Economy

California and Washington are reportedly looking into how Amazon treats demand partners

California and Washington are reportedly looking into how Amazon treats demand partners”

Amazon used sensitive, confidential information about sellers on its marketplace, their products and transactions to develop its own competing products, according to a Wall Street Journal report in April.

The New York Times reported Friday that state investigators are probing the company in Washington, while the Wall Street Journal reported the same day that California is conducting an investigation into Amazon's alleged misconduct towards third-party merchants.

As a result of the report the House Judiciary Committee called upon Amazon chief executive Jeff Bezos to testify about its private-label practices.

Amazon's been facing increasing antitrust scrutiny from both the US and overseas over how the company aggregates data from these sellers and purportedly gives its own products an unfair advantage.

According to internal correspondence viewed by the Times, the Washington attorney general's office is in the preliminary stages of planning a probe that would examine whether Amazon makes it more hard for sellers to list their products elsewhere online.

The charges reportedly accuse Amazon of using data from its third-party sellers to compete against those sellers, for instance by launching similar in-house products. Amazon has denied implementing this practice. In addition to these charges of plagiarizing the competition, Amazon also has a well-documented history of headaches with counterfeit products and dubious manufacturers running rampant on its online marketplace.

More news: You can now send money, make payments over Whatsapp

Amazon faces increased competition scrutiny even as the pandemic sends its retail business skyrocketing.

On the other hand, both spokespersons for California's and Washington's attorney general of the United States offices refused to confirm or reject any examination when NYT asked.

It may also face European Union antitrust charges in the coming weeks over its use of data on merchants with whom it competes on its platform, Reuters reported last week, citing a source.

While the company claims that using internal data by its private label division is against company policy, too many seller complaints and investigations are exposing areas of concern.

Please head over to our Facebook Group for Small Business Sellers and interact with other small business owners.



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