Fuel to fire.
Jeff Bezos has admitted that Amazon may have used the data of third party sellers to benefit Amazon itself. This admission adds fuel to the PR fire already raging against Amazon over a series of stories since lockdown.
Many forget that Amazon is a marketplace platform. So they don’t just sell products themselves, but also host and deliver on behalf of third party sellers.
Amazon has previously come under fire for exploitative business practises. These include everything from treatment of staff, data usage and irresponsible management of fraudulent activity on the site.
The admission comes as Bezos faces congress, (alongside Facebook and Google bosses) about antitrust. This is the most scrutiny the tech industry has had to face since 2000.
Going over the fence?
Bezos is being questioned over a report claiming Amazon had used seller data to copy bestselling products. The company is accused of producing their own, cheaper versions of products and undercutting third party sellers.
The information was uncovered in an investigation by the Wall Street Journals. They report that Amazon executives have access to seller data which outlines best selling items. Amazon’s terms prohibits using third party seller data.
However, Amazon executives are using a work around to produce copycat items and sell them through Amazon. This practice is referred to as ‘going over the fence’.
Bezos said: “We have a policy against using seller-specific data to aid our private label business. But I can’t guarantee you that that policy has never been violated.”
Bezos says that he is looking into the report’s findings.
What does this mean for Amazon?
The subcommittee is examining the actions of tech giants amid a crisis of faith in the big four (Facebook, Google, Apple, Amazon). Each are under fire for dubious business practices, including treating staff poorly and data misuse.
The hearing is grappling with the question over whether tech giants have become too powerful. With some wondering whether they are so big they need dismantling.
For example Amazon is involved in at least seven consumer industries. Their delivery services alone have a major impact on postal services. The company almost has a monopoly on home delivery of goods as their prices undercut the brands they sell.
History repeats itself.
The evidence being presented and gathered against the companies is the biggest tech industry examination since 2000. The last time there was an inquiry of this breadth Microsoft were facing claims of abusing their monopoly in the market.
As a result of the 2000 case Microsoft were ordered to share some of it’s software with third party companies. This was decided in a bid to reduce the monopoly Microsoft had over the market.
Popular opinion is not with Bezos right now. It is reported that his wealth has increased by $24 billion as a result of increased sales during the pandemic. This news comes during mass job losses as a result of COVID, with millions facing destitution. Not to mention the reports of poor COVID safety measures for staff in Amazon warehouses.
Google, Facebook and Apple bosses also face tough questions on their companies. The hearings are ongoing so it remains to be seen how this will affect the big four.