- Amazon made changes to its product-search algorithm to give top billing to its own brands late last year, according to a Wall Street Journal report.
- The changes to the search algorithm reportedly came after pressure from Amazon’s retail executives, despite objections from its algorithm team and its own lawyers.
- Meanwhile, Amazon faces an ongoing Federal Trade Commission probe into whether the company is using its dominance in online retail to unfairly edge out competition.
- Amazon said in a statement that the Journal’s report was not factually accurate, and that Amazon has not changed the criteria it uses to rank search results to include profitability.
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Amazon is disputing a report that it adjusted its retail search algorithms to favour its own products and listings that would make it the most money.
A bombshell Wall Street Journal report published Monday detailed a shift in Amazon’s algorithm that reportedly occurred late last year. For more than a decade, Amazon’s search listings primarily showed the best-selling and most relevant results. After the algorithm was reportedly changed, search results showed products that would be the most profitable for Amazon, such as the company’s private-label products or third-party listings that would make Amazon more money than its own products.
People who worked on the changes told Journal reporter Dana Mattioli that Amazon’s retail executives pushed for the changes, despite resistance from algorithm developers and the company’s own lawyers.
But on Monday, Amazon issued a strongly worded statement denying the Journal’s report.
“The Wall Street Journal has it wrong,” an Amazon spokesperson told Business Insider. “We explained at length that their ‘scoop’ from unnamed sources was not factually accurate, but they went ahead with the story anyway. The fact is that we have not changed the criteria we use to rank search results to include profitability. We feature the products customers will want, regardless of whether they are our own brands or products offered by our selling partners. As any store would do, we consider the profitability of the products we list and feature on the site, but it is just one metric and not in any way a key driver of what we show customers.”
Amazon now single-handedly controls 36.5% of US online retail sales. Its search bar is the No. 1 way for American shoppers to find products to purchase online, according to data analytics firm Jumpshot.
The retail giant currently faces an ongoing Federal Trade Commission investigation, which is probing whether Amazon uses its dominance to unfairly edge out competitors. Amazon’s own attorneys voiced concern that changes to its search algorithm could violate antitrust laws, according to the Journal.
Amazon CEO Jeff Bezos has attributed the company’s success to its “customer obsession” principle, which touts its devotion to earning customers’ trust. Employees told the Journal they were worried that principle was being violated by the algorithm changes.
Amazon’s private-label business currently represents less than $US2 billion, but is expected to grow to $US31 billion in sales by 2022, according to investment firm Suntrust Robinson Humphrey.