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Amazon reportedly accessed third-party seller data to develop private-label products

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Amazon says it has launched an internal investigation

Illustration by Alex Castro / The Verge

Amazon employees have accessed sales data from independent Marketplace sellers to help the company develop competing private-label products, according to a report from The Wall Street Journal.

Past Amazon employees and one current one told the WSJ that rules barring the practice weren’t uniformly enforced. In addition, former Amazon employees said using the sales data from sellers was “a common practice that was discussed openly in meetings they attended,” according to the report.

One former employee told the WSJ they knew they were violating the policies:

“We knew we shouldn’t,” said one former employee who accessed the data and described a pattern of using it to launch and benefit Amazon products. “But at the same time, we are making Amazon branded products, and we want them to sell.”

In a statement to The Verge, Amazon disputed claims that the company has used private seller data to help develop its own products.

“Like other retailers, we look at sales and store data to provide our customers with the best possible experience,” Amazon said. “However, we strictly prohibit our employees from using non-public, seller-specific data to determine which private label products to launch. While we don’t believe these claims are accurate, we take these allegations very seriously and have launched an internal investigation.”

Amazon had previously testified to Congress that it doesn’t access sales data from sellers to make its private brands. “Our incentive is to help the seller succeed because we rely on them,” said Nate Sutton, Amazon’s associate general counsel, at a July 16th hearing. “They have many options. So we apply the same criteria to both and we do not use their individual data when we’re making decisions to launch private brands.”

Amazon has been under scrutiny for its anti-competitive practices for some time, though the Federal Trade Commission hasn’t yet opened a formal investigation into the company on the matter. The FTC has made preliminary inquires into Amazon’s deal with Apple to let Apple sell its products on the e-commerce site. FTC investigators have also interviewed Marketplace sellers about how much of their sales come from Amazon, Bloomberg reported last September. In February, a coalition of unions petitioned the FTC to investigate Amazon for anti-competitive practices, including its use of Marketplace data.