Amazon monopoly

Amazon Scrutinized for Potential Monopolistic Practices on July 29, 2020

On July 29, 2020, Amazon was investigated by the House of Representatives over suspicions of monopolistic activities. The concern was that Amazon might be misusing sales data collected from third-party sellers to compete directly with them by launching competing products, thereby disadvantaging these sellers.

Data Collection Practices

The House of Representatives was particularly interested in how Amazon uses the sales data from external sellers to possibly gain a competitive advantage over these 'partners'. Amazon acknowledged that it collects and stores sales data on every product on its platform. This data is utilized for various purposes including business strategy, website optimization, and enhancing customer experiences.

Like any other company, Amazon analyzes market trends which they claim is the primary reason for collecting such extensive information.

Allegations of Data Misuse

The core question is whether Amazon misuses this data from third-party sellers. In his opening statement, Jeff Bezos (CEO of Amazon) admitted that while company policy prohibits employees from using third-party sales data to benefit Amazon’s own private label products, he could not guarantee that all employees comply with this policy.

Fairness and Legal Implications

Whether it's fair for Amazon to use this information is still up for debate. The U.S. government's actions moving forward are uncertain, but striving for a level playing field between third-party sellers and Amazon’s private labels would be a step in the right direction. How this will unfold remains to be seen. As the situation develops, only time will tell the full impact of these practices.