U.S. Senator Warren urges Amazon breakup, retailers want probe after Reuters story

The report reviewing thousands of internal Amazon documents, found that the U.S.company ran a systematic campaign of creating knock offs and manipulating search results to boost its own private brands in India

October 15, 2021 10:41 am | Updated 10:54 am IST - NEW DELHI:

The report showed that, at least in India, manipulating search results to favour Amazon’s products, as well as copying other sellers’ goods, were part of a formal strategy at Amazon

The report showed that, at least in India, manipulating search results to favour Amazon’s products, as well as copying other sellers’ goods, were part of a formal strategy at Amazon

U.S. Senator Elizabeth Warren called for breaking up Amazon.com Inc and Indian retailers demanded a government probe of the company after a Reuters investigation showed the e-commerce giant had copied products and rigged search results in India .

The report reviewing thousands of internal Amazon documents, found that the U.S. company ran a systematic campaign of creating knock offs and manipulating search results to boost its own private brands in India, one of the company’s largest growth markets.

October 13th’s report showed that, at least in India, manipulating search results to favour Amazon’s products, as well as copying other sellers’ goods, were part of a formal strategy at Amazon, and that at least two senior executives had reviewed it.

The Reuters investigation drew bipartisan criticism of Amazon from U.S. lawmakers.

Linking to the story on Twitter, Facebook, Ms. Warren, a long-time critic of Amazon, said "these documents show what we feared about Amazon’s monopoly power— that the company is willing and able to rig its platform to benefit its bottom line while stiffing small businesses and entrepreneurs."

"This is one of the many reasons we need to break it up," she said.

Ms. Warren, a prominent Democrat, advocated the breakup of Amazon and other tech giants in 2019 when she was running for president. Since then, as a senator from Massachusetts, she has continued to apply pressure on companies like Amazon.

Ken Buck, a Republican on the House of Representatives antitrust subcommittee, also shared the story on social media, saying,"These documents prove Amazon engages in anti competitive practices such as rigging search results and self-preferencing their own products over competitors."

"More concerning, it contradicts what Jeff Bezos told Congress," the Colorado lawmaker said. "Amazon and Mr. Bezos must be held accountable."

Amazon did not respond to a request for comment on reactions to the report.

In response to questions for October 13th report, Amazon said, "We believe these claims are factually incorrect and unsubstantiated". The company did not elaborate. It added that Amazon displays "search results based on relevance to the customer’s search query, irrespective of whether such products have private brands offered by sellers or not."

Retailers, start-ups concerned

In sworn testimony before the sub-committee last year, Amazon founder Mr. Bezos said the company prohibits its employees from using data on individual sellers to help its private-label business. In 2019 another Amazon executive testified that the company does not use such data to create its own private-label products or alter its search results to favour them.

The Amazon documents reviewed by Reuters showed how the company's private-brands team in India secretly exploited internal data from its India unit to copy products sold by other companies, then offered them on its platform.

The company promoted sales of its private brands like Amazon Basics by rigging search results on its platform in India so that its products would appear, as one 2016 strategy reportput it, “in the first 2 or three … search results.”

A group representing millions of brick-and-mortar retailers said on October 14 the country's government must launch an investigation into Amazon.

"Amazon is causing a great disadvantage to the small manufacturers. They are eating the cake that is not meant for them," Praveen Khandelwal of the Confederation of All India Traders told Reuters. The group says it represents 80 million retail stores in the country.

Retailers say foreign e-commerce businesses such as Amazon and Walmart Inc's Flipkart indulge in unfair business practices that hurt smaller firms, allegations the companies deny.

The Alliance of Digital India Foundation, a nonprofit representing some of India’s biggest startups, said the practices detailed in the Reuters report were "highly deplorable", calling into question "the credibility of Amazon as a good faith operator in the Indian startup ecosystem".

In a blog post,the group urged the Indian government to take action against “Amazon’s predatory playbook of copying, rigging and killing Indian brands”.

A top official in the economic wing of the Rashtriya Swayamsevak Sangh, the ideological parent of Prime Minister Narendra Modi’s ruling party, urged consumers to shun the company on October 14.

"I call upon people of this country to #boycottAmazon,” Ashwani Mahajan, co-convenor of Swadeshi Jagran Manch, said on Twitter.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.