Amazon Continues to Probe Employee Use of Third-Party Vendor Data, Jeff Bezos Says
30 Luglio 2020 - 1:31AM
Dow Jones News
By Dana Mattioli
Amazon.com Inc. Chief Executive Jeff Bezos said the company
continues to investigate the allegations behind a Wall Street
Journal article in April that detailed how Amazon employees used
individual third-party seller data to develop Amazon-branded
products.
Testifying before the House Antitrust Subcommittee in his first
appearance before Congress, Mr. Bezos faced repeated questions from
lawmakers in both parties about the story's findings. He noted that
Amazon has a policy prohibiting employees from using data on
specific sellers to inform decisions about launching or developing
its own products.
"I can't guarantee you that that policy has never been
violated," Mr. Bezos said, noting that the company was working to
better understand some of the anecdotes in the Journal's coverage.
Mr. Bezos emphasized that Amazon wants third-party sellers to
succeed.
Amazon has acknowledged that its employees can use and review
"aggregate" seller data, when there are multiple sellers of the
same product. The Journal investigation detailed examples of
supposedly aggregated data being derived exclusively or almost
entirely from one seller, according to former Amazon employees and
documents reviewed in the investigation.
In one example, an Amazon third-party seller called Fortem
accounted for 99.95% of the total sales on Amazon for its trunk
organizer over the course of a year. The product was sold through
its Amazon account and an Amazon clearance account selling Fortem's
returns. One other seller sold 17 units of the organizer in that
period, and Amazon private-label employees were able to access data
on Fortem for the purposes of creating an Amazon private-label
version.
Mr. Bezos faced detailed questions about how it defines
aggregate data. "Aggregate data would be more than one seller,"
said Mr. Bezos. When asked if Amazon allows the use of aggregate
data to inform private-label Amazon brands when there are only
three sellers for a product, Mr. Bezos responded: "Yes, sir." Rep.
Kelly Armstrong (R, N.D.) then asked if Amazon looks at aggregate
data when there are only two sellers for a product. Mr. Bezos
confirmed that it does.
On a few occasions, Mr. Bezos was unable to answer questions
about how Amazon's site operates, including one instance when he
wasn't sure whether a phone number is required to open a seller
account.
Mr. Bezos broadly defended Amazon's business practices and noted
the company's customer focus. He said the company has a team of
more than 1,000 employees that monitor potential counterfeit
products.
"The retail market we participate in is extraordinarily large
and competitive," he said, addressing broader concerns about
Amazon's power. "There is room in retail for multiple winners."
A number of lawmakers also asked specifically about a Wall
Street Journal article last week detailing how Amazon's
venture-capital fund had invested in startups and met with founders
and entrepreneurs and appeared to use the investment and
deal-making process to help develop competing products.
In some cases, Amazon's decision to launch a competing product
devastated the business in which it invested. In other cases, it
met with startups about potential takeovers, sought to understand
how their technology works, then declined to invest and later
introduced similar Amazon-branded products, according to some of
the entrepreneurs and investors.
Rep. Ken Buck (R., Colo.) called the Journal's stories about
Amazon's private-label practices and venture-capital arm troubling.
He said one allegation in the Journal's reporting "sticks out in
particular" and cited an example in the story about a startup
called Vocalife.
"These allegations are serious especially because the size and
scope of these practices couldn't happen without Amazon's
monopolistic control of the marketplace," said Mr. Buck.
Answering questions from another lawmaker, Mr. Bezos said he was
unfamiliar with the specifics about the lead example in the story,
which dealt with a company called DefinedCrowd. He promised to
provide more information to the committee.
"We are very concerned about this innovation kill zone that
seems to be emerging," said Rep. Joe Neguse (D, Colo.), after
asking Mr. Bezos about the story on Amazon's deal-making
process.
Ryan Tracy contributed to this article.
Write to Dana Mattioli at dana.mattioli@wsj.com
(END) Dow Jones Newswires
July 29, 2020 19:16 ET (23:16 GMT)
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