eCommerce

Amazon Allegedly Poached Info From Sellers To Launch Competing Products

Amazon Allegedly Poached Info From Sellers

Amazon is facing charges that it violated its own policies when employees took data from its independent sellers to launch competing products, The Wall Street Journal reported.

The Seattle eCommerce company has vigorously denied the allegations.

While Amazon insists that it restricts staff from accessing the data of its millions of sellers, more than 20 former employees told the news service that they accessed sellers' information to determine which products they should make under its private labels.

Amazon’s private-label business includes about four dozen brands and as many as 243,000 products. The former workers, as well as one current employee, said the rules prohibiting such access weren’t uniformly enforced, according to the WSJ. Former employees said using such data was a common practice and was routinely discussed in meetings they attended.

One Amazon employee said it was standard practice for workers to access private data that could provide a window into which products make the most money and how they should be priced.

“We knew we shouldn’t,” one former employee told the WSJ. “But at the same time, we are making Amazon-branded products, and we want them to sell.”

Last summer, Nate Sutton, an Amazon attorney, told Congress that they don’t use individual sellers’ data to compete with businesses on the company’s platform.

Knowing Amazon’s profit per unit on third-party items could ensure that prospective manufacturers delivered higher profits on an Amazon-branded competing product before deciding to produce it, said another person who accessed the data.

But Amazon insists the practice is not in play. "We strictly prohibit our employees from using non-public, seller-specific data to determine which private-label products to launch," a company spokesperson told Business Insider. "While we don't believe these claims are accurate, we take these allegations very seriously and have launched an internal investigation."

Nearly 60 percent of Amazon’s sales are the result of third-party sellers, consisting of small and medium-sized companies that sell on Amazon’s Marketplace platform.

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