Amazon employees accessed third-party sellers' business and marketplace information to create the company's very own private Amazon-branded label juggernaut, according to The Wall Street Journal. It's yet another report about Amazon's anti-competitive practices and how it continues to spark distrust.
Former and current employees spoke with the publication and said that the rules prohibiting third-party marketplace data aggregation weren't "uniformly" enacted. They said that the practice was common. "We knew we shouldn't," one told The Wall Street Journal. "But at the same time, we are making Amazon-branded products, and we want them to sell."
In a written statement to The Wall Street Journal, Amazon said:
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 nonpublic, seller-specific data to determine which private label products to launch.
The company added that any employee accessing third-party sellers' information for business development and insight was violating the company's policies. To that end, Amazon is expected to conduct an internal investigation into the matter.
What comes of that probe remains to be seen. What's clear, though, is that it wouldn't be wrong to doubt Amazon associate general counsel Nate Sutton's statement to the Congress in July in light of this report: "We don’t use individual seller data directly to compete" with third-party sellers, Sutton said.
Lawmakers have long decried this — Massachusetts Senator and former 2020 Democratic presidential candidate Elizabeth Warren has repeatedly called for breaking up big tech to harmonize the marketplace. The lack of robust antitrust enforcement has gifted big companies a monopoly over the market, according to Warren. In March 2019, Warren linked to economic papers on the issue and wrote, "Amazon crushes small companies by copying the goods they sell on the Amazon Marketplace and then selling its own branded version." Here's an interview the former presidential candidate gave on the same topic.
The power of marketplace data — Whether it is a big enterprise or a small business, owners of and workers in these financial ventures, including Amazon, desperately seek access to marketplace data. This data contains aggregated information about the longevity of certain trends, product inventory, the likelihood of items' prices going up or down, potential revenue, discounts, and a lot more. It doesn't have to involve highly complex products like machinery; the data can be related to rudimentary and often basic items like baby wipes or diapers, toothbrushes, batteries.
Under COVID-19, Amazon has found an opportunity to present itself as an almost altruistic resource and necessity for millions of consumers. But its record on the front of regulatory practices is still very much the same: pockmarked by complaints, shrouded in allegations of unfair competition. This is atop reports of Amazon employees not receiving paid sick leave. Although it claims it will investigate the issue, Amazon's previous conduct doesn't spark much faith.