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Amazon Knew Seller Data Was Used To Boost Company Sales (politico.eu) 41

Posted by msmash from the closer-look dept.
Amazon CEO Jeff Bezos told U.S. lawmakers last year that the company has a policy prohibiting employees from using data on specific sellers to help boost its own sales. "I can't guarantee you that that policy has never been violated," he added. Now it's clear why he chose his words so carefully. POLITICO: An internal audit seen by POLITICO warned Amazon's senior leadership in 2015 that 4,700 of its workforce working on its own sales had unauthorized access to sensitive third-party seller data on the platform -- even identifying one case in which an employee used the access to improve sales. Since then, reports of employees using third-party seller information to bolster Amazon's own sales and evidence of lax IT access controls at the company suggest that efforts to fix the issue have been lackluster.

The revelations come as trustbusters worldwide are increasingly targeting Amazon, including over how it uses third-party seller data to boost its own offerings. The European Commission opened an investigation into precisely this issue in November 2020, with preliminary findings suggesting Amazon had breached EU competition law. "This is fuel for the suspicions I had," Dutch internet entrepreneur Peter Sorber said when told about the audit. Sorber sold children's clothes on Amazon, but 18 months after setting up his "Brandkids" store on the platform and entering the required sales data, his products disappeared from the search rankings. "You cannot ask a retailer to show his entire story with all sales statistics and then show that to your own purchasers. This is worse than not done. This is simply unfair competition," Sorber said.
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Amazon Knew Seller Data Was Used To Boost Company Sales More

Amazon Knew Seller Data Was Used To Boost Company Sales

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  • This Isn't Even News.

    • Re: (Score:2)

      by kvutza ( 893474 )

      Still it is good to remind us of their evilness. People tend to forget.
      I've started to avoid that company as h*ll for what they do to their customers.

      PS I am not Canadian, thus this comment needn't be deleted even though it vilifies a group of people identified as working at that company.

  • The temptation is too great. You would have done the same thing, admit it. Still, there must be a fine etc.

    • It should kinda make you wonder why one of the internet's largest marketplaces has such terrible search functionality. Has product search improved at Amazon in 10 years?

      Amazon employees admit they sometimes have to use Google to find the product they are actually looking for in their marketplace. Is it just too tempting not to fix?

      • Re: (Score:1)

        by Anonymous Coward
        Is it just too tempting not to fix?

        in a word, "profit".

        They tune their search to make more profit. If giving you exactly what you searched for was better for them they would do it in milliseconds.

  • They put their own house brand knock-offs just beside the popular items so they're shown on the shelf side-by-side, with the house brand being cheaper by a chunk.

    For some reason it feels more nefarious when Amazon is it - the supermarkets are probably just as evil.

    • Supermarkets (and many other retailers) mostly sell shelf space and position (often shelf height) to their vendors, making it somewhat controversial to aggressively nullify these paid advantages.

      Of course, online selling isn't limited to the physical reality of a shelf.

    • Definitely happening at Home Depot. Their HDX brand copies products all the time, and funny HDX is always in stock and the brands they copied are not.

      • THE HDX brand is probably made by a 3rd party that just slaps different labels on it.

        Going on about the grocery store, you don't think Krogers actually has a cans good factory, a tp factory and a laundry detergent factory, do you? No, they don't. What they do is pay these national brands to create these items for them.

        Also, as someone else mentioned, grocery stores sell shelf space and floor space to these companies that produce things. This stuff gets audited and checked because if the supermarket is takin

        • If a store, any store,
          a. starts selling its own version of a popular product
          b. on a shelf adjacent to the popular product
          c. and at a lower price

          Then it does not matter if they manufacture the product or white label the product. It does not matter if they sold shelf space the the popular product or not. It matters that they used their inside knowledge to compete in an unfair way.

    • Re: (Score:2)

      by necro81 ( 917438 )
      A subtle difference is that the supermarket is not merely hosting the name brands' merchandise: they have first bought it and are putting it on display. A second difference (a difference of degree, though not of kind) is that Amazon has a singularly large position in online retail, whereas for most people* they have choices in supermarkets. A third difference is that, as you say, the competing items are shown side-by-side (usually eye level versus lower level, but whatever), whereas it is very easy for Am
    • Or do it the CVS way - have the CVS version be slightly smaller at a lower price. But the cost/amount is actually the same. For example, there might be a brand name pill with 60 pills per bottle, and perhaps 20 mg per pill. The CVS version might be 60 pills per bottle and it's 25% cheaper! Then you take a close look at it and each pill only has 15 mg.
    • I read that a lot of the knock offs are actually made by the brand name. For example, at Walmart they sell their own "Great Value" spices, but those are actually made by the brand name McCormick.

  • Not just an Amazon problem (Score:4, Insightful)

    by ranton ( 36917 ) on Monday May 03, 2021 @09:22AM (#61341026)

    Many if not most retailers do this. Walmart has its Sam's Choice and Great Value brands. Kroger and Target have their own internal brands. Kohls has Croft & Barrow (and many more). They are all able to use their own sales data across all brands they sell to make decisions on how to create and market their own brands.

    It's not the practice itself which is any worse than other competitors. It is simply Amazon's size. Companies like Amazon and Walmart have simply became so big they have too much control over their partners. It would take some significant trust busting if they want meaningful change.

    • Re: (Score:2)

      by I75BJC ( 4590021 )
      Speaking as a Kroger customer -- Kroger Store Brands are of inferior quality to the name brand of the same item.

      Kroger does have a "health food" line, a "premium" line, and an economy line. Their "health food" line is decent but still lacking in quality of the other "health food" line. Their premium and economy lines are noticeably lacking in the name brand quality.

      There is nothing unethical for Kroger to follow their own sales figures and them develop their own products in a product area. Kroger

      • It'd also be good to mention Costco's approach. They work in tandem with name brands to offer their Kirkland store brand. Most all Kirkland items meet or exceed name brand, because they are manufactured on site of the name brand -- from a manufacturinh perspective they are not actually competing.

        Costco identifies ways they can optimize the product packaging dimensions, quantities, and delivery scheduling to fit their distribution model, which brings lower retail(wholesale) prices and consistent availability

    • Walmart's Great Value are actually made by brand names. For example, their "Great Value" spices are made by McCormick.

      • Re: (Score:2)

        by ranton ( 36917 )

        I did not know that. Thanks for the info. I guess that makes it easy to determine the exact worth of the McCormick brand name, by having nearly the same product side by side with almost the only difference being the label.

  • How is that different from what the grocery chains do with their house brands?

    • Amazon is so big that a different set of rules apply: anti-trust legislation. Specifically, by making their own versions of products in direct competition with other sellers and using their market power to push their brands. That's considered to be expanding their market share by suppressing competition and it's against the law. There are enough supermarket chains in most places that their house brands don't count as anti-competitive.

    • Re: (Score:3)

      by GlennC ( 96879 )

      The biggest difference is that generally the grocery chains stock the national brand and put their "house brand" next to it on the shelf. This give the shopper the chance to see both and make a comparison.

      Amazon, meanwhile, simply substitutes their brand for the original. Looking for AA batteries? You'll be shown the "Amazon Basics" and have to go searching for Duracell.

      You'll have to specifically search for the brand you're looking for, with little assurance that you're going to actually find it.

    • Re: (Score:2)

      by I75BJC ( 4590021 )
      Grocery Stores use their own internal sales figures.

      Amazon is asking/demanding their Client/Associate Sellers for all the cCAS sales data!
      Amazon already has the sales data for their own website but the articles implies that Amazon wants ALL the sales data for the C/AS whether it occurs on Amazon or the C/AS' own website, storefront, facebook, eBay, Esty, etc., etc.

      That's a big difference!
      IMHO

    • The difference is that the products for sale in the store, the store bought and owns those items. They can place them on the shelf how they want.

      Here, Amazon isn't buying those items and placing them beside their own. They're creating an advertising market, giving themselves an advantage, and not disclosing how they use client data as if it was competitor data. Worse, they actively lie about how that data is used by creating a "policy" that would protect clients, that they do not actually follow.

  • POLITICO: An internal audit seen by POLITICO warned Amazon's senior leadership in 2015 that 4,700 of its workforce working on its own sales had unauthorized access to sensitive third-party seller data on the platform -- even identifying one case in which an employee used the access to improve sales.

    Wow, ONE CASE?

    Since then, reports of employees using third-party seller information to bolster Amazon's own sales and evidence of lax IT access controls at the company suggest that efforts to fix the issue have been lackluster.

    Curious, I understand the outrage trying to be fanned here involves deep-dives into proprietary sales data, but this issue is being described in terms that could probably include things like "Amazon Suggests" - that seems a bit much.

    Amazon is in the position of controlling the cash register at a store full of third-party sellers. It is reasonable, in my opinion, for Amazon to observe the sales volume (in aggregate) for, say, 6' lightning charging cables and explore offering a store brand produ

    • If you can provably identify one case where an illegal activity is recorded, that means there are many more going under the radar.

    • > Wow, ONE CASE?

      It's enough to charge Mr. Luthor with either perjury or Contempt of Congress.

  • Bezos' answer was okay as far as it went. They do have a policy against it, he can't possibly monitor every employee. What was left unsaid was what happened to the employee who was caught violating the policy.
    • An ironic reprimand, a wink, and an annual bonus. Those were the consequences.

    • Re:Honest answer (Score:4, Insightful)

      by necro81 ( 917438 ) on Monday May 03, 2021 @11:04AM (#61341518) Journal

      They do have a policy against it, he can't possibly monitor every employee.

      The quick retort is: why has Amazon's systems been structured to allow such access in the first place? If they are trying to avoid an anti-trust action, one would think they would silo the data more rigidly. The fact that this kind of information sharing can happen (and as an open secret, does happen) suggests that Amazon intends for it to happen, policy or no.

  • The sellers knew they were in danger of Amazon moving in and cherry picking the best selling ideas.

    It is the same old wine, "(MS) DOS is not done, till DR-DOS won't run" Lotus, WordPerfect, Netscape Navigator .... we saw every lucrative top flying product subsumed by the platform host, leaving behind just dregs and high cost low margin products were left for the other "partners".

    Only after Web working out as a platform, people are able to move out of Microsoft hegemony and Microsoft is forced to innovate

    • Do you know how Amazon markets their services to brands? They sell them on distribution, inventory warehousing, and customer service. They never really make it clear that if things go well they are going to be a competitor. Give credit to Amazon's "ingenuity", but it's more than just a little disconcerting.

      I am excited to see how/if the small and local brands will respond, or they just give up.

  • That will slow their roll. Frank Herbert's two novels that featured a Bureau of Sabotage remain as relevant as ever, if not more so. Amazon is becoming too efficient at gaming its own system. https://en.wikipedia.org/wiki/... [wikipedia.org]

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