Behind Enemy Lines

By Matthew Gutierrez and Shawn O'Malley · April 18, 2024

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Mortgage rates, oh how they climb, like a vine reaching for sky’s sublime. Seven percent, a lofty peak, causing homebuyers’ knees to grow weak.

From late 2023, they've seen no rest, surging higher, putting wallets to the test. With each tick upwards, a sigh and a groan.

Uncertainty looms, like clouds in the air. Changes to commissions, causing some scare. But fear not, dear reader, for knowledge is key. In this financial dance, we'll help you see.

— Matthew & Shawn

Here’s today’s rundown:

Today, we'll discuss the biggest stories in markets:

• Amazon goes undercover to gather intel
• Sweden’s stock market, the envy of Europe

This, and more, in just 5 minutes to read.

POP QUIZ

Average long-term mortgage rates in the U.S. just hit their highest level in 5 months — what level are they at? (The answer is at the bottom of this newsletter).

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In The News

??? Amazon Goes Undercover to Gather Intel on Competitors

A company called Big River Services International, based in Seattle's Denny Triangle neighborhood, has been operating for nearly a decade, shipping a variety of goods like shoes, beach chairs, and Marvel T-shirts to customers across the U.S.?

The company sells about $1 million worth of goods annually through platforms like eBay, Shopify, Walmart, and Amazon under brand names like Rapid Cascade and Svea Bliss. While presenting itself as an independent e-commerce operation, Big River is actually a covert arm of something quite familiar to all of us: Amazon.?

The mission: Gather intelligence on competitors.

Behind enemy lines: Established as part of a 2015 initiative named "Project Curiosity," Big River uses its global sales to collect pricing, logistics, and other strategic information about rival e-commerce platforms. The data is then shared with Amazon to inform its business decisions.?

• Despite Amazon's claims of focusing solely on customer satisfaction and not paying attention to competitors, Big River's activities reveal Amazon's elaborate efforts to stay ahead in the ultra-competitive e-commerce market it has largely dominated for the better part of two decades.
• Big River team members even engaged with companies like FedEx, attending meetings under the guise of being Big River employees and not disclosing their affiliation with Amazon. Then Amazon brought back the information to improve its logistics.?

A big secret: The team behind Big River attended competitor conferences incognito, used non-Amazon email addresses, and took measures to keep their project secret within Amazon. Despite these efforts, there were oversights, like a glaring typo on the Big River website and team members listing Amazon as their employer on LinkedIn, compromising their cover.

Why it matters:

A few reasons.?

• Amazon is the largest U.S. e-commerce company, accounting for nearly 40% of all online goods sold in the U.S., according to research firm eMarketer.
• We also have to imagine other big companies doing undercover work in ways big and small. After all, U.S. capitalism can be brutal—firms look for any edge they can get.
• Companies can run into legal trouble for actions such as hiring a rival’s former employee to obtain trade secrets or hacking a rival. Misrepresenting themselves to competitors to gain proprietary information can lead to lawsuits on trade secret misappropriation.

While benchmarking and competitor research are common business practices, Big River's secretive operations raise...