Amazon Restricts How Rival Device Makers Buy Ads on Its Site

Some makers of smart speakers, video doorbells and other hardware hit roadblocks buying key ads in search results on Amazon; gadgets made by e-commerce giant get edge. From a report: Amazon.com is limiting the ability of some competitors to promote their rival smart speakers, video doorbells and other devices on its dominant e-commerce platform, according to Amazon employees and executives at rival companies and advertising firms. The strategy gives an edge to Amazon's own devices, which the company regards as central to building consumer loyalty. It puts at a disadvantage an array of gadget makers such as Arlo that rely on Amazon's site for a significant share of their sales. The e-commerce giant routinely lets companies buy ads that appear inside search results, including searches for competing products. Indeed, search advertising is a lucrative part of the company's business.

But Amazon won't let some of its own large competitors buy sponsored-product ads tied to searches for Amazon's own devices, such as Fire TV, Echo Show and Ring Doorbell, according to some Amazon employees and others familiar with the policy. Roku which makes devices that stream content to TVs, can't even buy such Amazon ads tied to its own products, some of these people said. In some cases, Amazon has barred competitors from selling certain devices on its site entirely. The policies show the conflicts between Amazon's large e-commerce platform for sellers and its role as a product manufacturer in its own right. While traditional retailers buy inventory from manufacturers and resell it to consumers, limiting the number of vendors they can work with, Amazon's platform has more than a million businesses and entrepreneurs selling directly to Amazon's shoppers. Amazon accounts for 38% of online shopping in the U.S. and roughly half of all online shopping searches in the U.S. start on Amazon.com. "News flash: retailers promote their own products and often don't sell products of competitors," said Amazon spokesman Drew Herdener in a written statement. "Walmart refuses to sell [Amazon brands] Kindle, Fire TV, and Echo. Shocker. In the Journal's next story they will uncover gambling in Las Vegas."

As good as Amazon?

[unixcorn]

Amazon is covering all it's bases and, as a business, I guess that's just fine. As a consumer, I have a choice to make. Amazon has a slick website, great tracking and they are fairly responsive when I have an issue with them or one of their vendors. On the other hand, they can be difficult to work with as a vendor (Part of my job is to write code to interface with the Amazon Marketplace) and it's a real turn-off reading articles like this one. Knowing this, I would choose another vendor if the pricing was c

Re:

[sixsixtysix]

Right? The big box retailers had the opportunity to do what Amazon did, all with more money and name recognition, to boot. Only Wal-Mart seems to be trying, albeit a decade+ too late.

Sounds like an anti-trust suit to me

[Anonymous Coward]

You cannot obtain a defacto monopoly and then use that monopoly power to crush your competitors.

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[Cajun Hell]

I'm not necessarily convinced it does it crush competitors, though I guess the proof is in the numbers.

It seems to me that the effects of this would only be noticed by people who browse Amazon or use it to search for products by type, as opposed to people who search for specific products.

e.g. when building a computer, some people might search for SSDs on Amazon, and other people would look on a review site and then just search Amazon for a specific SSD model number.

But I have no idea of what fraction of

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[Sleeping Kirby]

It does:
https://www.vox.com/2017/3/29/... [vox.com]
https://www.wsj.com/articles/a... [wsj.com]
There's been multiple reports that amazon, when it sets it's eyes on someone on marketplace, they'll just duplicate their business, lower the price, place their own marketplace store higher than the business until that business folders. Like short of the online marketplace and copying business, that's textbook Rockefeller

Re: Sounds like an anti-trust suit to me

[kenh]

Refusing competitors advertising space on your own website is not 'crushing' the competition.

Amazon is a retail company, not a publisher.

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[Local ID10T]

It could be anti-trust.

They are not a monopoly, but they are a dominant player in the online-retail market.

It is logical to give higher profit items pride-of-place in your store, but Amazon is not merely a retailer -they are a marketplace operator. They, for a fee, allow others to sell in their marketplace.

They generally sell advertising space in this virtual marketplace that they operate.

Refusing to sell advertising for certain products in order to maintain a competitive advantage for your own products ma

Nope. Not the same thing.

[dgatwood]

What the Amazon spokesperson didn't mention is:

• Walmart and Amazon are competing against one another in their primary business, as resellers.
• Amazon and Roku are competing against one another in Amazon's secondary business, as hardware manufacturers.
• When a company uses its market power in its primary business to harm a company that is purely a competitor in a secondary business, that's a huge antitrust concern.

This would be like Walmart refusing to let products into their store that compete with their Great Value brand. The two behaviors are simply not similar in terms of severity. It's the difference between, for example, Microsoft playing dirty when competing against Apple and when competing against Netscape. Notice which one of those two behaviors got it into trouble with federal regulators.

I smell fear coming out of Seattle in the way that statement was worded. That's all I'm saying.

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[aitikin]

This would be like Walmart refusing to let products into their store that compete with their Great Value brand.

I was with you until that analogy. This is more like Walmart not allowing anything they sell to advertise Amazon products in their stores at all. The appropriate analogous case for Amazon to the one you outline would be them forbidding anyone from selling Roku on their platform, which they clearly don't [amazon.com]

I agree wholeheartedly that this is well into the area of antitrust and should be investigated, but spades being spades and all...

Either way, I appreciate the bluntness and honesty

[raymorris]

Either way, I appreciate the fact that the spokesman didn't say "Amazon is committed to upholding blah blah blah".

"News flash: retailers promote their own products and often don't sell products of competitors," said Amazon spokesman Drew Herdener in a written statement. "Walmart refuses to sell [Amazon brands] Kindle, Fire TV, and Echo. Shocker. In the Journal's next story they will uncover gambling in Las Vegas."

Love that. You can disagree with that view, but he's very clear about their thinking.

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[sabbede]

Ditto. Best corporate statement I've heard in maybe ever.

Re: Nope. Not the same thing.

[kenh]

Competitors are free to list & sell their items that compete with Amazon on Amazon's website - what they can't do is buy premium counter-promotion/advertising on pages for Amazon's own products.

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[dgatwood]

The analogy isn't perfect, I'll grant you. That said, it's more like not allowing third-party sellers to advertise products that compete with Great Value when you search for Great Value products on their website. One product advertising another product would be kind of strange.

That said, as a consumer, I wish they would apply that to every product. There's nothing more annoying than the steaming pile of advertising that Amazon has become. If I'm searching for a specific product by its brand name and ex

Duh.

[ledow]

So you mean I can't get ads on Microsoft.com which when you search for Windows pop up adverts for Linux?

I'm shocked. Shocked, I tell you.

Why on Earth would a company allow trademark dilution and trademarked keyword camping by a third party on their OWN website?

This isn't anti-competitive. They aren't asking Google to stop you advertising, and they can't stopping you advertising your product. They're stopping you advertising your product when people literally want to search for their product specifically.

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[reg]

Searching amazon.com for "apple tv" resulted in the second product being a fire TV stick, not marked as sponsored. This is what abuse of market dominance looks like...

Re: Duh.

[kenh]

By your logic every item on Amazon is sponsored.

Amazon listing amazon products on amazons website are not examples of 'sponsored' listings.

Amazon isn't a search engine, stop pretending it is.

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[dgatwood]

By your logic every item on Amazon is sponsored.

You mean there are items on Amazon that aren't sponsored? I haven't seen any lately. :-D

Dave Bowman: My god, it's full of ads.

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[reg]

Way to completely miss the point. If the listing are sponsored or not is not really the issue. The issue is that Amazon is limiting third parties from having their products listed when someone searches for an amazon product, but doing exactly the same thing to their competitors products.

As for sponsored listings, if you haven't already figured it out, Amazon features products in the order of maximum profit for them. Sometimes people give some of their profit to Amazon to help get higher placement (aka ad

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[ledow]

And the third product is an nVidia Shield.

This is what "returning search results with the word TV in them based on popularity" looks like.

I highly doubt nVidia are paying to camp on either the word Apple or TV for a games console.

Amazon Grouping Different Products in Reviews

[BrendaEM]

For instance different sized SSDs of the same series can have vastly different performance.

Time to break Amazon up

[Alain Williams]

The on-line retail part from the part that makes goods. Amazon is so big that its retail part has to be genuinely free of influences from a manufacturer (ie itself). The risk is that there will be gross market distortion.

There is a great deal of difference between a small retailer that controls a small part of the market and a behemoth who's policies can distort the market. The same applies to other large vendors as well.

Only if independent can we be sure that there is not undue influence ... this will be hard to achieve, Bezos should be left with a small percentage of shares in the spun off parts.

So what?

[kenh]

Amazon competitors have no 'right' to buy advertising space in select locations within Amazon's website/search results.

Every lucrative ad placement Amazon refuses its competitors is revenue Amazon doesn't collect.

This is like Chevy getting upset that they can't buy advertising space inside a ford dealership.

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[sabbede]

I'd tweak that analogy a little to make it clear that the Ford dealership also sells used cars from any maker. So, Chevys are sold, but they won't hang banners that say the Silverado is better than the F-150.