Amazon is disputing a Tuesday Wall Street Journal report alleging the company changed its algorithm to highlight its own products late in 2018 without publicizing the move.
The report lends credibility to 2020 Democratic presidential candidate Elizabeth Warren’s concerns that big tech companies like Amazon partake in anticompetitive behavior.
Amazon told the Daily Caller News Foundation, “The Wall Street Journal has it wrong. … The fact is that we have not changed the criteria we use to rank search results to include profitability.”
Amazon is disputing a Tuesday Wall Street Journal report accusing the company of quietly changing its algorithm to highlight products that are more profitable to the company, including its own products, late in 2018.
The report lends credibility to 2020 Democratic presidential candidate Elizabeth Warren‘s concerns that companies like Amazon partake in anticompetitive behavior.
“The Wall Street Journal has it wrong. We explained at length that their ‘scoop’ from unnamed sources was not factually accurate, but they went ahead with the story anyway,” an Amazon spokesperson said in a statement to the Daily Caller News foundation. “The fact is that we have not changed the criteria we use to rank search results to include profitability.”
“We feature the products customers will want, regardless of whether they are our own brands or products offered by our selling partners. As any store would do, we consider the profitability of the products we list and feature on the site, but it is just one metric and not in any way a key driver of what we show customers,” the spokesperson added.
Warren tweeted a response to the report Tuesday, saying, “The game is up. Amazon pretends to be a neutral marketplace platform, but it bulldozes competition by juicing the search results for its own products. Reports say even Amazon’s own lawyers identify this as an antitrust problem. The [Federal Trade Commission] must take action.”
The game is up: Amazon pretends to be a neutral marketplace platform, but it bulldozes competition by juicing the search results for its own products. Reports say even Amazon’s own lawyers identify this as an antitrust problem. The @FTC must take action. https://t.co/Gf95jDADUO
— Elizabeth Warren (@SenWarren) September 17, 2019
Internal Amazon employees disputed the company’s latest algorithm, WSJ’s article noted, citing people familiar with the project.
Amazon lawyers also reportedly rejected the algorithm proposal when it was introduced, saying it could create concern for regulators over allegations of monopolistic practices by Amazon, one person familiar with the project told WSJ.
“This was definitely not a popular project,” one lawyer said, according to WSJ. “The search engine should look for relevant items, not for more profitable items.”
Amazon private-label goods make frequent appearances on the first page of a product search, where most shoppers are likely to make purchases.
Warren’s presidential campaign has focused largely on policy to break up big take and promote more competitive markets.
“Today’s big tech companies have … bulldozed competition, used our private information for profit, and tilted the playing field against everyone else,” Warren wrote in a March Medium post. “And in the process, they have hurt small businesses and stifled innovation.”
“That’s why my administration will make big, structural changes to the tech sector to promote more competition — including breaking up Amazon, Facebook, and Google,” the Massachusetts senator added.
She also wrote in an April Twitter post highlighting a clip from a CNN town hall segment, “Giant tech companies have too much power. My plan to #BreakUpBigTech prevents corporations like Amazon from knocking out the rest of the competition. You can be an umpire, or you can be a player — but you can’t be both.”
Giant tech companies have too much power. My plan to #BreakUpBigTech prevents corporations like Amazon from knocking out the rest of the competition. You can be an umpire, or you can be a player—but you can’t be both. #WarrenTownHall pic.twitter.com/73y1002QVv
— Elizabeth Warren (@ewarren) April 23, 2019
Amazon responded to the tweet and town hall clip in another Twitter post, saying, “We don’t use individual sellers’ data to launch private label products (which account for only about 1% of sales). And sellers aren’t being ‘knocked out’ — they’re seeing record sales every year. Also, Walmart is much larger; Amazon is less than 4% of U.S. retail.”
Amazon Associate General Counsel Nate Sutton said during a July House antitrust hearing that accusations of the company promoting its own products on customers are “not true.”
He added the company’s “algorithms are optimized to predict what customers want to buy regardless of the seller.”
Federal Trade Commission (FTC) investigators are interviewing small businesses to see whether Amazon has affected their revenue in what could be another big tech antitrust probe, Bloomberg Technology reported on Sept. 11.
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