Amazon has insisted, even to Congress, that it does not use its third-party sellers' data to inform development of competing products. But through interviews with more than 20 former employees and an analysis of documents, The Wall Street Journal has concluded that's not true.
Amazon's business relies on third-party retailers, who either stock products at an Amazon warehouse or sell them directly from their own shelves through the e-commerce giant's online marketplace. And like many big box stores, Amazon often creates versions of those products sold under its brand name, though Amazon associate general counsel Nate Sutton said in congressional testimony last year that "we don't use individual seller data directly to compete" with third-party sellers, and the company maintains it has rules against accessing that data.
But "in interviews, former employees and a current one said those rules weren't uniformly enforced," the Journal writes. "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," and using it "was a common practice that was discussed openly in meetings they attended," former employees tell the Journal. Data on total sales and marketing and shipping prices reportedly helped Amazon replicate a bestselling car trunk organizer, among other things.
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"Like other retailers, we look at sales and store data to provide our customers with the best possible experience. However, we strictly prohibit our employees from using nonpublic, seller-specific data to determine which private label products to launch." Amazon said in a statement. Read more at The Wall Street Journal.
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