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Amazon’s tightrope: Balancing Innovation and competition on Amazon’s Marketplace

 |  April 30, 2020

Sam Bowman (Truth on the Market)

The Wall Street Journal reports that Amazon employees have been using data from individual sellers to identify products to compete with with its own ‘private label’ (or own-brand) products, such as AmazonBasics, Presto!, and Pinzon.

It’s implausible that this is an antitrust problem, as some have suggested. It’s extremely common for retailers to sell their own private label products and use data on how other products in their stores have sold to help development and marketing. They account for about 14–17% of overall US retail sales, and for an estimated 19% of Walmart’s and Kroger’s sales and 29% of Costco’s sales of consumer packaged goods. 

And Amazon accounts for 39% of US e-commerce spending, and about 6% of all US retail spending. Any antitrust-based argument against Amazon doing this should also apply to Walmart, Kroger and Costco as well. In other words, the case against Amazon proves too much…