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WSJ: ‘Amazon Scooped Up Data From Its Own Sellers to Launch Competing Products’

Dana Mattioli, reporting for The Wall Street Journal:

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.

Read between the lines and the Journal is saying Amazon executives lied in testimony to Congress. Which is illegal.

Amazon has said it has restrictions in place to keep its private-label executives from accessing data on specific sellers in its Marketplace, where millions of businesses from around the globe offer their goods. In interviews, former employees and a current one said those rules weren’t uniformly enforced. Employees found ways around them, according to some former employees, who said using such data was a common practice that was discussed openly in meetings they attended.

“We knew we shouldn’t,” said one former employee who accessed the data and described a pattern of using it to launch and benefit Amazon products. “But at the same time, we are making Amazon branded products, and we want them to sell.”

I’m fine with Amazon having its own house-branded products. All major stores do, and of course all store brands use the data from product sales to decide what to make. The difference with Amazon is that Marketplace isn’t really Amazon’s store — it’s a way for companies to set up their own store on Amazon’s online platform. Amazon should just clean this up and do right by Marketplace sellers — Amazon will continue to thrive by operating entirely above board. Amazon isn’t hurting for revenue (especially now), but they are hurting for trust.

(Apple News link, for News+ subscribers who don’t have a standalone WSJ subscription.)

Thursday, 23 April 2020