Amazon Says It Uses Third-Party Seller Data To Boost Business

Amazon, in a newly released document by the U.S. House of Representatives Judiciary Committee, said it uses “aggregated data” from sellers who use its platform in order to improve its own business, according to a report by Reuters.

The committee is conducting a congressional antitrust probe into the company, and it released Amazon’s answers to questions from the investigation Tuesday (Nov. 19).

Amazon said it also pulled data from its first-party sales as well as public sources, according to the document, which is dated Oct. 11.

The committee also released parts of answers from Facebook, Google and Apple.

Amazon said the data on individual sellers isn’t used to help the company’s own business, and it’s not used to make products of its own that routinely undercut other items. Amazon has about 158,000 private label products.

Many retailers and merchants who use Amazon expressed concern that the company was using data to make its own products. Amazon said the aggregating was a common sales tactic.

Amazon also said it sometimes asks a seller to lower prices when it sees the seller offering lower ones on competitors’ sites.

When asked about shopping results and rankings, Amazon said the algorithm it uses doesn’t consider whether the item has a competing private brand, but relies on metrics like whether the product is available, how cheap it is and how often it gets purchased. Metrics like whether the seller bought ads or whether the seller is a participant of Amazon’s logistics program don’t come into play, Amazon said.

The committee said it would have a full report by the “first part” of 2020.

The committee also asked about how many private label products are sold at cost or below cost, how much Amazon earns from its own brands, and how it decides to price things. Amazon did not give the committee details on these topics.