- In a story Thursday from the Wall Street Journal, Amazon employees said they accessed data from third-party sellers to make competing products under the company’s private labels.
- The data employees accessed reportedly allowed Amazon to single out which products had the best earning potential, how to price their private-label products, and what product features they should copy.
- Amazon has long insisted it doesn’t use sellers’ data, a claim it’s reiterated in testimony to Congress in response to multiple antitrust probes.
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Amazon employees say they have used data from third-party sellers to inform their production of competing products, bucking the company’s long-standing claims to Congress and regulators that it doesn’t.
More than 20 former Amazon employees said they had collected and accessed individual sellers’ information to figure out which products they should make under its private labels, according to a report from the Wall Street Journal. One Amazon employee said it was “standard operating procedure” for workers to pull non-public data that could give the company insight on how to price items and which ones would give them the highest earning potential.
These claims are in direct contrast with what Amazon has long insisted. Amazon has consistently denied it engages in the practice of collecting data from third-party sellers, even in response to criticism from politicians and investigations from antitrust regulators. In a hearing in front of Congress in July 2019, an Amazon executive denied that the company used seller data to help favour its own products on the platform.
In response to the story in the WSJ, Amazon told Business Insider the company has launched an internal investigation into the claims.
“We strictly prohibit our employees from using non-public, seller-specific data to determine which private label products to launch,” an Amazon spokesperson told Business Insider. “While we don’t believe these claims are accurate, we take these allegations very seriously and have launched an internal investigation.”
Amazon has responded to past criticism by emphasising that its private-label brands make up only 1% of sales on the platform. However, former executives told the WSJ that they were told Amazon’s private-label brands should make up 10% of retail sales by 2022. Amazon’s private-label business includes more than 45 brands, including AmazonBasics, Amazon Collection, and Amazon Essentials.
Currently, Amazon is fielding antitrust probes over its use of data not only from the Department of Justice and the Federal Trade Commission, but also from the European Union’s competition commissioner.
Amazon dominates the e-commerce marketplace, and accounted for nearly 40% of online sales in the US in 2019, according to eMarketer.
Disclosure: eMarketer is owned by Axel Springer, the owner of Business Insider.