A lawmaker is sticking up for Amazon sellers. Senator Warren told the New York Times that Amazon should be scrutinized for potential anti-competitive behavior.
The problem, as she sees it, is that Amazon amasses sales data from third-party sellers and use it to its own advantage as a retailer – for example, develop a private-label brand, according to Business Insider’s coverage of the interview. “If you’re getting a huge competitive advantage from being a platform provider because of all this information you keep scraping off, then we no longer have competition going on.”
Julia Wilkinson wrote about the issue on the AuctionBytes Blog after the Wall Street Journal published a piece in 2012. The Journal reported that some small Amazon marketplace sellers felt Amazon used its marketplace “as a vast laboratory to spot new products to sell, test sales of potential new goods, and exert more control over pricing.”
In 2016, readers reacted to a Bloomberg article when it reported:
“Amazon is using insights gleaned from its vast Web store to build a private-label juggernaut that now includes more than 3,000 products – from women’s blouses and men’s khakis to fire pits and camera tripods. The strategy is a digital twist on one used for years by department stores and big-box chains to edge out middlemen and go direct to consumers – boosting loyalty and profits.”
Last year we blogged about a study conducted by SLI Systems that found sellers recognized the competitive threat Amazon posed. One EcommerceBytes reader pointed out that Amazon is very data driven, and said they believed Amazon is open to losing money in the short term in order to make money down the road.
The conversation in the comments turned to “gating,” a practice in which Amazon restricts sellers from listing items in certain categories. A reader said that while Amazon will often come in and upset your apple cart with specific products, “overall they are fair and give notice; hard but fair.”
It’s always interesting to see lawmakers and politicians weigh in on issues involving online sellers. These days, Amazon is facing a lot of heat.