US tech giant Amazon has landed in deep trouble as an investigative report by Reuters news agency based on internal Amazon documents, shows the U.S. company ran a well-oiled campaign of copying goods of other brands and manipulating search results to boost sales of its own private brands in India.
The report said that “manipulating search results to favour Amazon’s products, as well as copying other sellers’ goods, were part of a formal strategy at Amazon – and that at least two senior executives of the company had reviewed it.”
The development comes at a time when Amazon is already facing an inquiry by the Competition Commission of India for allegations of promoting select sellers on its e-commerce platform and unfair business practices. Amazon had moved the Supreme Court to stall the investigation but its plea was rejected. The new facts that have come to light are bound to strengthen the CCI case against the US tech giant.
The Amazon documents reviewed by Reuters showed how the company's private-brands team in India secretly exploited internal data from its India unit to copy products sold by other companies, then offered them on its platform.
The company promoted sales of its private brands like AmazonBasics by rigging search results on its platform in India so that its products would appear “in the first 2 or three search results.”
Amazon has also been accused earlier by employees who worked on private-brand products of exploiting proprietary data from individual sellers to launch competing products and manipulating search results to increase sales of the company’s own goods.
However, in a sworn testimony before the U.S. Congress in 2020, Amazon founder Jeff Bezos explained that the e-commerce giant prohibits its employees from using the data on individual sellers to help its private-label business. Bezos could now land in serious trouble for misleading the US Congress.
U.S. lawmakers cutting across party lines reacted to the Reuters report and demanded action against Amazon. Similarly, in India brick-and-mortar retailers said the government should launch an investigation into Amazon’s operations in India.
Ken Buck, a Republican on the House of Representatives antitrust subcommittee, said on social media, "These documents prove Amazon engages in anticompetitive practices such as rigging search results and self-preferencing their own products over competitors."
"More concerning, it contradicts what Jeff Bezos told Congress," the Colorado lawmaker said. "Amazon and Bezos must be held accountable."
U.S. Senator Elizabeth Warren, said on Twitter and Facebook : "These documents show what we feared about Amazon’s monopoly power — that the company is willing and able to rig its platform to benefit its bottom line while stifling small businesses and entrepreneurs."
"This is one of the many reasons we need to break it up," she said.
In response to questions on the Reuters report, Amazon said, "We believe these claims are factually incorrect and unsubstantiated". The company did not elaborate. It added that Amazon displays "search results based on relevance to the customer’s search query, irrespective of whether such products have private brands offered by sellers or not."
The Confederation of All India Traders which claims to represent 80 million retail stores in the country said the government must launch an investigation into Amazon.
The Alliance of Digital India Foundation, a nonprofit organisation representing some of India’s biggest startups also in a blog post urged the Indian government to take action against “Amazon’s predatory playbook of copying, rigging and killing Indian brands”.
Ashwani Mahajan, co-convenor of Swadeshi Jagran Manch which is the economic wing of the RSS, said on Twitter : "I call upon people of this country to #boycottAmazon,”.
Also read: ED seeks info from Amazon over alleged flouting of FDI rules
