Amazon is being accused of pushing its own products at the expense of more popular, better reviewed products from other companies.
Amazon is the world’s biggest e-commerce site, but the sellers that use it often have a love/hate relationship with the company. Many sellers have long suspected Amazon favors its own brands, something the company denied in testimony to Congress in 2019.
According to The Markup, however, Amazon does favor its own brands, or brands that are exclusive to its platform, even if that means promoting them over other brands that are more popular or have more reviews.
The Markup cites the example of Robert Gomez, founder of 4Q Brands, who worked tirelessly to get his Kaffe coffee grinder ranked in the top three Amazon search results. Gomez even paid Amazon $40,000 a month for advertising. Once Amazon introduced its own competing coffee grinder, and started carrying a partner exclusive, both of the competing grinders almost immediately started showing up in the top three search results.
Further exacerbating the issue is that many listings for Amazon brands or exclusives are not explicitly listed as “sponsored,” despite showing up in the part of the site reserved for search results. This is also in direct contradiction to a statement from company spokesperson Nell Rona, who said the company adds “Amazon brand” to its own products. The Markup found that only 23% of the Amazon-branded products it researched had that tag.
This behavior could land Amazon in hot water, according to Bill Baer, former director of the Bureau of Competition at the FTC, as well as former assistant attorney general in charge of the DOJ antitrust division.
“If basically you’ve got somebody with market power that is restraining competition both in terms of site access or where things appear on the site,” he said, “that is potentially problematic.”
Despite Amazon’s ethically — and potentially legally — questionable behavior, few sellers are willing to speak up. Blake Adami, VP of Government Relations, National Association of Wholesaler-Distributors, explained the problem to The Markup in an email.
“Our members are still very hesitant to speak out against Amazon for fear of retaliation, even anonymously.”
The Markup’s full report is well-worth a read, especially for anyone in the e-commerce industry, and illustrates why legislators are increasingly looking to crack down on anticompetitive behavior.