Dana Mattioli reports in the Wall Street Journal that Amazon may have lied to both its third-party sellers and Congress regarding its data policies. Mattioli’s article alleges that Amazon used information from its independent sellers to enhance its own product lineup. She writes:
Amazon.com Inc. employees have used data about independent sellers on the company’s platform to develop competing products, a practice at odds with the company’s stated policies.
The online retailing giant has long asserted, including to Congress, that when it makes and sells its own products, it doesn’t use information it collects from the site’s individual third-party sellers—data those sellers view as proprietary.
Yet interviews with more than 20 former employees of Amazon’s private-label business and documents reviewed by The Wall Street Journal reveal that employees did just that. Such information can help Amazon decide how to price an item, which features to copy or whether to enter a product segment based on its earning potential, according to people familiar with the practice, including a current employee and some former employees who participated in it.
In one instance, Amazon employees accessed documents and data about a bestselling car-trunk organizer sold by a third-party vendor. The information included total sales, how much the vendor paid Amazon for marketing and shipping, and how much Amazon made on each sale. Amazon’s private-label arm later introduced its own car-trunk organizers.
“Like other retailers, we look at sales and store data to provide our customers with the best possible experience,” Amazon said in a written statement. “However, we strictly prohibit our employees from using nonpublic, seller-specific data to determine which private label products to launch.”
Amazon said employees using such data to inform private-label decisions in the way the Journal described would violate its policies, and that the company has launched an internal investigation.
Nate Sutton, an Amazon associate general counsel, told Congress in July: “We don’t use individual seller data directly to compete” with businesses on the company’s platform.