A Reuters report suggests that Amazon’s India office is engaged in manipulative and monopolistic products designed to out-compete local sellers.
A new Reuters report suggests that Amazon India used its search system and internal data collections to gain and retain an advantage against local sellers.
According to The Verge, the Reuters investigation was based off analyses of Amazon e-mails, strategy plans, and other corporate documents. The outlet obtained papers detailing the sorts of aggressive, monopolistic tactics which Amazon has denied using in the United States and elsewhere.
While the report covers many different aspects of Amazon’s alleged wrongdoing, The Verge highlights two particular claims: the first, that Amazon employees used “search seeding” to ensure the company’s own products always appeared in “the first two or three” search results for a category; and second, that Amazon identified so-called “benchmark” products popular with consumers, which it then copied and began selling.
Although these projects appear to have been spear-headed by Amazon employees, Reuters says that the plans were reviewed by “at least” two high-ranking executives.
Interestingly, Amazon India’s strategy may have gone beyond simply copying designs: they purportedly analyzed reviews, purchase trends, and product return statistics to tweak their own products.
“For every product line identified for launch, we will identify an optimal reference brand based on customer reviews and size of business,” Amazon wrote in reference to Symbol, its men’s clothing brand in India. “The replication of the ‘Fit’ of this reference brand will be a crucial step in our product development process.”
Amazon has since said that it believes Reuters’ claims are “factually incorrect” and likely unsubstantiated.
“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,” the company said in its response to Reuters, reprinted by the same outlet. “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 added.
While Amazon has strongly denied using such tactics in the Indian market, The Wall Street Journal found in 2020 that the company’s employees studied internal sales data to gain a similar edge over independent sellers.
Despite Amazon’s insistence that employees were prohibiting from using these kinds of strategies, Amazon CEO Jeff Bezos refused to give Congress a “guarantee” that the prohibition was never violated.
Amazon, notes Reuters, is currently under investigation by the United States, India, and the European Union for anti-competitive practices.