Amazon reportedly used merchant data, despite telling Congress it doesn’t

Enlarge / An Amazon warehouse on a sunny day in Germany on April 2, 2020. (credit: Patrick Pleul | picture alliance | Getty Images)

Amazon accounts for about a third of all US Internet retail sales, but it didn't get there entirely on its own. It did so, in part, with the assistance of hundreds of thousands of smaller vendors who signed up to sell their goods on Amazon's third-party merchant marketplace, which accounts for more than half the company's retail sales. In theory, those agreements were beneficial for all involved: shoppers could easily one-stop-shop for products, merchants could rely on Amazon's front and back-end infrastructure instead of building out their own, and Amazon could get a nice consistent cut flowing in.

The calculus of who benefits most from these arrangements, however, has changed over time. Amazon now offers a wide array of its own in-house brands, making it a direct competitor to many of the merchants who rely on its platform to reach consumers. That would be challenge enough, but the behemoth also captures sales data from those third-party vendors, then uses it to launch its own product lines and undercut the smaller firms, The Wall Street Journal reports.

The WSJ reviewed internal company documents showing Amazon executives requesting and accessing data from specific marketplace vendors, despite corporate policies against doing so. More than 20 former employees told the paper the practice of flouting those rules was commonplace. "We knew we shouldn't," one former employee said of accessing that data. "But at the same time, we are making Amazon branded products, and we want them to sell."

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