Amazon has a policy against using seller-specific data to “aid [its’] private label business,” but Jeff Bezos said on Wednesday that he “can’t guarantee” that such a policy has “never been violated.” The Amazon founder and CEO was questioned about whether the company ever accesses and uses the data of third-party sellers on its sweeping marketplace platform, including data on popular products, by the House of Representatives Judiciary Committee as part of an anti-trust probe by the government. Facebook CEO Mark Zuckerberg, Google CEO Sundar Pichai, and Apple CEO Tim Cook also testified before the House committee (via video conference) on Wednesday.
The line of questioning, which came from Representative Pramila Jayapal, whose congressional district includes Amazon’s headquarters of Seattle, follows directly from an April 2020 article published by the Wall Street Journal, citing former employees and a current employee that said that executives at the $1 trillion dollar e-commerce titan “had access to data containing proprietary information that they used to research best-selling items they might want to compete against, including on individual sellers on Amazon’s website.”
Speaking specifically to the article, Bezos said, “I’m familiar with the Wall Street Journal article that you’re talking about, and we continue to look into that very carefully. I’m not yet satisfied that we’ve gotten to the bottom of it, and we’re going to keep looking at it. It’s not as easy as you would think because some of the sources in the article are anonymous, but we continue to look into it.” At the same time, Bezos emphasized that Amazon’s policy against using seller data for the benefit of its growing arsenal of private labels “is voluntary,” and noted that he does not think any “other retailer even has such a policy.”
The Journal’s investigation centered on “a bestselling car-trunk organizer sold by a third-party vendor,” which Amazon employees “accessed documents and data about,” including “total sales, how much the vendor paid Amazon for marketing and shipping, and how much Amazon made on each sale.” As the publication’s Dana Mattioli wrote this spring, “Amazon’s private-label arm later introduced its own car-trunk organizers.”
Presumably, such a pattern could very well span the more-than-100 brands that Amazon current boasts – from its Amazon Basics collection to the buzzy skincare brand Belei that it launched in 2019 – and come at the expense of merchants selling similar products on its marketplace platform. This is part of the equation that that legal minds, including this site, have pointed to in recent years in regards to potential claims of antitrust involving Amazon, particularly as the giant has continued to build troves of data on third-party products and sales, which it can use to “hone its own competitive pricing strategy, gain information about consumers to make its own marketing more effective, and give its own goods an advantage,” as the Journal put it.
In a written statement, Amazon said in response to the report that “like other retailers, we look at sales and store data to provide our customers with the best possible experience. However, we strictly prohibit our employees from using non-public, seller-specific data to determine which private label products to launch.”
While Amazon has largely downplayed the success of its private labels, telling the Journal that sales tied to its in-house brands “account for 1 percent of its $158 billion in annual retail sales (not counting Amazon’s devices such as its Echo speakers, Kindle e-readers and Ring doorbell cameras),” its model has, nonetheless, caught the eye of regulators in the U.S. and beyond. This past summer, for instance, right around the time that Amazon’s associate general counsel Nate Sutton told the House of Representatives Antitrust Subcommittee that Amazon “does not use individual seller data directly to compete” with businesses on the company’s platform, European Union authorities initiated a formal antitrust investigation into Amazon, with the European Commission probing the company to determine whether its use of sensitive data from independent sellers on its massive third-party marketplace runs afoul of the EU’s competition rules.
The company is expected to be served with “a formal antitrust complaint in the coming weeks from the EU Commission” – the EU institution tasked with proposing legislation, implementing decisions, upholding the EU treaties and managing the day-to-day business of the 27-member bloc – “amid concerns the U.S. retail giant may be shortchanging smaller merchants who sell on its marketplace,” per Bloomberg.
More recently, Amazon came under the microscope of Italy’s antitrust authority in connection with its alleged pattern of preventing unauthorized parties from reselling certain products on its sweeping online marketplace. In a statement this month, the Italian Competition Authority confirmed that it is investigating Amazon and Apple in order to determine whether Apple and Amazon maintain an “anti-competitive agreement to prevent electronics retailers not included in Apple’s official program to sell” goods from its Beats headphones brand.