Amazon reportedly ripped off sellers, rigged search results
Amazon ripped off its third-party sellers’ products and rigged search results to favor its own products — even as Jeff Bezos told Congress under oath that the company didn’t engage in such practices, according to a new investigation.
The knockoff and manipulation campaign occurred in Amazon’s India division with the approval of high-level executives based in the US, Reuters reported on Wednesday.
Amazon employees tracked sales and search data to identify “reference brands” that the company then replicated and sold, according to a 2016 document seen by the outlet.
The report gives credence to a claim that critics and some third-party sellers have been making for years: Amazon uses the unprecedented quantity of sales data it gathers as the world’s top e-commerce site to help decide which products to make under its own labels like Amazon Basics.
But the company has long denied such accusations. Speaking to Congress under oath last year, founder Jeff Bezos said the e-commerce giant has a rule prohibiting its employees from using data on third-party sellers to help its private-label business.
“If we found someone violated it, we would take action,” said Bezos, who was Amazon CEO at the time but has since stepped down.
But the internal documents seen by Reuters show that manipulating search results to favor Amazon’s own products, as well as copying other sellers’ goods, were part of a formal, clandestine strategy at Amazon’s India operation. The documents also reportedly show that two Amazon executives reviewed the India strategy – senior vice presidents Diego Piacentini, who has since left the company, and Russell Grandinetti, who currently runs Amazon’s international consumer business.
In a statement to The Post, an Amazon spokesperson denied the Reuters report.
“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,” the spokesperson said. “We believe these claims are factually incorrect and unsubstantiated.”
The spokesperson did not reply to a question about whether the Reuters report shows Bezos misled Congress. The report did not say that Bezos was aware of the India strategy.
The revelations could give fuel to antitrust regulators in the US, European Union and India, who are all investigating the company for allegedly using its size to squash competition.
In the US, Federal Trade Commission chief Lina Khan wrote in a 2017 paper that Amazon’s private-brand business raises competition concerns.
“It is third-party sellers who bear the initial costs and uncertainties when introducing new products; by merely spotting them, Amazon gets to sell products only once their success has been tested,” she wrote. “The anticompetitive implications here seem clear.”
Amazon, for its part, has called on Khan to recuse herself from any investigations of the company because she has written critically about it in the past.