I'm absolutely positive that Amazon's management knows this is a security exploit. But keep in mind that what Amazon publicly states has direct impact on the stock price.
Scenario: Amazon says their website is currently insecure and that they are working to solve the problem. Result: They just admitted that they do not have effective security, therefore they have a system-wide problem, therefore the stock takes a significant hit. And they just opened the door to legal questions about the security of all that private information they already have.
Scenario: Amazon says nothing at all until they have a security fix. Result: Amazon takes a PR hit from the LGBT and civil-rights population, lowering sales, and therefore lowering stock price.
Scenario: Amazon lies about the weak security cause, instead claiming it was a temporary technical glitch. At the same time, they go an review the security system and fix the real problem. Result: LGBT and civil-rights population are still wary but mostly mollified, stop hollering Amazon. Stock market see the issue as a minor loss in sales, and a trivial cost to fix the glitch.
So why would Amazon's executives take the last option? Because in many cases, they are legally required to lie to the public, thanks to fiduciary responsibility. As long as lying isn't done to cover up otherwise illegal behavior, they pretty much must lie to protect the stock price. Sure, some people will see through the lie, but that'll be a tiny fraction compared to the LGBT and civil-rights crowds.
I am not a lawyer nor do I play one on the blogs. However, I'm pretty sure you cannot tell a lie and uphold your fiduciary responsibility. Misleading investors will get you in trouble, civil, if not criminal.
Scenario: Amazon says their website is currently insecure and that they are working to solve the problem.
Result: They just admitted that they do not have effective security, therefore they have a system-wide problem, therefore the stock takes a significant hit. And they just opened the door to legal questions about the security of all that private information they already have.
Scenario: Amazon says nothing at all until they have a security fix.
Result: Amazon takes a PR hit from the LGBT and civil-rights population, lowering sales, and therefore lowering stock price.
Scenario: Amazon lies about the weak security cause, instead claiming it was a temporary technical glitch. At the same time, they go an review the security system and fix the real problem.
Result: LGBT and civil-rights population are still wary but mostly mollified, stop hollering Amazon. Stock market see the issue as a minor loss in sales, and a trivial cost to fix the glitch.
So why would Amazon's executives take the last option? Because in many cases, they are legally required to lie to the public, thanks to fiduciary responsibility. As long as lying isn't done to cover up otherwise illegal behavior, they pretty much must lie to protect the stock price. Sure, some people will see through the lie, but that'll be a tiny fraction compared to the LGBT and civil-rights crowds.
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