Shopifreaks E-commerce Industry News Recap ?? Week of Feb 24th, 2025

Hi LinkedIn - I'm Paul Drecksler and I follow the e-commerce industry closely for my Shopifreaks E-Commerce Newsletter.

This is a summary recap of the 214th Edition published Feb 24th, 2025. Check out the full edition for links and sources and subscribe here.

STAT OF THE WEEK: OpenAI's weekly active users surpassed 400 million in February, while its paying subscribers crossed the 2 million threshold, more than doubling from its last update in September.

President Trump is considering moving the US Postal Service under the control of his administration by terminating the service's governing board members and placing the agency under the control of the Commerce Department and Secretary Howard Lutnick, according to a Washington Post report. Members of the bipartisan board are appointed by the president and confirmed by the Senate. The White House denies the Washington Post report, however, the USPS board is taking the rumor seriously enough that it's already retained outside legal counsel. Their plan is to sue the White House if Trump were to remove members of the board or attempt to alter the agency's independent status.

Amazon shut down Inspire, a TikTok-style shopping feed inside its mobile app that the company launched in 2022. To be honest, Inspire was doomed from the start. Back in December 2022 I wrote: “A big difference though between Inspire and those other apps is that users are gravitating towards TikTok and IG for all sorts of entertainment — not just shopping — and then discovering products as part of the overall experience. Whereas Inspire is a predominantly product-based feed with no other types of entertainment.” That's where Amazon went wrong with Inspire. It was “un-inspired” from the start.

Apple is no longer offering its end-to-end encrypted iCloud storage, Advanced Data Protection, to new users in the UK, and will require existing users to disable the feature at some point in the future, following UK security agencies requesting backdoor access to worldwide users' encrypted backups. Apple launched ADP in 2022, allowing iCloud data including file backups and photos to be protected with end-to-end encryption, which means they can only be decrypted by the person who owns the device. Even Apple claims it doesn't have a key. Removing ADP means that users’ files in the UK will be accessible to Apple, and shareable with law enforcement, though that would still require a warrant. To clarify one thing… Apple isn't entirely disabling encryption. It's merely being downgraded to standard encryption in the UK, which still keeps things safe in transit, only now, Apple holds the decryption keys, which it can hand to the UK government.

Klaviyo announced the launch of what it calls the “the only customer relationship management (CRM) platform built for consumer brands.” Klaviyo B2C CRM will comprise of several solutions including a customer hub for shoppers to track orders, manage subscriptions, and discover new products, a marketing analytics platform, expanded marketing tools, and custom objects (coming soon) which are a new way to store and use customer data like loyalty status, pets, or past purchases to make marketing more personal. As a reminder, Shopify is a 45% owner in Klaviyo, and this new B2C CRM tool will fit nicely with its ambitions to attract more enterprise merchants.

Apple told the White House that it will make an additional $500B of investments in the US, hoping in exchange for relief from President Trump's tariffs on goods imported from China. Those investments include hiring 20k new workers, building a new server manufacturing facility in Houston, expanding data center capacity at existing US facilities, opening a manufacturing academy in Detroit to help smaller companies with manufacturing, and doubling its manufacturing fund in the US to $10B. The disclosure comes days after Trump and Apple CEO Tim Cook met in the Oval Office. Following the meeting, Trump said that Apple was making the investment because of “faith in what we are doing.” However Apple didn’t clarify whether the newly announced investments were already underway before Trump’s tariffs were announced.

Affirm and Shopify announced an expanded partnership, cementing the BNPL provider's position as the “exclusive pay-over-time provider” for Shop Pay Installments in the US. The agreement also extends this exclusivity into Canada, with plans to enter the UK on the horizon. This collaboration will enable Shopify merchants in Canada to offer Shop Pay Installments powered by Affirm at checkout in the coming months, with the option to to select from customized biweekly and monthly payment plans. In 2020, Affirm partnered with Shopify to power Shop Pay Installments in the US, which has apparently been a success. Affirm also powers BNPL for Amazon, Walmart, Target, eBay, Lowes, and many other major e-commerce platforms and marketplaces. Does it ever feel like all the major retailers are collectively setting up Affirm to be left holding the bag on the inevitable BNPL consumer debt crash that's coming?

Amazon will discontinue its app store for Android on August 20th, according to a notice the company sent developers. The company also said it would be discontinuing its Coins digital currency, which could be used to purchase games and apps on the app store. Amazon Appstore also works on Windows devices, allowing users to install Android apps on their PCs, but the company already announced last year that it will discontinue support for its app store on Windows starting March 5, 2025. Moving forward, after August 20th, the Amazon Appstore will only work on Amazon's own Fire devices. It's an interesting moment in history to shut down one of the only alternative app stores to Google Play and Apple App Store that had any existing traction, in light of recent regulatory changes in the European Union mandating that Google and Apple permit alternative app stores on their platforms to foster competition and provide consumers with more choices. You'd think that this would be the exact moment for Amazon to double down on its app store efforts and cement its position amongst developers, while bridging a gap between its AI efforts and mobile devices.

In other Amazon shut downs this week… the company sunset Chime, it's underwhelming Zoom and Google Meet alternative that launched in 2017 with a focus on business usage. Chime had little adoption outside of Amazon, which largely contributed to its shutdown, according to an Amazon spokesperson.

And now a bunch Meta news (including a ton of lawsuits)....*

Instagram?is?rolling out updates?to its direct messaging service, including message translation (a feature Facebook Messenger has had since 2018), music stickers, and the ability to schedule messages. Additionally, group chats will be assigned a QR code that can be shared to invite other folks to join.

Facebook?announced?that live videos will only be stored on the platform for 30 days, previously having been stored indefinitely. All the videos that are currently older than 30 days will be removed from the platform as well as part of the change, however, before the videos are deleted, users will receive a notification and be given 90 days to download their videos or convert the content into a reel.

Meta?is?hosting?its first-ever?“LlamaCon”?conference on April 29th, where it will share updates on open source AI developments to help developers create apps and products. The company also announced the dates of its annual Connect conference, which will be held this year on September 17th and 18th.

Meta?settled its Israeli privacy lawsuit?for $338,000, which alleged that the company collected and used phone numbers provided for two-step verification for other purposes. The plaintiffs and Meta reached a settlement without Meta admitting the claims, and last week, the Central District Court approved the agreement. Wow, Meta got off cheap!

Meanwhile in the US…?Meta is?urging a federal judge?to throw out a lawsuit by two Facebook users who say they lost money after responding to fraudulent ads on the platform. The users claim in a class-action complaint that Meta violated its terms of service by failing to remove deceptive ads that were placed by outside companies. Meta countered by claiming that its TOS impose rules on users, but don't create “affirmative obligations” on the company.

Meta?has been hit?with a new privacy lawsuit for allegedly collecting location data about Facebook users via tracking software embedded in thousands of mobile apps. California resident Lisa Tsering alleges in a class-action complaint that Facebook collects the data through a software development kit that “enables backdoor access to consumers' devices and opens a direct data collection pipeline” to the company, and that Meta is violating a California anti-hacking law by accessing consumers' mobile devices without their permission, as well as violating state restrictions on collecting metadata associated with electronic communications.

Meta?is?cracking down?on users buying and selling Instagram accounts and unauthorized account reinstatement services via two separate lawsuits, marking the first time the company has taken this type of legal action in the US. One suit alleges that a photographer named Daniel Folger sold Instagram usernames at prices ranging from $700 to $50,000, and cites documentation of content posted to his accounts, including a list of usernames for sale. A second suit is against Idriss Qibaa for allegedly selling unauthorized Instagram reinstatement services and fake engagement services intended to artificially inflate followers of Instagram users.

Meta?approved executive earning bonuses?of up to 200% of their salaries after posting strong Q4 earnings, increasing its “target bonus percentage” for execs from 75% of their base salary to 200% of it. The bonus increase comes just one week after Meta laid off 5% of its workforce, or around 3,600 employees, for being “low performers” — in case you were wondering where the bonus money came from.

Meta?is?setting up a new office?in Bengaluru, India and currently hiring for 41 positions, primarily between software and machine learning engineer jobs, according to its careers webpage. The new center is part of Meta’s Enterprise Engineering team, which focuses on custom internal Meta tools, rather than Meta's public-facing products like Facebook and Instagram.

Meta CEO Mark Zuckerberg?lobbied US senators?on AI intelligence last week, seeking to earn a voice in any potential AI regulation, given that he's spending $65B on AI this year. Zuckerberg has previously pledged to work with Trump to “push back on governments going after American companies and pushing to censor more,” hoping for support from the White house as the company faces a regulatory crackdown in Europe.

Adidas?is the?latest enterprise retailer?to add?Amazon's Buy with Prime?option to its website and app, which means Prime members can receive Amazon's fast & free shipping right from Adidas' storefronts. Other big retailers to use Buy with Prime include Steve Madden, Belkin, Elizabeth Arden, Crocs' HeyDude, MrBeast, and recently Fossil.

Walmart?introduced a new internal tool?called?Wally?that helps its merchandisers quickly access and analyze relevant product information using generative AI. Wally uses a familiar chat-style interface to retrieve relevant data from Walmart's extensive databases and then generates quick answers, tables, or full reports as needed. Wally has also been given access to merchandizer training material, allowing it to make recommendations and interpret data in line with that internal guidance.

The UK's Competition and Markets Authority?is?investigating?Apple?and?Google?to determine how they use their operating systems, apps, or browser technology to give their own mobile wallets preferential treatment after receiving concerns over how the two companies can steer consumers to their own wallets because of the control they have over their own tech. The complaint also claims that the two companies limit less costly card alternative payment options such as account-to-account payments and digital currencies.

Twenty-three state attorneys general?joined a lawsuit?fighting the shutdown of the?Consumer Financial Protection Bureau, arguing that closing the agency would harm consumers and make consumer protection laws harder to enforce. The filing follows a move by the Trump administration earlier this month that froze the CFPB’s enforcement activity and halted its future funding. New York Attorney General James Letitia James said, “The CFPB has put billions of dollars back in the pockets of Americans by going after predatory lenders, deceptive companies, and slashing junk fees. The only reason to get rid of this watchdog agency is to protect bad actors.”

The?FTC,?under its new leadership, is?opening an inquiry?into whether a wide range of online services including Meta and Uber censor users, which FTC Chair Andrew Ferguson describes as “un-American” and “potentially illegal.” Historically courts have given social media companies broad leeway to remove content from users as they see fit, and it's unclear how Ferguson plans to use antitrust and consumer protection laws to combat online censorship.?

TikTok?launched a custom ad solution?called?Automotive Ads?to help auto sellers tap into the potential of its audience. The ads are designed to help match users with the right car or offer based on their in-market activity. Everybody wants a piece of the online auto sales market! In December 2024, I reported that Amazon launched “Amazon Autos” to enable car sales on its platform in partnership with US dealers, and last month I reported that eBay announced its acquisition of Caramel, a platform that facilitates car sales for private sellers and independent dealers.?

TikTok?plans to?begin tracking?how long its US e-commerce workers are in the office, requiring eight hours a day, five days a week. According to an internal memo, workers are expected to be tracked each time they use their badge to enter or leave office buildings to keep tabs on their hours.

Speaking of return to office mandates…?Downtown Seattle is?apparently popping again?as of last month, inching closer to pre-pandemic norms, ever since Amazon mandated that employees return to office 5-days a week. In January, downtown Seattle recorded the second-highest daily average for weekday worker foot traffic since March 2020, and additionally saw 2M visitors on its sidewalks.

TikTok?is?laying off global staff?at its trust and safety unit, which handles content moderation, as part of a restructuring, according to Reuters sources. In January 2024, TikTok CEO Shou Chew testified before Congress that the company would spend more than $2B on trust and safety efforts, however, it's unclear if these layoffs impact that pledge.

YouTube?is?bringing back?its Premium Lite tier, which the company axed in 2023, that lets viewers watch ad-free videos without paying extra for a music subscription. The package will be announced soon in the US, Australia, Germany, and Thailand, with plans to expand to additional countries in the future, and will cost roughly half of what YouTube Premium currently costs in each country.

X?has been threatening?major advertising agencies, including?Interpublic Group, to increase spending on the platform, or face the consequences of Elon Musk’s influence in Washington. Interpublic leaders interpreted recent communications from X as reminders that the recently announced $13B deal to merge Interpublic with rival Omnicom Group could be torpedoed by the Trump administration, given Musk’s powerful role in the federal government. Interpublic recently signed a new annual deal with X for potential client spending, but the company said, “We do not make spending commitments on behalf of our clients to any partner or platform, and decision-making authority always rests with the client.”

Hoan Ton-That, the former CEO and later President of Clearview AI, a facial recognition startup used by law enforcement and federal agencies to identify suspects,?resigned from the company, but will remain a board member. Clearview appointed early investor Hal Lambert and cofounder Richard Schwartz as co-CEOs in December after Ton-That shifted roles from CEO to president.?

Kiren Tanna, cofounder and CEO of?Una Brands, a Singapore-based e-commerce aggregator,?stepped down?after four years serving in the position. Tanna said in a?LinkedIn post?that he plans to spend more time with his family and “explore new ideas at the intersection of consumer and AI while working with founders and the venture ecosystem as an advisor – particularly in company building, fundraising, GTM/expansion strategies, and scaling businesses.” Cho Weihao, the company's CFO, assumed the role.

Michaels?brought on?David Boone?as its new CEO, succeeding Ashley Buchanan who became CEO at Kohl's in January after Michaels announced his departure in November 2024. Boone previously served as interim CEO at Essendant, a business and industrial supplies distributor, and before that served as CEO at Staples Canada.

Some eBay sellers in Canada?failed to receive payouts?due to them on Feb 4th for over two and a half weeks, with eBay support informing them that it's a glitch that may take 30-60 days to resolve. Sellers reported that they were finally paid, but eBay has not yet issued any official announcement in regards to what happened, leading some to speculate that there could be a larger issue in play that eBay is trying to keep quiet.

The?SEC?agreed to drop its lawsuit?against?Coinbase?with prejudice, meaning it cannot be filed again, in a move that some say is a signal that the Trump administration plans to be more crypto-friendly than the previous administration. The lawsuit, filed back in 2023, alleged that crypto assets were securities and that Coinbase was operating as “an unregistered national securities exchange, broker, and clearing agency.” Coinbase spent $50M fighting back, arguing that the SEC hadn't established clear enough rules concerning crypto in order to sue over breaking them. That's actually a pretty good argument.?

SellerX, a Berlin-based aggregator of Amazon brands, is?laying off 20% of its workforce, or around 170 employees, in an attempt to cut costs. In September 2023, BlackRock announced that SellerX had defaulted on its €500M loan, leading to an attempted auction that was later canceled in favor of a debt-equity swap, converting its debts into shares. SellerX's CEO Olivier Van Calster said that BlackRock is “100% behind the new strategy,” which involves cost cutting, layoffs, and reducing the number of brands in its portfolio from 67 to 19.?

The EU’s AI Act?left a major legal gap?in copyright protection, according to some experts, sparking concerns among writers, musicians, and creatives who fear their work is being exploited by generative AI without proper safeguards. Axel Voss, a key architect of EU copyright law, criticized the legislation for failing to enforce strong copyright protections, calling the omission “irresponsible” and warning that the AI Act’s text and data mining exemption is being misused by big tech to harvest intellectual property at scale. Some argue that the AI Act prioritizes corporate interests over creators’ rights, with no practical means for artists to opt out or track how their work is used, prompting calls for new legislation to close the loophole.

Inside Retail and?Australia Post?released their 10th annual?Australia's Top 50 People in E-commerce report, featuring the top innovators shaping Australia's e-commerce scene. The finalists were recognized for their contributions to enhancing customer experience, expanding into international markets, and incorporating generative AI technology into their operations.

Protector, an app that describes itself as “Uber with guns,” has?gone viral?amongst people who can't afford it. The app, which allows clientele to hire an armed bodyguard on demand and claims that every guard is either active duty or retired law enforcement and military, launched in Los Angeles and New York. The annual membership fee is $129 and the rate to book a bodyguard is at least $1,000 for a five-hour minimum.

?? This week's award for most ridiculous story…?HP artificially, unnecessarily, and assholingly?added 15 minutes of wait time?to support calls, hoping customers would hang up instead. Do companies actually believe that I am?willingly?calling them as my first attempt at support? That I've not already read through their outdated documentation, used their crappy AI bot, read through Reddit posts, and asked ChatGPT,?before?employing my last resort option of picking up the phone and calling them like it's Seinfeld-era? Yikes, HP. Luckily they?ditched it after 3 days?due to “feedback” — which really means “negative press attention” in corporate jargon.

Plus 12 seed rounds, IPOs, and acquisitions of interest including Humane, the consumer electronics company infamously known for its AI Pin, being acquired by HP for $116M for some reason, which is less than half of the $240M it raised in VC funding, after unsuccessfully seeking a valuation between $750M and $1B since May 2024.

I hope you found this recap helpful.

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See you next week!

Paul Drecksler