Amazon uses data from third-party sellers to develop its own products

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Amazon CEO Jeff Bezos.

Emmanuel Dunnand | AFP | Getty Images

Amazon uses data from its vast network of third-party sellers to determine what new products it will create, a Wall Street Journal investigation has found. 

The probe found that some Amazon executives had access to seller data that was then used to discover bestselling items they might want to compete against. The executives also developed workarounds to Amazon’s internal restrictions to gain access to reports on individual seller data, as part of a practice dubbed “going over the fence,” the Journal reported. 

Representatives from Amazon didn’t immediately respond to a request for comment. 

The WSJ’s findings directly contradict Amazon’s previous messaging around the issue of how it uses data from third-party merchants to build private-label products. For many years, Amazon has housed its own private-label goods under the AmazonBasics branding, which offers everything from furniture to clothing. It also makes private label products under other brand names.

Amazon has long maintained that it’s against company policy to use such data to build future products. Last July, at a hearing of the House Judiciary subcommittee on antitrust, Nate Sutton, associate general counsel at Amazon, denied that individual seller data is used to manipulate search algorithms to favor Amazon’s own products, or in any other way to directly compete with merchants. 

Sutton’s denial echoed statements Amazon had previously given on the issue. For example, the company called out then-presidential candidate Sen. Elizabeth Warren, who said Amazon was hurting third-party sellers by using their sales data against them.

AmazonBasics has been the target of criticism from some third-party sellers who say it gives Amazon an unfair advantage over sellers. The company had been aggressively promoting its own brands on its website, including adding links to its own products on third-party sellers’ listings. 

The practice has also attracted growing scrutiny from regulators, who argue it may be anti-competitive. Amazon is already being probed by FTC officials over its business practices in retail and cloud computing, according to reports from several outlets. The Department of Justice and the House Judiciary Committee have both opened broad antitrust reviews of Big Tech.

Read the full story in The Wall Street Journal.

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