Amazon used data from its sellers to create competing products: report
Amazon employees used data from independent sellers on the platform to develop competing products, The Wall Street Journal reported Thursday.
That would go against the online retail giant’s oft-repeated assertion that it does not use information from third-party sellers when it makes and sells Amazon products.
The Journal, citing interviews with 20 former employees of Amazon’s private-label business and a review of documents, found that is not the case.
Amazon reportedly used the information from other sellers to price items, determine which features to copy or whether to enter a product segment based on its earning potential.
The company said in a statement that it “strictly prohibits” employees from using nonpublic information when developing other products.
“Like other retailers, we look at sales and store data to provide our customers with the best possible experience,” Amazon told the The Hill. “However, we strictly prohibit our employees from using nonpublic, seller-specific data to determine which private label products to launch.”
Amazon began making its own products in 2007, starting with the Kindle e-reader.
Its private-label business now includes more than 45 brands with roughly 243,000 products, from AmazonBasics batteries to Stone & Beam furniture.
The allegations in Thursday’s report may increase antitrust pressure on Amazon.
The European Union’s top antitrust regulator said last year it was probing whether Amazon was gaining an advantage from its dual role as a marketplace operator and seller of its own products.
The Department of Justice, Federal Trade Commission and Congress are all also conducting antitrust investigations of large technology companies, including Amazon.
House Judiciary Committee Chair Jerry Nadler (D-N.Y.) and Antitrust Subcommittee Chairman David Cicilline (D-R.I.) released a statement Thursday condemning the activity alleged in the Journal’s report.
“If true, this report raises deep concerns about Amazon’s apparent lack of candor before the Committee regarding an issue that is central to our investigation,” Nadler said. “It is deeply concerning that, beginning with the hearing last year, they may have misled Congress rather than be fully forthcoming on this matter, notwithstanding our repeated requests in this regard.”
“According to this report, the company used individual marketplace sellers’ sensitive commercial data for its own benefit to enter markets, reverse engineer products and compete directly with these sellers that rely on Amazon’s platform,” Cicilline added.
“At best, Amazon’s witness appears to have misrepresented key aspects of Amazon’s business practices while omitting important details in response to pointed questioning,” the Rhode Island Democrat said. “At worst, the witness Amazon sent to speak on its behalf may have lied to Congress.”
Updated: 6:35 p.m.
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