The U.S. House of Representatives Judiciary Committee on Tuesday released a previously unseen document from Amazon showing that the company uses “aggregated data” from its third-party sellers to inform the strategy of its overall business.
The Oct. 11 document was drafted by the online behemoth in response to the congressional antitrust probe that began to take shape in July and targeted tech titans Google, Facebook and Apple as well.
The Amazon memo stated that the company also pulls data from its first-party sales as well as public sources, Reuters reported, and insisted that Amazon teams aren’t using individual seller data to influence the launching, sourcing or pricing of private-label products. There are about 158,000 Amazon private-label goods sold across the site.
While the company grew to prominence as a selling platform, Amazon is increasingly pouring its energies into its own retail business, offering value-hungry shoppers Amazon-backed versions of consumer favorites. Since Amazon’s investment in its own private labels began, the site’s third-party merchants have incubated anxieties about whether their own data would be used to the e-tailer’s advantage, effectively cutting them out of the equation.
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In its response to Congress, Amazon argued that the use of aggregated sales data — both public and private — is standard retail practice. The company also admitted that it asks third-party sellers to lower prices on the platform when it finds them selling goods for less on other websites.
The company denied that its search algorithm prioritizes Amazon private-label brands over products from its sellers. It also denied adjusting search rankings based on whether merchants had purchased ads or enrolled in the company’s powerful logistics program.
In September, however, a Wall Street Journal report pointed to the existence of an internally controversial algorithm, which insiders admitted gave more profitable items prominent placement in search rankings. These products show up ahead of the best-selling and most relevant results in searches, the unnamed sources said.
The committee’s final report on the Amazon antitrust probe is expected in the “first part” of next year.
Editor’s Note: This story was reported by FN sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.