Amazon India accused of copying merchant products and juicing search results to sell its own knockoffs

Report claims documents show employees abusing access

When asked in July, 2020, by US Representative Pramila Jayapal (D-WA) whether Amazon ever mined data from its third-party vendors to launch competing products, founder and then CEO Jeff Bezos said he couldn't answer "yes" or "no," but insisted Amazon had rules disallowing the practice.

"What I can tell you is we have a policy against using seller-specific data to aid our private label business but I can’t guarantee that policy has never been violated," Bezos said.

According to documents obtained by Reuters, Amazon's employees in India flouted that policy by copying the products of Amazon marketplace sellers for its in-house brands and then manipulating search results on Amazon's website to place its knockoffs at the top of search results lists.

"The documents reveal how Amazon’s private-brands team in India secretly exploited internal data from to copy products sold by other companies, and then offered them on its platform," said Reuters reporters Aditya Kalra and Steve Stecklow in a report published on Wednesday.

"The employees also stoked sales of Amazon private-brand products by rigging Amazon’s search results so that the company’s products would appear, as one 2016 strategy report for India put it, 'in the first 2 or three … search results' when customers were shopping on"

Last year, the Wall Street Journal published similar allegations that the company used third-party merchant data to develop competing products, which prompted Rep. Jayapal's question to Bezos. Such claims are central to the ongoing antitrust investigations of Amazon being conducted in the US, Europe, and India.

"We must ensure that dual role platforms with market power, such as Amazon, do not distort competition," said Margrethe Vestager, EVP of the European Commission of Competition, in a statement last November. "Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers."

The EC said it had found that a significant amount of non-public seller data is available to employees of Amazon's retail business and that Amazon analyzes that data to make business decisions that harm sellers using its online marketplace.

Amazon in 2019 launched a program called Project Zero to prevent third-party merchants from copying one another and selling their copies via Amazon's market. The anti-counterfeiting program, however, is externally focused.

Amazon responds

In a statement emailed to The Register, an Amazon spokesperson said the company has not seen the documents obtained by Reuters but believes they're wrong.

"As Reuters hasn't shared the documents or their provenance with us, we are unable to confirm the veracity or otherwise of the information and claims as stated," an Amazon spokesperson said.

"We believe these claims are factually incorrect and unsubstantiated. We continue to focus on delivering first-class service to consumers, and helping India’s small businesses reach customers around the world."

The company's statement goes on to insist that sellers in its marketplace determine their prices and that Amazon does not give preferential treatment to merchants.

The antitrust lawsuit brought by Washington DC Attorney General Karl Racine argues to the contrary, that Amazon's 'most favored nation' (MFN) agreements with sellers "prevent third-party sellers that offer products on from offering their products at lower prices or on better terms on any other online platform, including their own websites."

Insisting that it analyzes seller data in aggregate to provide sellers with information on "selection gaps based on customer preferences," Amazon's spokesperson reiterated Bezos's assertion that Amazon has a policy forbids using merchant data for internal usage.

"Amazon’s policy strictly prohibits the use or sharing of non-public, seller-specific data for the benefit of any seller, including sellers of private brands," the company spokesperson said. "This policy applies uniformly across our company to all employees – our internal teams receive regular trainings on its application and we thoroughly investigate any reports of employees acting contrary to this policy."

At this point, Amazon is not the only organization investigating these reports. ®

Broader topics

Other stories you might like

  • DigitalOcean tries to take sting out of price hike with $4 VM
    Cloud biz says it is reacting to customer mix largely shifting from lone devs to SMEs

    DigitalOcean attempted to lessen the sting of higher prices this week by announcing a cut-rate instance aimed at developers and hobbyists.

    The $4-a-month droplet — what the infrastructure-as-a-service outfit calls its virtual machines — pairs a single virtual CPU with 512 MB of memory, 10 GB of SSD storage, and 500 GB a month in network bandwidth.

    The launch comes as DigitalOcean plans a sweeping price hike across much of its product portfolio, effective July 1. On the low-end, most instances will see pricing increase between $1 and $16 a month, but on the high-end, some products will see increases of as much as $120 in the case of DigitalOceans’ top-tier storage-optimized virtual machines.

    Continue reading
  • GPL legal battle: Vizio told by judge it will have to answer breach-of-contract claims
    Fine-print crucially deemed contractual agreement as well as copyright license in smartTV source-code case

    The Software Freedom Conservancy (SFC) has won a significant legal victory in its ongoing effort to force Vizio to publish the source code of its SmartCast TV software, which is said to contain GPLv2 and LGPLv2.1 copyleft-licensed components.

    SFC sued Vizio, claiming it was in breach of contract by failing to obey the terms of the GPLv2 and LGPLv2.1 licenses that require source code to be made public when certain conditions are met, and sought declaratory relief on behalf of Vizio TV owners. SFC wanted its breach-of-contract arguments to be heard by the Orange County Superior Court in California, though Vizio kicked the matter up to the district court level in central California where it hoped to avoid the contract issue and defend its corner using just federal copyright law.

    On Friday, Federal District Judge Josephine Staton sided with SFC and granted its motion to send its lawsuit back to superior court. To do so, Judge Staton had to decide whether or not the federal Copyright Act preempted the SFC's breach-of-contract allegations; in the end, she decided it didn't.

    Continue reading
  • US brings first-of-its-kind criminal charges of Bitcoin-based sanctions-busting
    Citizen allegedly moved $10m-plus in BTC into banned nation

    US prosecutors have accused an American citizen of illegally funneling more than $10 million in Bitcoin into an economically sanctioned country.

    It's said the resulting criminal charges of sanctions busting through the use of cryptocurrency are the first of their kind to be brought in the US.

    Under the United States' International Emergency Economic Powers Act (IEEA), it is illegal for a citizen or institution within the US to transfer funds, directly or indirectly, to a sanctioned country, such as Iran, Cuba, North Korea, or Russia. If there is evidence the IEEA was willfully violated, a criminal case should follow. If an individual or financial exchange was unwittingly involved in evading sanctions, they may be subject to civil action. 

    Continue reading

Biting the hand that feeds IT © 1998–2022