How Amazon’s Treatment of Third-Party Sellers Became an Antitrust Target in California and Abroad
Antitrust scrutiny of Amazon is intensifying as new details reveal how the company treats third-party sellers in its marketplace. Regulators in California, Washington state, and Europe are reportedly homing in on Amazon amid reports that the company uses its colossal size to compete directly with other retailers on Amazon.com.
The latest inquiries build on other investigations into Amazon's business practices, signaling that the company may have grown too powerful to escape regulatory oversight.
How did Amazon get here? By doing the same thing retailers have done for decades — with a big technology boost.
Amazon has been developing its own private label products for years, most visibly under the AmazonBasics name, and marketing them alongside products from third-party sellers. It's the same tactic deployed by big box stores and the reason you'll see Kroger-branded tissue sold for $1 less than the Kleenex brand on the shelf next to it.
The difference is the powerful technology that allows Amazon to supercharge insights about shoppers and sellers. Amazon captures 38.7% of online retail sales in the U.S., according to the latest data from eMarketer, and knows how often customers search for specific items and how well products are selling. Amazon also owns an increasingly large share of distribution for third-party retailers by offering logistics and delivery services.
Those advantages are drawing scrutiny from regulators in two states. California asked Amazon about whether it uses data on third-party sellers to inform its private label strategy, according to The Wall Street Journal.
Meanwhile, Amazon's home state, Washington, is looking into whether Amazon makes it difficult for retailers to sell their products on other websites, the New York Times reports. That question is the subject of several proposed class-action lawsuits over a now-defunct Amazon policy that kept third-party sellers from offering their products at a lower price than they did on Amazon.com.
The European Union is poised to bring charges against Amazon for anti-competitive behavior because of the company's private label strategy, according to the newspaper.
Amazon declined to comment on the latest developments but has defended its marketplace practices as industry standard in the past.
The Journal previously reported on Amazon employees using third-party seller data to develop in-house products that compete with those sellers. An Amazon lawyer told Congress last year, "We don't use individual seller data directly to compete with them." However, the newspaper's investigation revealed ways that even aggregated data could provide insights into top-selling third-party products in many instances.
Amazon is also under scrutiny by U.S. federal officials.The House antitrust subcommittee has been investigating Amazon's marketplace practices for months. After reports cast doubt on an Amazon attorney's testimony from last year, the subcommittee asked Jeff Bezos to testify. Amazon initially appeared reluctant but agreed to send Bezos "at a hearing with other CEOS this summer" in a letter to lawmakers reviewed by The New York Times.
The subcommittee is asking the CEOs of Amazon, Alphabet, Apple, and Facebook to testify this summer as part of a probe into big tech. The inquiry could result in a new approach to regulating competition in the U.S. The current regulatory framework has allowed the nation's largest technology companies to accumulate incredible wealth and power. That has progressive politicians and economists rethinking how the U.S. regulates competition.
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More than a year ago, Darius Kemp, then a community manager at cannabis delivery app Eaze, realized the platform didn't have any Black-owned products on their menu.
Today he is Eaze's head of equity and change, spearheading a program for change and to prevent that from ever happening again.
Carolina Vazquez Mitchell's company dreamt is part of Eaze's new social equity partner menu.
Eliminating battery waste, developing new hair growth therapy, fixing carbon dioxide. These are among some of the ambitious problems that companies are trying to solve at the First Look SoCal Innovation Showcase beginning Tuesday.
Hosted by nonprofit Alliance for SoCal Innovation, the online event connects early-stage tech and life science companies with investors and serial entrepreneurs.
BioZen Batteries Aims to Solve Our Energy Storage Issues<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDI0Nzg5MS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyNTg3OTYyNn0.y9dSMjovB1GtsQ1SZhKiPTIJY3VW0XOE2YXd-JN1xYU/image.jpg?width=980" id="95064" class="rm-shortcode" data-rm-shortcode-id="c3ad9197ad70005802e6d34d6da3c29d" data-rm-shortcode-name="rebelmouse-image" />
Left to right: BioZen Batteries' co-founders Zach Rengert, Nate Kirchhofer and Eric Brigham.<p>Nate Kirchhofer, co-founder and CEO of <a href="https://biozenbatteries.com/" target="_blank">BioZen Batteries</a>, wants to make batteries that will outlive him.</p><p>Santa Barbara-based BioZen creates organic electrolytes, the active material inside a specific type of battery called a "redox flow battery." It's a different type of technology that differs from the lithium batteries often used in mobile applications like cars and phones. Only 5% of those get recycled.</p><p>BioZen's batteries are well suited for green, large-scale energy storage, Kirchhofer said. For example, batteries that help solar panels connect to the grid or provide backup during disasters when the power goes out.</p><p>Kirchhofer, an electrochemist, founded the company in June of 2019 with Zach Rengert, a materials chemist, and Eric Brigham, the company's CFO. Kirchhofer and Rengert met while getting their doctorate at UC Santa Barbara.</p><p>There hasn't yet been a push for sustainable batteries because it isn't economically incentivized, Kirchhofer told dot.LA. He said that his batteries are cheaper than competitors.</p><p>Kirchhofer's product fits into a growing renewable energy market and a social movement in which individuals want to do their part. He's worked for four startups but says this one is poised to make the biggest impact.</p><p>"If it's not our generation that solves climate change, there's not another chance. There's not another Earth." he said. "If we can make these batteries happen, we can truly integrate renewable energy and stop the petroleum-dominated energy paradigm we're part of."</p>
Amplifica's founder Dr. Maksim Plikus
Amplifica Treats Baldness with Mole Molecules<p>Back in 2013, Amplifica's founder Dr. Maksim Plikus began studying hairy moles. Though some find the growths unsightly, his work showed promise for baldness treatment.</p><p>He, along with colleagues at UC Irvine, discovered that molecules from moles that grow excessive hair can induce follicle growth when administered anywhere on the skin.</p><p>"As long as you can tease it out and replicate it in the form of purified molecules, you can achieve essentially what we think would be a novel, revolutionary solution to baldness," Plikus told dot.LA.</p><p>Plikus said his company is the first to solve hair loss by replicating cells from hairy moles to stimulate hair growth. At the moment, hair follicle research has emerged as a leading experimental model for studying stem cells.</p><p>By 2025, hair-loss products are projected to surpass $12 billion, Plikus said. But only two drugs are FDA approved and require daily treatment in the form of pills, which he said come with long-term side effects.</p><p>Amplifica says it's poised to put a more effective and convenient solution on the market. Pinkus' proposed product is a topical solution requiring less frequent application, like getting Botox injections a few times per year.</p>
FixingCO2 Aims to Recycle Fuel from the Air<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDI0ODM4My9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzMzA1ODA4MH0.9RqwD9zUN1et1kor8zNPj8WH2kOX6SrysdpRDFT5QMc/image.jpg?width=980" id="daa89" class="rm-shortcode" data-rm-shortcode-id="9851b177139c4b5e06bd9c96fb395083" data-rm-shortcode-name="rebelmouse-image" />
FixingCO2's team. CEO Eldar Akhmetgaliyev is at right.<p><a href="https://fixingco2.com/" target="_blank">FixingCO2</a> got its start on Mars. Like the name says, the company aims to fix the global carbon problem that's fueling climate change.</p><p>In 2018, co-founder Alma Zhanaidarova's professor and research group at UC San Diego received a grant from NASA to build out a reactor that makes renewable fuels and chemicals from carbon dioxide, often a byproduct of industrial waste. The technology was being developed in anticipation of a one-day human mission to Mars, where 95% of the atmosphere is carbon dioxide.</p><p>Now, the San Diego-based startup is commercializing their product for earthlings.</p><p>"It's a different application but the same core technology," co-founder Eldar Akhmetgaliyev told dot.LA. "Instead of making fuels from oil or any other fossil sources, we can make them essentially from air."</p><p>The team is developing the hardware to capture industrial emissions blamed for much of the Earth's warming. The product has significant application for the aviation industry, where planes are built to burn jet fuel that produces carbon emissions.</p><p>"These kinds of technologies provide them a pathway to decarbonization," he said. "They can use fuels made from CO2 so they're not contributing to climate change."</p><p>As fires burn through California and the Pacific Northwest, Akhmetgaliyev said there's urgency for innovators in the carbon tech market. "We're pretty much turning our planet into Mars," he said.</p><p>He said that by 2050, about 14% of overall carbon reduction will come from carbon capture and utilization (CCUS) technology like his.</p><p>"The market hasn't met its opportunity and with the effects of climate change being seen everyday, there's going to be more drive towards these low carbon technologies."</p>
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