Amazon (AMZN -1.35%) has reportedly used data from independent sellers when developing in-house products to hawk on its vast eCommerce platform.
The Wall Street Journal, citing interviews with more than 20 former Amazon employees of its private-label unit and documents, reported the tech stock uses the information in some instances to decide pricing, which features to emulate, and whether or not to enter certain product areas. Those practices fly in the face of what Amazon has long said: it doesn’t use data on third-party sellers to influence the development and production of its own products.
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According to the report, in one case employees used data and documents about a hot-selling car trunk organizer to introduce a competing product. The paper noted Amazon employees looked at total sales, the amount spent on marketing and shipping, and what Amazon made off of each sale. In another example, some Amazon executives were able to get access to data that included proprietary information. The data was then used to research what products are best sellers on the platform to determine if Amazon should launch a competing offering. If managers didn’t have access to the proprietary information, they would ask a business analyst within the organization to create reports with the information included.
In a statement to the WSJ, Amazon said it “strictly” prohibits employees from using nonpublic, seller specific data for private label products. Amazon also said it launched an internal investigation and that if employees engaged in that behavior it was in direct violation of the tech stock’s policies.
Amazon’s private-label business known as AmazonBasics has long been criticized by some of its third-party sellers that argue Amazon favors its products over those of rivals. Its aggressive push to promote its own products has also raised the ire of regulators including the Federal Trade Commission, which is probing its retail and cloud computing practices.
