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The Land of Trillion Dollar Goliaths | Amazon product cloning

Amazon has a unique market position that almost no one else has at the same scale. This market position was gained by practices that many continue to criticize.

According to The Wall Street Journal:

  • Some Amazon employees have said that they access 3rd party seller data in order to gain an edge in the market (its own store) for its private label products.
  • The claim from employees fly’s in the face of Amazon’s previous insistence that they do not access non-public data.
  • The data in question is access by Amazon employees for the explicit purpose of what features to add to a product and how to price it.

Related Reading: Antitrust Stories

20+ former Amazon employees say that they accessed individual seller information for the aim of deciding which products they should make under its own private labels. At least by now we have seen the results of this in their online store, in that some of the most popular 3rd party products are undercut by cloned products under the Amazon Basic brands and other private label brands.

Amazon even told congress and other antitrust regulators that it doesn’t do this, but again we have seen the results to prove this out and now those results are corroborated by this report for The Journal.

When they were criticized for these practices Amazon claimed that their private label brands only account for 1% of sales in Amazon’s online store. According to The Journal, former executives have said Amazon believes their private label brands will account for 10% of retail sales in just 2 years. Now is the time to hold Amazon to account before their private label market share grows to large. Currently there are a few antitrust probes from the DOJ and FTC. The EU is also investigating Amazon.

Source: The Wall Street Journal