Amazons India division copied other sellers goods and manipulated search results to favor its own goods on its website, Reuters reported Wednesday.
Amazon used internal data to make its own products based on the third-party seller products. In addition, it also boosted sales of its private-brand products by manipulating search results, internal documents show, according to the report.
In a 2016 document, titled ‘India Private Brands Program,’ Amazons private label team in India detailed how at least two high-level executives would review sales and customer review data to identify ‘reference brands’ to replicate, according to the article.
There has been a lot of speculation leading up to the findings of this Reuters report, as to how Amazon creates its own labels, which have seen spectacular growth first in India, before being introduced to the Indian market. Reuters findings contradict Amazons own messaging of how it develops its private label products.
For many years, Amazon has launched its own goods under the ‘AmazonBasics’ private label, which offers everything from furniture to clothing. It also offers private label products under other brand names.
Teams in India also worked to boost the rankings of companys private label products in search results, using techniques such as ‘search seeding and ‘sparkles,’ according to Reuters.
‘Search seeding’ allowed Amazon’s products to appear higher in the rankings, while ‘sparkles’ are banner ads that are located above search results, to drive sales for the private-label goods, Reuters reported.
Top executives at Amazon including founder Jeff Bezos have maintained it is against company policy to use third-party data to build any new products. Bezos said as a much to a Congressional committee in July 2020 that Amazon’s policy safeguards seller data from employee access.
‘If we found someone violated it, we would take action,’ Mr. Bezos said at the committee hearing.
Representatives from Amazon didnt immediately respond to a request for comment, based on the developments.
The company has now pushed back against Reuters reporting, stating, We believe these claims are factually incorrect and unsubstantiated. The company states that it 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 it investigates reports of its employees violating that policy.
Read the full Reuters report here.