Amazon Reportedly Used Third-Party Seller Data to Research and Launch Its Own Products
Amazon has long said that it doesn't use its advantage as the operator of a massive marketplace to compete with third-party sellers on that platform. But a new investigation by the Wall Street Journal found Amazon employees did use seller data when considering new private-label products.
Interviews with 20 former employees of Amazon's private-label team and internal documents revealed how the company used seller data to launch new products and inform pricing and other decisions. The report is inconsistent with statements that Amazon's attorney, Nate Sutton, made to Congress during an antitrust hearing last summer.
The findings: Employees responsible for getting new Amazon-branded products off the ground used seller information about pricing, popularity, and profits to inform their decisions, despite a policy forbidding the practice. In one instance, Amazon employees conducted a thorough report on a popular trunk organizer sold by a third-party vendor before launching a competing product in the same category.
What Amazon says: It's common practice for retailers to use information about which items are doing well in stores to launch private-label products. It's the reason you see Kroger-branded tissue next to the Kleenex. Amazon says its behavior is no different, though the company does have access to more vast and granular data than traditional retailers. Amazon told the Journal, "we strictly prohibit our employees from using nonpublic, seller-specific data to determine which private label products to launch," and said it is conducting an investigation.
Background: Amazon's role as a marketplace operator and seller in that marketplace has invited scrutiny from antitrust regulators in the U.S. and abroad. The subject came up during Sutton's testimony before Congress. At the time, Sutton said Amazon does not use proprietary data from individual sellers but does study aggregated data on products with more than one seller.
"We use data to serve our customers," Sutton said. "We don't use individual seller data directly to compete with them."
In context: The regulatory landscape for Big Tech has changed dramatically over the past few weeks because of the coronavirus crisis. Governments that once sought to bring down the hammer on big tech companies are now seeking their help in response to the pandemic. Though a variety of antitrust inquiries at the federal and state levels were underway before the outbreak, it isn't clear whether they will regain momentum going forward.
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I wasn't a believer until I saw him in action. At a Tom Ferry event at the Seattle Convention Center, I observed thousands of people worshipping Tom Ferry, then and now, a legendary real estate coach, as he doled out words of wisdom during his presentations.
In many ways, Tom learned from the best. His dad is Mike Ferry, also a legendary real estate coach. Tom started working in sales at his dad's company, the Mike Ferry Organization, at 19. He eventually earned the position of president.
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Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 75 companies and is incubating several more.
Despite — or in many cases because of — the raging pandemic, 2020 was a great year for many tech startups. It turned out to be an ideal time to be in the video game business, developing a streaming ecommerce platform for Gen Z, or helping restaurants with their online ordering.
But which companies in Southern California had the best year? That is highly subjective of course. But in an attempt to highlight who's hot, we asked dozens of the region's top VCs to weigh in.
We wanted to know what companies they wish they would have invested in if they could go back and do it all over again.
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Boiling<img class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzIyOC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY2MzI5MjYwMn0.h7Nq7GiwXTcg_7Io5WEXblFX0rWQHxn69RzluTh7n_Q/image.png?width=980" id="4e424" width="361" height="93" data-rm-shortcode-id="b53f9030fdb96b08d7cfdb5383c97bfb" data-rm-shortcode-name="rebelmouse-image" alt="Scopely logo" />
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Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.