Amazon.Con? US Senator Calls E-Tailer A 'Monster', While Indian Retailers Seek Probe After Report On Its Malpractices

by Bhaswati Guha Majumder - Oct 16, 2021 10:00 AM
Amazon.Con? US Senator Calls E-Tailer A 'Monster', While Indian Retailers Seek Probe After Report On Its MalpracticesAmazon CEO Jeff Bezos (David McNew/Getty Images)
Snapshot
  • The report revealed that, at least in India, manipulating search results to favour Amazon's products, as well as replicating other vendors' products, were all part of an official policy at the e-commerce giant, which had been evaluated by at least two senior executives.

After a Reuters investigation revealed that Amazon.com had cloned products and skewed search results in India, US Senator Elizabeth Warren urged for the corporation to be broken up, while Indian retailers demanded a government investigation.

According to the shocking Reuters report based on thousands of internal Amazon papers, the corporation engaged in a deliberate strategy of generating knockoffs and manipulating search results in India, one of the company's fastest-growing regions.

The report revealed that, at least in India, manipulating search results to favour Amazon's products, as well as replicating other vendors' products, were all part of an official policy at the e-commerce giant, which had been evaluated by at least two senior executives.

As a result of the Reuters investigation findings, Amazon was chastised by American politicians on both sides of the aisle — especially, Democratic Massachusetts senator Warren.

While referring to the Reuters report, Warren tweeted: “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 stiffing small businesses and entrepreneurs. This is one of the many reasons we need to break it up.”

She also told CNN: “Once a monopoly begins to grow, it becomes a thing that goes on its owns.”

"Amazon starts off as the dominant book delivery service. And then it starts morphing into other products and becomes the dominant delivery service. Now, it's like a monster that has to be fed every minute," Warren added.

Similarly, Ken Buck, a Republican on the United States House of Representatives antitrust subcommittee, while referring to the report, said, "Amazon and Bezos must be held accountable."

As per Reuters, Amazon called the allegations “incorrect and unsubstantiated”. In its defence, the company said: "We display search results based on relevance to the customers, irrespective of whether such products are private brands offered by sellers or not."

The American e-commerce giant also noted that it "strictly prohibits the use or sharing of non-public, seller-specific data with sellers, including with sellers of private brands," and looks into complaints about its employees breaking the policy.

Indian Retailers

The latest investigation involving internal documents revealed how the company's India private-brands team secretly used internal data from its India branch to mimic products supplied by other companies and then offer them on its platform.

A group representing millions of Indian brick-and-mortar merchants on 14 October demanded the country's government to investigate Amazon.

Praveen Khandelwal of the Confederation of All India Traders said: "Amazon is causing a great disadvantage to the small manufacturers. They are eating the cake that is not meant for them.”

According to Alliance of Digital India Foundation, a nonprofit representing some of India’s biggest startups, the practices outlined in the Reuters investigation were "highly deplorable", casting doubt on Amazon's credibility “as a good faith operator” in the Indian startup ecosystem.

The group, in a blog post, urged the government to take action against “Amazon’s predatory playbook of copying, rigging and killing Indian brands”.

As per previous reports, Indian retailers have been claiming that foreign e-commerce giants such as Amazon and Flipkart engage in unfair business practices that harm smaller enterprises. But both the companies have denied such allegations.

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