Ring the doorbell security Company now owned by Amazon was purchased to ‘grab market share’ despite consumers complaints about security and compliance issues it’s been revealed.
Amazon Chief Executive Officer Jeff Bezos apparently went ahead with its acquisition of video-doorbell maker Ring despite issues according to documents revealed overnight.
Four months before Amazon sealed the $1.167 Billion dollar deal in April 2018, Chief Executive Officer Jeff Bezos had recommended buying the company.
It’s been revealed that Amazon executive who at the time were performing due diligence prior to the acquisition, raised concerns about the risks of leaving Ring to operate largely as a standalone entity under Amazon ownership.
Those concerns, which flagged compliance and security standards at the start-up that were below Amazon’s, seemed to preview headlines about sometimes lax cybersecurity protocols at Ring, according to emails disclosed as part of an antitrust investigation by the US House Judiciary Committee.
The antitrust subcommittee of the Congressional panel held a hearing Wednesday where Bezos was questioned as part of an investigation into online Companies.
“My view here is that we’re buying market position — not technology,” Bezos said in an email released by Congressional investigators looking at market power in big tech. “And that market position and momentum is very valuable.”
Today Ring competes head on up against Arlo resulting in Amazon getting a foothold in home-security services and the market for home security cameras.
The acquisition also helped the big retail Company expand their Alexa, voice assistant which Amazon has positioned at the centre of the internet-connected home.
The purchase resulted in a string of negative headlines around privacy concerns and cybersecurity risks, including reporting that employees passed around unencrypted consumer video, and a series of instances in which people reported strangers taking control of their Ring cameras, including speaking to children inside their home Bloomberg claims.
Amazon disclosed in January that Ring had fired at least four employees for improperly seeking access to customer data in the last four years.
Spokespeople for Ring and Amazon didn’t immediately respond to emails and a voicemail seeking comment on the new documents, which offer a detailed inside look at Amazon’s examination of a potential acquisition target.
An executive in Amazon’s corporate development group, Nick Komorous, said the team was suggesting a hands-off approach should it acquire Ring. “Our current integration hypothesis is to do the minimum amount of work to ensure that Darwin’s products are reliable and safe,” he wrote in an email, using an apparent code name for the start-up. “So, the goal would be to keep Darwin as independent as possible under the principle of doing no harm and not slowing them down.”
In one lengthy message, sent to Amazon devices chief Dave Limp and other executives, Rob Stites, who worked on supply chain operations at Amazon’s Lab126 hardware development centre, aired concerns that a potential deal may bring hiccups in integration, citing struggles fellow tech giants Alphabet and Apple, faced after purchasing Nest Labs and Beats Electronics.
“We know that they have limited to no activity around compliance and CSR validation,” Stites wrote, referring to Ring. CSR likely refers to corporate social responsibility, a term that in manufacturing contexts can mean corporate review to make sure products don’t contain conflict minerals and that contract manufacturers follow local labour law.
Another area where Ring might have to change under Amazon’s umbrella: security. “I would be shocked if they didn’t need major work in this area to meet our expectations,” Stites wrote.
He suggested integrating Ring into Amazon’s operations to a greater degree than the company planned at the time. Ring founder and Chief Executive Jamie Siminoff has said he’s a frequent traveller to Amazon headquarters in Seattle, but that his Southern California-based company operates largely independently.
“I am strongly convinced that ignoring all of these areas will just result in a slow and painful migration over time in response to problems,” Stites said in a November 2017 email. He recommended Amazon work to replicate Ring’s technology, which he said lacked a “secret sauce,” instead of shelling out for an expensive acquisition. “I think we could easily replicate all of their hardware to be better, operate in a more secure and robust infrastructure, for a LOT less than the cost of buying them,” he said.