Amazon's private-brands team in India ran a "systematic campaign of creating knockoff goods and manipulating search results to boost its own product lines," according to a report Wednesday from Reuters.
The employees used internal data to copy products sold by other companies on the platform in India, said Reuters, citing "thousands of pages of internal Amazon documents." They also reportedly rigged search results so the company's private-brand products would appear among the first two or three product listings. Two executives at Amazon reviewed the India strategy, according to Reuters.
An Amazon spokesperson said the company believes the allegations are "factually incorrect and unsubstantiated," adding that Amazon strictly prohibits the "use or sharing of non-public, seller-specific data for the benefit of any seller, including sellers of private brands." The spokesperson also said Amazon displays search results based on relevance to a customer's search query and doesn't favor its own private brand products.
Aside from claims that Amazon is copying products from its own merchants, the company faces broader issues of authenticity. Counterfeit and banned goods have persisted on Amazon's marketplace, like FDA-banned infant sleeping wedges that the agency says have caused suffocation deaths. Additionally, Amazon has banned several merchants for ginning up buzz by offering refunds to customers in exchange for positive reviews in violation of the company's policies. The company has acknowledged that this problem is ongoing.
Amazon has previously denied accusations of using data from third-party sellers to develop and sell its own products, which were detailed in an April 2020 Wall Street Journal report. In July 2020, then-Amazon CEO Jeff Bezos told Congress that the company prohibits using seller-specific data to aid its private label business. In March of 2021, bag maker Peak Design called out Amazon for copying its Everyday Sling product, previously sold on the e-commerce giant's online marketplace, with its own Amazon Basics' Everyday Sling bag.
The company faces increased regulation in this area if a bill proposed in June becomes law. The American Choice and Innovation Online Act would make for an online shopping platform to use internal data from merchants to support its own offerings on a marketplace or to favor its own products over those from another merchant competing on the same platform. The bill has gone through markup in the House Judiciary Committee but is not currently scheduled for a vote from the full House of Representatives.