Amazon uses aggregated seller data when making decisions about its own product strategy, according to a report in CNBC about answers the company provided to Congress, specifically to House Antitrust Subcommittee Chairman David Cicilline.
pointed to the significance of this admission:
"Amazon's use of private data to shape and promote its own branded goods seems to be a key question for lawmakers and regulators probing the company's competitive practices. If investigators believe Amazon holds a dominant marketplace position, they could seek evidence that would point to the company using its dominance to compete against third-party sellers that also rely on Amazon's platform for their livelihood."
Amazon's algorithm is reinforcing. CNBC wrote:
"Amazon said it knows that its "private brand products have on average higher customer review ratings, lower return rates, and higher repeat purchase rates than other comparable brands in the Amazon store," some of which are factors its algorithm would consider."
How online marketplaces use data and with whom they share it is important, and the article reminded us of eBay's data-sharing practices described in The Atlantic
The publication quoted former eBay CEO, who at the time was president of eBay Marketplaces, reporting that the company sent manufacturers data about what people were looking for on eBay. "We have a really big China export business to Europe and the United States. And they respond very, very quickly to consumer taste, whatever it might be. It's really remarkable to see how quickly the manufacturing base adapts to the demand signals they get."
Some sellers point to that practice as a sign eBay is disingenuous when it says it doesn't compete with its sellers.
The issue at stake for small sellers: it's hard enough to compete with giants, but even more so when marketplaces exploit their sales data for their own benefit or play favorites.