The Amazon logo displayed on a smartphone and a PC screen.
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LONDON — Amazon will start selling home insurance in the U.K. through partnerships with three local insurers, further expanding the e-commerce titan’s push into financial services.
The company announced Wednesday it is opening a new service called Amazon Insurance Store.
The product will show shoppers quotes for policies from insurance providers including Ageas, Co-op and LV+ General Insurance, with Amazon pocketing a commission on each sale from its partners. It is similar to offerings from price comparison sites like Comparethemarket and Moneysupermarket.
Customers who want to apply for home insurance on Amazon can do so by filling out a questionnaire, which asks them questions on their home insurance needs. They’re then shown a list of quotes from Amazon’s insurance partners, along with reviews and star ratings from other customers. Once a user decides on which policy they want to go with, they pay for it using Amazon’s own online checkout. The service is initially rolling out to a few select customers but will be available across the U.K. by the end of 2022.
“Finding the right home insurance policy can be a time-consuming and confusing task, with quotes that often leave out essential coverage in order to lead with the lowest price,” said Jonathan Feifs, general manager of Amazon’s European Payment Products, in a press release Wednesday. “When we set out to create the Amazon Insurance Store, we wanted to improve the experience for customers shopping for home insurance so they could easily compare options and make an informed, objective decision—just like shopping on Amazon.”
Feifs added that the launch was “just the beginning,” suggesting Amazon may expand into other insurance categories over time. It’s the first time the company has launched a store selling insurance. Amazon’s earlier insurance products include product warranty and third-party seller insurance.
It marks the latest foray by Amazon into the world of finance. The company already offers lines of credit to merchants selling items on its platform. It also offers buy now, pay later loans — which allow shoppers to pay off purchases over monthly installments — in the U.S. through a partnership with fintech firm Affirm, and in the U.K. with banking giant Barclays. Last year, the company launched insurance for small and medium-sized business customers in the U.K.
Ben Wood, an analyst at research firm CCS Insight, said the move showed how Amazon is “reinvigorating its efforts to further diversify its business as we emerge from the pandemic and pressure grows on its traditional activities.”
The company “has a wealth of consumer data that it can use as it ventures into new areas,” Wood told CNBC, adding: “Whether this is relevant to this foray into home insurance is unclear, but the value can’t be underestimated as it expands its its business in the future.”
Amazon saw sales on its site boom after the 2020 Covid-19 outbreak, which drove shoppers online as they were restricted from being able to go outside. However, shares of the company have fallen over 30% this year, with higher interest rates hammering tech stocks and investor fears of softening e-commerce sales as the cost-of-living crisis dents sentiment. Add to that the fact that Amazon is heading into a bleak holiday shopping season — particularly in the U.K., where officials have warned of blackouts this winter due to disruption to gas supplies caused by the Russia-Ukraine war.
Earlier this year, Amazon increased the price of its Prime subscription service, which offers faster delivery times and TV and film streaming, to $139 from $119 in the U.S., highlighting the challenges posed by supply chain disruptions, labor constrains and high inflation. Prices for Prime in Europe saw even steeper climbs. Higher subscription costs helped boost Amazon’s revenues in the second quarter, which rose 7% to $121.2 billion. Amazon is due to release its third-quarter numbers later this month. In July, the company forecast third-quarter revenue growth of between 13% and 17%.
Amazon’s move into the insurance market comes amid increased hype over so-called insurance technology, or insurtech. Quite a few startups have scored sizable sums of cash from investors with the proposition that insurance is a market in severe need of digitization. Wefox, a German insurtech firm, recently raised $400 million in a round valuing the company at $4.5 billion, for example — 50% higher than its previous funding round, despite a grim fintech funding climate.
A sign is posted in front of the eBay headquarters in San Jose, California.
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Shares of eBay soared 8% Wednesday as Meta said it will allow some listings to show up on Facebook Marketplace, its popular platform connecting consumers for local item pickups and more.
EBay stock reached its highest level since November 2021.
The rollout will begin with a test in Germany, France and the United States, where buyers will be able to view listings directly on Marketplace and complete the rest of their transactions on eBay, Meta said in a release.
The partnership could provide a boost to eBay’s marketplace business, which has struggled to compete with e-commerce rivals like Amazon, Walmart, Temu and even Facebook’s own marketplace platform that lets users buy and sell items.
EBay has recently embraced niche categories like collectibles and luxury goods to try and keep buyers and sellers returning to its site. CEO Jamie Iannone told CNBC in an October interview that shoppers were coming to the site, known for its used and refurbished goods, as they sought out discounts amid a rocky macroeconomic environment.
Meta’s move is an attempt to appease the European Commission, the executive body of the European Union, after the regulator fined the company 797 million euros ($821 million) in November for tying its Marketplace product to the main Facebook app.
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At the time, the Commission said that Meta’s bundling of Marketplace with Facebook could mean competitors are effectively “foreclosed” given the distribution reach of the platform. Facebook counts more than 3 billion users globally.
The Commission also said that Meta imposes “unfair trading conditions” on other online classified ads service providers who advertise on its platforms, especially Facebook and Instagram. It added that these conditions allow Meta to use data generated from other advertisers to benefit Marketplace.
Meta appealed the ruling at the time, saying that it “ignores the realities of the thriving European market for online classified listing services.”
“While we disagree with and continue to appeal the European Commission’s decision on Facebook Marketplace, we are working quickly and constructively to build a solution which addresses the points raised,” the company said Wednesday.
EBay touted its integration with Facebook Marketplace as a way for the e-commerce site to “increase exposure to our sellers’ listings, on and off eBay, as part of our strategy to engage buyers and deepen customer loyalty.”
Facebook in 2023 announced a similar partnership with Amazon that lets users browse and purchase products without leaving the app.
An Amazon employee works to fulfill same-day orders during Cyber Monday, one of the company’s busiest days, at an Amazon fulfillment center in Orlando, Florida, on Dec. 2, 2024.
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Amazon warehouse workers at a site in North Carolina will vote next month on whether to join a union, setting the stage for the company’s latest labor battle.
Workers at the Garner, North Carolina, facility will cast their ballots from Feb. 10 to Feb. 15, according to a Tuesday post on X by Carolina Amazonians United for Solidarity & Empowerment, the group seeking to organize staffers. Representatives from Amazon and the National Labor Relations Board didn’t immediately respond to requests for comment.
Known as CAUSE, the grassroots group led by current and former employees has been working to organize Amazon employees at the warehouse, which is located in a suburb about 10 miles south of Raleigh, for the past three years.
If the election is successful, the warehouse, known as RDU1, would be only the second Amazon site in the U.S. to unionize. Workers at Amazon’s largest warehouse in New York City voted to join the Amazon Labor Union in 2022, but the group struggled to negotiate a contract with Amazon, and last June, the ALU voted to affiliate with the Teamsters.
A handful of union elections were held at Amazon warehouses in the U.S. in recent years but employees have either rejected unionization or the results continue to be disputed in lengthy court battles. Last November, a federal labor judge ordered a third rerun election at an Amazon warehouse in Bessemer, Alabama, after ruling the company improperly interfered in the vote.
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CAUSE filed for a union election last month, saying in a press release that 30% of workers at the North Carolina site signed union authorization cards, which is the necessary threshold to trigger an NLRB vote. Organizers are seeking to boost wages and improve working conditions.
The union filing comes after Amazon delivery and warehouse workers went on strike at nine facilities last month to push the company to come to the bargaining table, according to the International Brotherhood of Teamsters, which represents the employees. The action was intended to snarl Amazon’s operations during the busiest holiday shopping period of the year, referred to as peak season. An Amazon representative told Reuters the company expected to see a limited impact on deliveries from the strike.
An artificial intelligence feature on iPhones is generating fake news alerts, stoking concerns about the technology’s ability to spread misinformation.
Last week, a feature recently launched by Apple that summarizes users’ notifications using AI, pushed out inaccurately summarized BBC News app notifications on the broadcaster’s story about the PDC World Darts Championship semi-final, falsely claiming British darts player Luke Littler had won the championship.
The incident happened a day before the actual tournament’s final, which Littler did go on to win.
Then, just hours after that incident occurred, a separate notification generated by Apple Intelligence, the tech giant’s AI system, falsely claimed that Tennis legend Rafael Nadal had come out as gay.
The BBC has been trying for about a month to get Apple to fix the problem. The British state broadcaster complained to Apple in December after its AI feature generated a false headline suggesting that Luigi Mangione, the man arrested following the murder of health insurance firm UnitedHealthcare CEO Brian Thompson in New York, had shot himself — which never happened.
Apple was not immediately available for comment when contacted by CNBC. On Monday, Apple told the BBC that it’s working on an update to resolve the problem by adding a clarification that shows when Apple Intelligence is responsible for the text displayed in the notifications. Currently, generated news notifications show up as coming directly from the source.
“Apple Intelligence features are in beta and we are continuously making improvements with the help of user feedback,” the company said in a statement shared with the BBC. Apple added that it’s encouraging users to report a concern if they view an “unexpected notification summary.”
The mistake was flagged on the social media app Bluesky by Ken Schwencke, a senior editor at investigative journalism site ProPublica.
CNBC has reached out to the BBC and New York Times for comment on Apple’s proposed solution to its AI feature’s misinformation issue.
AI’s misinformation problem
Apple touts its AI-generated notification summaries as an effective way to group and rewrite previews of news app notifications into a single alert on a users’ lock screen.
It’s a feature Apple says is designed to help users scan their notifications for key details and cut down on the overwhelming barrage of updates many smartphone users are familiar with.
However, this has resulted in what AI experts refer to as “hallucinations” — responses generated by AI that contain false or misleading information.
“I suspect that Apple will not be alone in having challenges with AI-generated content. We’ve already seen numerous examples of AI services confidently telling mistruths, so-called ‘hallucinations’,” Ben Wood, chief analyst at tech-focused market research firm CCS Insights, told CNBC.
In Apple’s case, because the AI is trying to consolidate notifications and condense them to show only a basic summary of information, it’s mashed the words together in a way that’s inaccurately characterized the events — but confidently presenting them as facts.
“Apple had the added complexity of trying to compress content into very short summaries, which ended up delivering erroneous messages,” Wood added. “Apple will undoubtedly seek to address this as soon as possible, and I’m sure rivals will be watching closely to see how it responds.”
Generative AI works by trying to figure out the best possible answer to a question or prompt inserted by a user, relying on vast quantities of data which its underlying large language models are trained on.
Sometimes the AI might not know the answer. But because it’s been programmed to always present a response to user prompts, this can result in cases where the AI effectively lies.
It’s not clear exactly when Apple’s resolution to the bug in its notification summarization feature will be fixed. The iPhone maker said to expect one to arrive in “the coming weeks.”