Amazon Refutes Report on Using Data for Competing Products, Will Investigate

Amazon launched an internal investigation into allegations in a Thursday Wall Street Journal article saying employees have used data about independent sellers on the company’s platform to develop competing products. Amazon doesn’t believe the claims are accurate, a spokesperson emailed, but takes the allegations “very seriously.” Products cited in the Journal article included a garage trunk organizer and office chair seat cushion. Like other retailers, “we look at sales and store data to provide our customers with the best possible experience,” she said, but “we strictly prohibit our employees from using non-public, seller-specific data to determine which private label products to launch.” A former employee was quoted as saying that “we knew we shouldn’t,” when describing a pattern of using third-party companies’ product data to introduce competing Amazon products, citing Amazon policy: “But at the same time, we are making Amazon branded products, and we want them to sell.” Private-label products are a “common retail practice, and are good for customers,” said the Amazon spokesperson. They give customers more “more choices, better products and lower prices." Many retailers, “including large retailers with extensive private brand offerings and retailers with marketplaces, know the sales volume for products in their stores,” she said. Customers’ shopping behavior on Amazon “is just one of many inputs to Amazon’s private label strategy.” The e-tailer also uses other factors used in retail, such as fashion and shopping trends in the media and on social media, suggestions from manufacturers and “gaps in our product assortment relative to our competitors.” Amazon launched more than 225 tools and services last year to help third-party sellers succeed in its stores, it said in February. More than 15,000 businesses surpassed $1 million in sales in 2019; 25,000 exceeded $500,000, it said.