A recent expose has once again leveled accusations at Amazon for copying third-party sellers’ products and then manipulating the search results to favor Amazon’s own brands. In a recent report by Reuters, they claim how they have accessed thousands of documents including emails, business plans, and strategy papers which included a strategy of how they were going to create copycat products and then manipulate search results to boost their own product lines in the Indian market.
In an accusation that has been used multiple times over the years and each time has been vehemently denied by Amazon, there are apparently documents that now prove that these accusations have been true. Reuters specifically mention that the private brand’s team in India utilized the internal Amazon.in data to select which products they should then private label. They would then manipulate the search results to ensure it was shown in “the first 2 or 3 search results” according to a document from 2016.
The Cut-throat Amazon Private Label Strategy
In a document titled the “Indian Private Brands Program” it detailed how employees had identified the specific manufacturers of key target products and noted how these key manufacturers have certain processes which impact the product quality.
“It is difficult to develop this expertise across products and hence, to ensure that we are able to fully match quality with our reference product, we decided to only partner with the manufacturers of our reference product.”Leaked Amazon Document
Here at eSeller365 over the years, we have heard of more than a handful of stories from sellers who had their own products being manufactured overseas only for them to go to make a re-order and be told that the manufacture had been offered a multi-million dollar deal for a huge order that also contained exclusivity. Some sellers later found out that this seller who stole their manufacturer was Amazon. All of these sellers that we have heard from, all utilized FBA and so were sending their products directly to an Amazon warehouse.
Amazon Continues to Deny Allegations
Back in 2020 in a sworn testimony in front of the U.S. Congress, Amazon founder and then CEO Jeff Bezos explained that the eCommerce giant prohibits its employees from using the data on individual sellers to help the private-label side of the business. Also in 2019, another executive testified that the company does not use such data to create its own private-label products or alter its search results to favor them.
These statements seem to be in direct conflict with the documents accessed by Reuters which seem to specifically look at the India marketplace and mention a clandestine strategy that was reviewed by at least two senior staff members which were senior vice presidents Diego Piacentini, who has since left Amazon, and Russell Grandinetti, who currently runs Amazon’s international consumer business.
In response to a request for comment from Reuters, Amazon made the following statement.
“As Reuters hasn’t shared the documents or their provenance with us, we are unable to confirm the veracity or otherwise of the information and claims as stated. We believe these claims are factually incorrect and unsubstantiated.”
“We display search results based on relevance to the customer’s search query, irrespective of whether such products have private brands offered by sellers or not,”
“Amazon strictly prohibits the use or sharing of non-public, seller-specific data for the benefit of any seller, including sellers of private brands, and that investigates reports of its employees violating that policy.”Amazon Statement
Reuters also commented how both Piacentini and Grandinetti didn’t respond to requests for comment.The statement also did not address questions from Reuters about the evidence in the documents that Amazon employees copied other companies’ products for its own brands.
More Trouble For Amazon’s Antitrust Investigations
As far as Amazon is concerned these new allegations are not going to be a welcome distraction especially considering that they have come under investigation in both the US and Europe for various anti-competitive practices.
It also seems like these new allegations in India are going to pique the interest of the investigations currently ongoing in both the US and Europe according to an antitrust attorney.
“When any one competition authority is looking into aspects of one of these globally present organizations’ behavior, they will certainly be interested in understanding what evidence there is in other parts of the world and the extent to which that evidence relates to the practices that they themselves are investigating,”Jonas Koponen, Antitrust Attorney, Linklaters LLP
The success of Amazon’s private-label brands has been no secret around the world, however, with these new allegations, it appears that this success was not a pure coincidence and actually a targeted strategy using internal data and the might and influence of Amazon to undercut and rip-off ideas from third-party sellers.
We will keep an eye on how this story progresses and keep you up to date with any progress.
Connect With Us And Other Small Business Owners
Please head over to our Facebook Group for Small Business Sellers and interact with other small business owners.
Subscribe to Our Newsletter
Business Insights for Your Online Business Presented with a Dash of Humor
We do not share your information and you can unsubscribe anytime.