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Amazon said it doesn’t allow its employees to use nonpublic data related to its third-party sellers in order to determine new products to launch after the Wall Street Journal reported it has been doing it anyway.
The newspaper interviewed more than 20 employees of Amazon’s private label and reviewed documents that showed the company had used third-party sellers’ data to help design and price consumer items even as it publicly denied the practice in Congress and elsewhere, according to the report.
An Amazon spokesperson told FOX Business it’s against company policy to use the data and the company was launching an internal investigation into the issue.
“Like other retailers, we look at sales and store data to provide our customers with the best possible experience,” the spokesperson said. “However, we strictly prohibit our employees from using non-public, seller-specific data to determine which private label products to launch.”
Amazon employees accessed sales reports on items like a car-trunk organizer and seat cushion before Amazon brands launched their own competing products, the Journal reported.
It’s not unusual for grocery stores and pharmacies to put their store-brand equivalents of food or drugs next to name-brand items on their shelves. But Amazon’s private labels include more than 45 brands with 243,000 products, according to the Journal.
“Private label products are a common retail practice, and are good for customers,” an Amazon spokesperson told FOX Business. “Like countless other retailers, we offer private brand products to provide customers with more choices, better products and lower prices.”
Those in-house brands, not including Amazon devices like Echo speakers or Ring doorbells, account for 1 percent of Amazon’s annual sales, according to the report. Meanwhile, third-party sellers made 58 percent of Amazon sales as of 2018, according to a company letter to investors.
However, the Journal reported former executives said they were frequently told that Amazon brands should account for more than 10 percent of the company’s retail sales by 2022.
Amazon regularly touts the tools it makes available to its third-party sellers. The company said it launched more than 225 last year as part of a $15 billion investment “in third-party seller success.”