Amazon employees say they used data from third-party sellers to help the company make its own competing products (AMZN)
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. Visit Business Insider's homepage for more stories.
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 favor 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 emphasizing 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.SEE ALSO: Selena Gomez filed a $10 million lawsuit claiming a gaming company used her likeness without her consent Join the conversation about this story » NOW WATCH: Pathologists debunk 13 coronavirus myths
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Jeff Bezos says he can't guarantee Amazon's policy against using seller data to dictate its private-label business has never been violated (AMZN)
Jeff Bezos said it's possible Amazon's policy against using seller data to dictate its own private-label...Jeff Bezos said it's possible Amazon's policy against using seller data to dictate its own private-label products has been violated in the past. "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 told Rep. Pramila Jayapal at Wednesday's tech antitrust hearing. Bezos went on to say that the policy itself is "voluntary" in that Amazon chose to create it and that the company treats it "like any internal policy" when it comes to enforcement. A Wall Street Journal investigation from April found that Amazon was using sales data to inform its own product categories. Visit Business Insider's homepage for more stories. Amazon CEO Jeff Bezos admitted that it's possible Amazon's policy against using seller data to inform its own private-label products has been violated in the past. During Wednesday's House Judiciary Committee hearing, Bezos was asked by Rep. Pramila Jayapal about Amazon's private-label business and how it competes with third-party sellers on the platform after a Wall Street Journal investigation from April found that Amazon was using sales data to inform its own product categories. Bezos replied that while Amazon has an internal policy that prohibits that practice, he can't say for sure that the company has never violated its own policy. "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 said. Bezos went on to say that the policy itself is "voluntary" in that Amazon chose to create it — it's not a policy any other retailer has. When it comes to enforcement, Amazon would treat its policy regarding seller data "like any internal policy," Bezos said. Bezos' comments appear to be the first admission of potential wrong-doing when it comes to misusing seller data. Amazon's associate general counsel, Nate Sutton, testified before Congress last July and denied that Amazon utilized individual seller data to compete with vendors on its own platform. When the Journal published its investigation in April, a company spokesperson said that it looks at sales and store data to provide customers with the best experience, but that "we strictly prohibit our employees from using nonpublic, seller-specific data to determine which private label products to launch." Bezos told Rep. David Cicilline that as a result of the Journal's article, the company is investigating any wrongdoing. "I do not want to go beyond what I know right now," Bezos said, but that Amazon is "looking at that very carefully." Join the conversation about this story » NOW WATCH: 7 secrets about Washington, DC landmarks you probably didn't know
House lawmakers said they could subpoena CEO to testify in antitrust investigation if he doesn’t appear...House lawmakers said they could subpoena CEO to testify in antitrust investigation if he doesn’t appear voluntarilyA bipartisan group of House lawmakers investigating Amazon for possible antitrust violations have demanded that Jeff Bezos testify before Congress to address statements by the company that “appear to be misleading, and possibly criminally false or perjurious”. “Although we expect that you will testify on a voluntary basis, we reserve the right to resort to compulsory process if necessary,” seven leaders of the House judiciary committee, including the chair Jerry Nadler, wrote in a letter to the Amazon CEO on Friday. Continue reading...