Amazon was accused, time and again, of “smash”To the competition. During a landmark hearing in the middle of last year, Jeff Bezos had to explain to the United States Congress about alleged monopolistic practices. Now, Reuters published an internal company report explaining how the retail biggest in the world copy competitive products and manipulate results to get them off the market.
Thousands of pages of internal Amazon documents examined by the news agency, including emails, strategy documents and business plans, show that the company performed a systematic campaign of copycat creation and manipulation search results to power its own product lines in India, one of its most important emerging markets.
The documents reveal how Amazon’s private label team in India blew up in secret the internal data of Amazon.in to copy products sold by other companies and then offered them on their platform.
Employees also boosted sales of Amazon’s private label products by manipulating search results for Amazon for the company’s products to appearAs a 2016 strategy report for India put it, “in the first 2 or three … search results” when customers were shopping on Amazon.in.
This has to do with an Amazon strategy to manufacture products: the well-known “Amazon Basics”, which are items such as USB cables, chairs, batteries or even chinstraps. That is to say, everyday objects.
The main problem with this practice is that Amazon is accused of extracting information from its competitors: as the system has the data of what is sold, how much is sold and other relevant information, the company uses for its own benefit, affecting free competition.
In testimony before the US Congress in 2020, Amazon founder Jeff Bezos explained that the e-commerce giant prohibits its employees from using individual seller data to help its private label business. And, in 2019, another Amazon executive testified that the company does not use that data to create its own private label products. or alter your search results to favor them.
But the report published by Reuters contradicts Bezos’s statement.
The “victims” of the Amazon system
Bezos denied last year that Amazon manipulates search results. Photo Bloomberg
Among the affected brands is one of the popular shirts in India, John Miller, which is owned by a company whose CEO is Kishore Biyani, known as el “retail king” of the country. Amazon decided to “measure” John Miller’s shirts down to neck circumference and sleeve length, the document says.
Internal documents also show that Amazon employees studied proprietary data on other brands on Amazon.in, including detailed information on customer returns. The objective: to identify and select products, described as products of “reference” or “reference”, and “replicate” them.
As part of that effort, the 2016 internal report laid out Amazon’s strategy for a brand the company originally created for the Indian market called “Solimo”. Solimo’s strategy, he said, was simple: “use information from Amazon.in to develop products and then leverage the Amazon.in platform to market these products to our customers.”
The Solimo project in India has had an international impact: dozens of Solimo-branded health and home products are now offered for sale on Amazon’s US website, Amazon.com.
The 2016 document further shows that Amazon employees working on the company’s own products, known as private labels, planned to partner with the manufacturers of the copy products. That’s because they learned that these manufacturers employ “unique processes that impact the final quality of the product.”
The document, entitled “India Private Label Program”, states: “It is difficult to develop this expertise in all products and therefore, to ensure that we can fully match the quality with our reference product, we decided partner only with manufacturers of our reference product. “
This experience of the manufacturers was called “tribal knowledge”.
Amazon has previously been accused by employees working on private label products of exploiting seller-owned data individual to launch competitive products and manipulate search results to increase sales of the company’s own products.
But internal documents seen by Reuters show for the first time that, at least in India, manipulating search results to favor Amazon’s own products, as well as copying other sellers’ products, was part of a formal and clandestine strategy at Amazon. , and that top-level executives were briefed on.
The documents show that two executives reviewed India’s strategy: Senior Vice Presidents Diego Piacentini, who has since left the company, and Russell Grandinetti, who currently leads. Amazon’s international consumer business.
Amazon does not confirm the veracity of the documents. Photo Bloomberg
In a written response to questions for this report, Amazon said: “As Reuters has not shared the documents or their provenance with us, we cannot confirm the veracity or not of the information and affirmations as indicated. We believe that these claims are in fact incorrect and unsubstantiated. “
The company did not elaborate. The statement also did not address Reuters questions about evidence in the documents that Amazon employees copied other companies’ products for their own brands.
The company said the way it displays search results does not favor private label products. “We display search results based In relevance to the customer’s search query, regardless of whether those products have private labels offered by sellers or not, ”Amazon said.
Amazon also said that it “strictly prohibits the use or sharing of data vendor-specific non-publics for the benefit of any vendor, including private label sellers “, and that it investigates reports by its employees violating that policy.
With information from Reuters