Amazon Accused of Using Seller Data to Develop its Own Competitive Products

A sensational investigation by the Wall Street Journal has found that Jeff Bezos-owned Amazon is allegedly using data from its vast network of third-party sellers to help develop its own private-label products, an allegation the e-commerce behemoth has vehemently denied. The investigation contradicted Amazon's messaging about how the company uses third-party sellers' data, including a testimony one executive gave to US Congress last year.

"Amazon.com Inc. employees have used data about independent sellers on the company's platform to develop competing products, a practice at odds with the company's stated policies," the WSJ report said on Thursday. The e-commerce giant has long asserted that when it makes and sells its own products and it doesn't use the information it collects from the site's individual third-party sellers.

Amazon denied the allegations in a tweet, saying they "don't use individual sellers' data to launch private label products (which account for only about 1% of sales)". The WSJ report prompted Massachusetts Senator Elizabeth Warren to reiterate that giant tech companies have too much power."My plan to #BreakUpBigTech prevents corporations like Amazon from knocking out the rest of the competition. You can be an umpire, or you can be a player, but you can't be both," Warren tweeted.

Amazon replied to Warren: "Sellers aren't being "knocked out" they're seeing record sales every year. Also, Walmart is much larger; Amazon is less than 4% of U.S. retail". Earlier, the WSJ report probe found that some Amazon executives had access to seller data that was then used to discover bestselling items they might want to compete against. Amazon has long maintained that it's against company policy to use such data to build products for itself. However, the findings did not go well with the top US regulators.

The US House Judiciary Committee has questioned whether Amazon misled Congress in sworn testimony. "This report raises deep concerns about Amazon's apparent lack of candor before the committee regarding an issue that is central to our investigation," House Judiciary Committee Chairman Jerrold Nadler (D-NY) said in a statement to the Journal. In a statement to Recode, Rep. David Cicilline (D-RI), who leads the House antitrust subcommittee that is investigating Amazon and other tech giants, said" "At best, Amazon's witness appears to have misrepresented key aspects of Amazon's business practices while omitting important details in response to pointed questioning. At worst, the witness Amazon sent to speak on its behalf may have lied to Congress".

House Judiciary Chair Jerry Nadler (D-NY) said: "We plan to seek clarification from Amazon in short order, in light of this troubling report." An Amazon spokesperson said in a statement that the company "strictly prohibit employees from using non-public, seller-specific data to determine which private label products to launch".