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In a shocking news story that reminds me of the early days of Amazon FBA, Internal Amazon documents have revealed that the giant has been knocking off products on its platform in India and exploiting its vast database to promote its own items in India at the expense of third-party sellers. The documents include business plans, emails, and strategy papers. However, Amazon has said these accusations are untrue.
The documents revealed how the company's “private-brands” employees in India secretly copied third-party sellers' products and then offered them on their website. A 2016 strategy report shows that the team also rigged the platform's search results so that Amazon's items would scoop top three positions.
The documents also show that these Amazon India employees studied proprietary data about third-party brands, including customer returns information with an aim of replicating target products.
The 2016 internal report laid out the company's strategy for "Solimo," a brand initially created by Amazon for the country's market. The plan was simple, "use data from Amazon India to create products and then leverage the Amazon.in website to market the items to shoppers."
This project's impact has spread internationally. Thousands of Solimo-branded household and health products are now on Amazon.com.
Furthermore, the 2016 document, titled "India Private Brands program," revealed that its workers working on its private labels planned to team up with the manufacturers of targeted products for copying. As per the document, it is because the manufacturers use "unique processes which impact the end quality of the product."
The document stated that "it is difficult to develop this expertise across products and hence, to ensure complete matching of quality and reference product, we decided to only partner with the manufacturers of the particular item."
US Senator Elizabeth Warren, a long-term critic of this giant, said, "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." According to her, it's time to break up the company.
Several brick-and-mortar retailers in India want the government to investigate these allegations.
"Amazon is causing a great disadvantage to the small manufacturers. They are eating the cake that is not meant for them," Praveen Khandelwal of the Confederation of All India Traders said.
In response, Amazon said that it "believes these claims are factually incorrect and unsubstantiated."
This is the second case where Amazon's own internal documents have suggested its shady practices.
Most Amazon pro sellers remember the case years ago, where Amazon’s own employees who worked on private label products accused the e-commerce giant of exploiting proprietary data from other merchants, rolling out competing merchandise, and doctoring search results to boost the revenue from Amazon's own products.
In 2020, Jeff Bezos, Amazon founder, said in sworn testimony before the US Congress that the company prohibits its workers from using individual merchants' data to increase the sales of its private-label business.
December 2021 Machete Systems.
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