Amazon knew seller data was used to boost company sales

Backfiring would imply things are changing or getting worse for them. And I'm certain that we're not at "peak Amazon."

Worse, Americans especially are becoming numb to top down abuses. Not only am I worrying that this is not backfiring, but I'm also worried about the precedent we're setting by being so tolerant to it.

This seems to be very common. https://www.forbes.com/sites/bobevans1/2018/07/18/walmart-ci...

Unless I've grossly misread these articles, Amazon were using third-party seller data from sales on the Amazon.* websites.

The data was on their (Amazon.com) sales database (who sold how much of what, for how much). They weren't accessing (hacking) data hosted on AWS (a database hosted for an online shop not related to AWS)

Those two things are very different.

EDIT: To put this into perspective. Any store (online and offline) that has its own branded products, probably looks at sales of the existing non shop branded products and makes an own branded version when it looks like it will be successful ("Panasonic SD cards are selling well, and look like they have good margins so let's bring out our own version"). What Amazon is being accused of is using sales data from 3rd party sellers on Amazon.*

Not only is there an audit trail for what I do internally, but any calls I make to review customer data is published in the customer's CloudTrail trail. So the customer can audit when their information is accessed.

This report has 0 to do with AWS.

AWS is certified to comply with a bunch of cloud/data standards/regulations such as HIPPA, PCI DSS and so on. Even if a single evidence is found that AWS is breaching them the consequences will be severe.

Also for Amazon as a whole it makes very little business sense to lose a AWS customer paying hundreds of millions of dollars a year just to gain some marginal advantage in retail space. Note that Amazon retail already is operating at the limit when it comes to having accurate sales information about its competitors. It has crawlers to scrape online data and employs hundreds of analysts to build multiple models. And it’s been on this for close to three decades. So trawling AWS customer data is net negative for Amazon. It doesn’t take much for competitors to move away to Azure of GCP.

So it’s in AWS’s best interest to be absolutely fool proof about not going anywhere near customer data. Dealing with business data is a whole lot different ball game compared to collecting tracking customer data like Google does. Businesses will be unforgiving.

The article says someone used data from Amazon(the online store), not AWS. You should absolutely use Azure(or GCP) if it makes more economic sense for you but migrating from AWS to Azure because of this may be an overreaction.

But Amazon is also a marketplace. In that role it acts as a "rentable retail space". Using the data of the retailers in your marketplace to decide what to make/wholesale and then retail is another layer.

You could easily argue that it reduces to the same thing. But societally we've excepted that the retailer is a full layer in the system and gets full access to the data flowing through it. The marketplace itself is historically more of a fee-for-use type of thing, so its not an ingrained concept for us.

There is a fundamental difference between being a retailer and providing a retail platform.

All Costco would really have access to is how much they've bought and how that has performed for them. Meanwhile Amazon is providing a platform for companies with a policy that they will only use their data to help them, which is what is allegedly not happening.

So, even if we had our own competing labels for some products, the manufacturers would never be left in the cold with unsold stock (if for example we chose to drop one brand or run a promotion for our own).

I struggle with it as well because conceptually in my mind this is the same as a grocery store using customer buying data to inform itself. Grocery chains have been using private label brands to compete with name brands for years. Check your cereal aisle for the "fruit loops" in the back without a box that are ~50% cheaper than the name brand boxed real fruit loops.

I never saw this as wrong growing up. I saw this as the store offering a cheaper comparable and consumers were able to chose which they want. In fact, the grocery store also controls what is on the end cap and what is on top and bottom of each shelf.

I think the landscape is heavily skewed in favor of the dominant online retail merchant. This skew and dominance is what causes people to claim afoul behavior is going on.

Is this fair to the vendors?

Each captured sales data and built private label alternatives to key brands on a regular basis. Small differentiator in the case of Costco is that they have a practice (though not a policy) of offering the leading vendor the opportunity to produce the private label before doing it themselves. But that’s a small detail.

Besides the fact that headlines about this get traction, there is a differentiator with Amazon in that they actively market themselves as a marketplace for small businesses in the way we’ve come to view Shopify. Costco and Walmart were always very clearly retailers...they buy stuff and sell stuff at a margin.

So while I think a lot of the blowup about this is overdone, there is a legitimate argument about the difference between how Amazon markets itself and what it does. But, frankly, for anyone with any level of experience with retailers or, frankly, tech platforms, this kind of capture behavior should be expected.

It's 100% different. Costco doesn't make any of the Kirkland brand products. Their suppliers do. And Costco usually only carries one brand of, say, batteries. They go to Duracell and say "We want to buy X Duracell batteries and Y Kirkland batteries from you over the next Z years". If Duracell doesn't want it, their next call is the same thing to Energizer.

Basically, Costco says to their suppliers "We want to give you X high margin sales and Y much lower margin sales." And you know that going in. And are ecstatic because all those sales would otherwise go to your competitor.

Amazon says "here's a flea market", then uses their security cameras to see what items are selling at everyone's stalls. The next day, the stalls of the people who run the flea market (right next to the front door) also have the best selling items. Oh, and their tables are infinite and maybe they also fuck with the listings on the map to make it harder to find that those items are also at your booth.

In contrast Amazon takes on zero risk. It snoops on the data of transactions, and then launches competing products.

To make it clear, Here you should consider Amazon.com different entity than Amazon Seller Account. Now would you sell on amazon.com if amazon.com leaks your data to "amazon seller account" owner to boost his sales of a similar product, which you sell.

Moral thing is, Amazon seller division who deals with product directly sold by Amazon, should never have access to the data of other sellers.Fullstop.

When they start by doing independent market research, selecting a product, building/sourcing it and marketing it, then analyzing data generated by their own sales of these products in their own stores (brick & mortar or online), they are the same.

The DIFFERENCE is that Amazon also hosts other sellers and uses THEIR data.

So, an entrepreneur comes along having designed, arranged fabrication, and imports a product, then pays fees to sell it on Amazon. Amazon now uses THE MERCHANT's own data against them to notice the successful product, decide that it will be profitable, then search out the same manufacturer, offer a better deal, start selling on their own market as Amazon Basics, then kick the original seller off the market. [1], [2] It happens repeatedly enough to call it systematic.

So, if you are only marginally successful, you can continue selling unmolested.

But, if you find good success, Amazon will use your data to chop the top success zone right off of your business, after charging you for services while you spend decades building it.

It is even better than Zuckerberg's plan - at least Farcebook doesn't charge you to hijack your data for their purposes - Amazon charges you AND hijacks your data.

Just because it evades existing laws does not make it right.

I will certainly not be selling anything on Amazon that either 1) I'm 100% certain cannot be reproduced elsewhere or 2) I only intend to be a small or temporary market.

[1] https://www.wsj.com/articles/amazon-competition-shopify-wayf...

[2] https://www.hitc.com/en-gb/2020/12/24/amazon-tripod-company-...

Costco is legally a "reseller" that purchases items from manufacturers/distributors (at wholesale prices) and "resells" them to customers. (Note: only a tiny fraction (<1%) of Costco's inventory is sold on a consignment basis, meaning that the manufacturer/distributor only gets paid for units actually sold on. This arrangement generally only applies to some new products being sold on a trial basis.)

Amazon is also a reseller of items sold through the Amazon.com seller...but not for items "sold" by third-party merchants. The distinction is that for Amazon.com seller sales, Amazon has legally purchased the inventory sold, even if the payment terms may more closely resemble consignment transactions than wholesale transactions.

AmazonMarketplace is a software vendor and data should belong to sellers only.

But perhaps one way to resolve this dissonance is to consider that Costco's behavior is anti-competitive too. They are a beloved brand, but that doesn't mean our emotional attachment to Kirkland products is an accurate reality-based moral stance.

Who are Costco customers?

Who are Amazon customers?

Costco has to buy the goods they sell. If it's on a shelf, Costco wants it to sell. If they don't want something to sell, they stop buying it/carrying it. They can't make any money by buying a competitor's product and letting it sit in a warehouse.

The incentive structure for Amazon is bad for everyone else. Their ideal profit scenario is to have warehouses full of other companies' stuff that never sells, and to sell an Amazon branded alternative to each consumer with demand. Costco's ideal profit scenario is to never buy third party products and only sell Kirkland goods (assuming demand stays the same). Amazon needs to pick one; they're either a marketplace, where their ideal profit scenario is to sell literally anything they have without preference, or they're a retailer and their ideal profit scenario is like Costco.

only seems worse because amazon is so big, and so monopolistic, that a lot of people hold them to different standards.

It's the same idea that people expect a rich person to pay more taxes, or contribute more philothropically.

Amazon told 3rd party sellers it wouldn't use their sales data for its own sales (and possibly contractually agreed not to? - unsure here), and it now seems that they broke this promise.

How other stores operate doesn't matter. Amazon said it wouldn't do this and used that trust to attract sellers and grow their platform.

Walmart has faced similar questions as well, but as much of a monopoly/monopsony as Walmart is, it's far less than what Amazon is. Moreso in non US advanced countries that actually enforce the anti trust regulations in their laws.

Amazon is both a retailer in the sense that they sell products, but also owns the entire marketplace as well.

Unlike other retailers, who are front and center that they own the sales data (some even sell it back to you, the 3p merchant), Amazon explicitly states they will not use that data (except in aggregate). Bezos' statement that he cannot say for sure if the policy has been violated is an admission that it has, and is even encouraged. It's very possible and easy in fact to enforce a chinese wall around that data. That they have chosen not to -- that the data is possibly available at all -- means that they expect successful PMs to use it on the down low.

It's clear they have this policy so as to attract merchants. So to turn around and violate it is a pretty severe issue.

Second, Amazon is in a position to actually produce or re-brand products under their own very strong brand. Unlike other retailers whose store brand is always the discount and less desirable option, and generally not taking away sales from the premium product.

walmart.com does

There's got to be a dark underbelly to Amazon going on at the same time. My wife is bored enough that she's taken up a fight with Amazon over some bluetooth earbuds she returned. The earbuds themselves just simply didn't work; they'd do things they're not supposed to and not things they are supposed to so she posted a review saying such.

The seller started contacting my wife trying to bribe her to change her review to 5 stars. My wife updated the review as such saying the seller is trying to coerce her to change her review but she won't budge.

Amazon has now removed my wife's review saying she's "harassing" the seller despite having emails to prove the seller is the one who won't stop contacting her even though she's explicitly requested such. So my wife is battling Amazon asking them to re-instate the review or give her a real reason why it was removed.

It really is to the point where I won't buy from Amazon anymore unless I have no other choice. I don't trust a single thing about their review system. I don't trust a lot of products being unopened/untampered.

Maybe I am missing some monopoly related issue here, but I would love to know more.

When a group of people are highly incentivized to do something bad, they'll conspire to do something bad. Don't call me a conspiracy theorist.

>“I can’t guarantee you that that policy has never been violated,”

4th sentence in the article:

>identifying one case in which an employee used the access to improve sales.

So only violated once...

At what point do you nationalise? Is there a next technology which will be stifled if it was nationalise?

Does nationalisation sttifle innovation?

I've been wrestling with these questions as I actually don't like Amazon for all the reasons that have been well publicised ... but their customer service is excellent.

Which sets me against a string of recent bad experiences with local suppliers, getting stung, and thinking ... well, if Amazon treat me better, why shouldn't I move away from local suppliers and stick with the monopoly? Which goes against a lot I believe in.

I guess the problem is it's putting a lot of trust in Amazon. Which is itself an argument for nationalisation. I don't know.

https://stallman.org/amazon.html

> We should not allow a company to have a share over around 10% of any market. If in a certain field a single dominant company is beneficial for society, that means it is a natural monopoly, and should be served by a regulated utility.

No, those Driscoll strawberries in March didn’t come from upstate New York farms.

Edit: Replaced AWS with Amazon

They've such a volume here in India that since Amazon has got here, traditional LTL logistics soared in price wayyy higher

Amazon has completely revolutionised logistics here in India, you'll have hard time sending a box from point A to point B cheaper than what Amazon offers.

We are at a point where Amazon sells things much cheaper shipped to your door than a shop near you. (If you don't live in a metro city highly likely, the price which Amazon offers, local shops simply can't beat them)

And in India something like 60-70% people live in small towns and villages, traditional family owned distribution networks are failing to compete with Amazon, yes the ones which power most of the shops in the town.

I maintain, the traditional family owned distribution networks were even more exploitative (screwing over both customers and their workers) in India atleast compared to what Amazon offers.

Amazon delivery agent here are guys from low economic class and often from villages nearby. I am glad my purchases are helping these people survive than the "several property owning shopkeeper near me" competing with me in the real estate market while simultaneously ripping me off on the price on various tools.

Few years ago I was working for such family owned distribution networks and I never seen such miseries in life, truckers were often not paid at time, often driving trucks which hardly get any service (dangerously), the axel could become rocket anytime while on road. Amazon has only brought best practises to us, they've regular vehicle maintenance schedule, drivers get paid on time. Amazon delivery agents are some of the happiest people I've met despite working so hard, they are always smiling while delivering stuff to me.

The distribution agents were regularly fired without payment (it's not completely organized sector so lots of labor operate in grey area, where if they don't get paid don't have any legal recourse and most likely no one will believe if they ever worked for the person they are claiming to have rendered their service to. I am glad, the nepotistic and exploitative power nexus of family owned distribution networks is dying.

Easy return was never available in India, and you risked getting "death stares" from the shopkeeper if you ever returned anything to him because of quality issues of the product.

Other than this, most of the times I had seen "young girls" walking into market and getting "40% discount" by some thristy shopkeeper and they wouldn't do same for a guy ever, atleast this form of descrimination is dying with Amazon.

And honestly speaking, if a lot of Amazon executives in Bangalore and Gurgaon are getting rich, it's well deserved for what they've done for the nation.

I forgot to mention, we've many Amazon competitors but primarily Flipkart - well, getting them to replace/return anything has been tough for me, maybe because I live in a small town, I don't say but I get all my packages in 2 days from Amazon (without prime), while Flipkart takes 5 days here minimum.

What would I like to see Amazon change?

1. Make it possible to sell low value items which cost less than 200 and aggregate it before it's shipped to customer and charge customer shipping on aggregate weight shipped for these small combines. Sometimes it's very difficult when you've to order small items and pay 150-200 shipping on each item. These can be "no return combine", I will not bother returning such low value item, so Amazon saves overhead and additional costs.

2. Please revolutionze hardware space for retail buyers, stuff like "steel sheets, MDF, nail, bolts, nuts" - we don't have any Homedepot or Lowe's, we really need it and my hope is only on Amazon. Other countries like US has Homedepot where u can get most of the hardware fittings while this space is seriously lagging in India, everyone uses different naming for a spare part, etc...we don't even have anything like "McMasterCarr".

Secondly, that isn’t what sellers want. Many sellers use Amazon to fulfill their orders. Amazon is far more than just a “market stall”.

Amazon has issues, but "nationalizing" it would not ease those issues in fact in most ways it would make them worse.

Should be merged with UPS.

I also believe NBA should be nationalised. All teams should be owned by cities and revenues used to fund schools etc

oof. Amazons actual website is frankly horrible, but i shudder to think how terrible it would be if it was run by the government. I'm cringing at the thought. There would just be an endless stream of news about gross mismanagement, incompetence, wasting taxpayers money ad nuseaum. No. The only thing that could possibly be worse then Amazon in its current format would be if it were run as a government enterprise.

And to the whataboutism; "who says Amazon doesn't have those problems etc, it's different. I don't have to be bothered so much by the internal affairs of a private company. A government company otoh, it would just be all over the news.

And anyone selling through any platform where they've all data let it be supermarket chain or e-commerce platform, should understand the risk that their data can be used to compete with them if you realize risk is not worth pay off, prefer selling on own website - it's not hard these days. No I mean, yes it's still hard to get eyeballs on your product but to list in Amazon, you need to pay Amazon tax.

In traditional retailers like Costco, if you are a product maker and supply Costco, you don't own any data from the sale of the product--Costco owns that data. In fact, you will have to pay for that data from data brokers (Retail Solutions Inc for example) if you want it.

Every brand must estimate their competitors market shares, sales volumes, media spend, and actively track promotional activity - while retailers have a massive slice of this information, namely Amazon. Not only that they control their own "shelves".

In my point of view they shouldn't be allowed to compete if they are using competitors data without their consent... and that's the catch, it's Amazon data as well, so the only solution is: either Amazon is a market place or a retailer.

Gotta love how AWS/GCP terminate your https and can read all of your api traffic.......

How is Amazon "too big to fail" in your opinion? That phrase "I think they're too large", it means that a business is so central to the functioning on the broader economy and to several other industries that their failure would tank the whole economy. Think Boeing or JP Morgan Chase Bank.

> and have all the money to buy laws,

What exact laws has Amazon bought?