MALE: We've got customers to serve.

HARLOW: Twenty-five years since the age of Amazon began, Bezos's bookstore is an American institution. And scrutiny is exactly what it's getting.

REP. DAVID CICILLINE, D-RI: So you're telling us here, under oath, that Amazon doesn't use any of that data to favor Amazon products.

HARLOW: From its ever-expanding size to its impact on the planet. Yet nothing is slowing Amazon down.

(on camera) Is it unparalleled?

JAMIE DIMON, CHAIRMAN AND CEO, JP MORGAN CHASE: There's only a handful of so many things that have grown like this, and been in so many businesses, and invented so many things, and invented their own technolopgy to accomplish what they want to do. It's still a growing machine. WEBB: Jeff Bezos is a visionary. And you can question whether or not every decision being made is in the right one for what's in the best interest of humanty, but I cannot think of very many other people alive or in recent history that are as capable or as gifted in long- range thinking as Bezos is.

BEZOS: We're now big enough to hurt this planet. We have to use the resources of space. When that is possible, when the infrastructure is in place, just as it was for me in 1994 to start Amazon, you will see amazing things happen. And it will happen very fast. I guarantee it.

END

[22:30:00]