SUMMARY
Sellers believe that Amazon is using their data from third-party listings to push its own brands and private labels
Amazon CEO Jeff Bezos told the US Congress that he is unsure if the company is using the data, but said he’s looking into it
These lapses will affect approximately 5 Lakh third-party sellers on Amazon India, as per the vendors’ body
As small sellers are becoming increasingly dependent on ecommerce platforms due to the pandemic, several third-party sellers have demanded transparency on Amazon’s data practices and preferential treatment for in-house brands.
The All India Online Vendors Association (AIOVA) has also raised similar concerns with the Competition Commission of India (CCI), while five small sellers across categories have highlighted these concerns with Amazon India.
The development comes after Amazon CEO Jeff Bezos, on July 29 (Wednesday) told the US Congress that he cannot guarantee that the company isn’t accessing third-party seller data to develop its own competing products. Previously, the company had been denying these allegations.
Earlier this year, even The Wall Street Journal had reported that Amazon had accessed sales data from third-party sellers on its platform to develop its own-label products. Then a separate report added that Amazon had also met several startups for potential investments to develop its own brands.
Commenting on these reports, Bezos had said that he is aware about the articles and has been looking into the allegations. “I’m not yet satisfied that we’ve gotten to the bottom of it, and we’re going to keep looking at it. It’s not as easy to do as you would think because some of the sources in the article are anonymous,” he added.
Bezos had also noted that the company has a policy in place to safeguard the third-party seller data, but it’s a voluntary policy. He expects employees to follow it, “the same way as any other policy”. “I don’t think any other retailer even has such a policy. We would treat that like any internal policy, and if we found that someone violated it, we would take action against them,” he elaborated.
These lapses are expected to affect 5 Lakh Indian third-party sellers on Amazon, who have been questioning Amazon for its business practices for long. Sellers have time and again highlighted Amazon’s preferential treatment for certain brands, differential contracts, deep discounting and high commissions.
A seller listed on the platform told Economic Times that if they are not spending at least INR 20K per month on Amazon services, sales just don’t pick up, and even after that investment, you compete with Amazon’s own products on price. Chanakya Basa, managing partner at Knock Legal, who represents AIOVA, added that using competitors’ data to design private labels and selling it at massive discounts and discounted platform fee to preferred sellers are the issues flagged in India.
“Reforms are the need of the hour in our industry, and we can’t keep depending on self-regulation,” an AIOVA spokesperson added.
