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Amazon knew seller data was used to boost company sales

615 points| giuliomagnifico | 4 years ago |politico.eu

438 comments

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[+] mk89|4 years ago|reply
Well, it's something that is slowly backfiring. It's under the eyes of everyone, and not enforcing such policy will only make it even worse for Amazon itself that eventually will end up selling only non-branded products. Finally it will be only another e-commerce like "ebay" used to be, and something else will replace it. Just enjoy the ride until you can.

PS: speaking out of experience, I had one time a talk to a director from an important online shop (top 3 in the country in that specific field) and "this sort of things" was exactly the reason why they chose to use MS Azure instead of AWS. Imagine how deep it can go. And I totally support that.

PPS: I don't understand the downvote. Please, be specific on why you disagree instead of just clicking on random symbols.

[+] anotha1|4 years ago|reply
Upvoted, but I disagree that it's backfiring.

Backfiring would imply things are changing or getting worse for them. And I'm certain that we're not at "peak Amazon."

Worse, Americans especially are becoming numb to top down abuses. Not only am I worrying that this is not backfiring, but I'm also worried about the precedent we're setting by being so tolerant to it.

[+] ahiknsr|4 years ago|reply
> I had one time a talk to a director from an important online shop (top 3 in the country in that specific field) and "this sort of things" was exactly the reason why they chose to use MS Azure instead of AWS. Imagine how deep it can go

This seems to be very common. https://www.forbes.com/sites/bobevans1/2018/07/18/walmart-ci...

[+] helsinkiandrew|4 years ago|reply
> "this sort of things" was exactly the reason why they chose to use MS Azure instead of AWS.

Unless I've grossly misread these articles, Amazon were using third-party seller data from sales on the Amazon.* websites.

The data was on their (Amazon.com) sales database (who sold how much of what, for how much). They weren't accessing (hacking) data hosted on AWS (a database hosted for an online shop not related to AWS)

Those two things are very different.

EDIT: To put this into perspective. Any store (online and offline) that has its own branded products, probably looks at sales of the existing non shop branded products and makes an own branded version when it looks like it will be successful ("Panasonic SD cards are selling well, and look like they have good margins so let's bring out our own version"). What Amazon is being accused of is using sales data from 3rd party sellers on Amazon.*

[+] whoknew1122|4 years ago|reply
Amazon != AWS. As someone who has access to customer data in AWS, I'm very limited in what information I can access (to the point where it actively makes my job in Premium Support harder than it would be otherwise). I also have to provide a legitimate business reason for access to data.

Not only is there an audit trail for what I do internally, but any calls I make to review customer data is published in the customer's CloudTrail trail. So the customer can audit when their information is accessed.

This report has 0 to do with AWS.

[+] vishnugupta|4 years ago|reply
AWS and Amazon Retail are two different entities altogether. Even their infrastructure are at least logically siloed and my educated guess is even physically siloed in some places.

AWS is certified to comply with a bunch of cloud/data standards/regulations such as HIPPA, PCI DSS and so on. Even if a single evidence is found that AWS is breaching them the consequences will be severe.

Also for Amazon as a whole it makes very little business sense to lose a AWS customer paying hundreds of millions of dollars a year just to gain some marginal advantage in retail space. Note that Amazon retail already is operating at the limit when it comes to having accurate sales information about its competitors. It has crawlers to scrape online data and employs hundreds of analysts to build multiple models. And it’s been on this for close to three decades. So trawling AWS customer data is net negative for Amazon. It doesn’t take much for competitors to move away to Azure of GCP.

So it’s in AWS’s best interest to be absolutely fool proof about not going anywhere near customer data. Dealing with business data is a whole lot different ball game compared to collecting tracking customer data like Google does. Businesses will be unforgiving.

[+] nova22033|4 years ago|reply
chose to use MS Azure instead of AWS

The article says someone used data from Amazon(the online store), not AWS. You should absolutely use Azure(or GCP) if it makes more economic sense for you but migrating from AWS to Azure because of this may be an overreaction.

[+] marvinblum|4 years ago|reply
I had the same thought a while ago. I remember when Amazon mostly acted as a retailer, and not as a marketplace. Nowadays I don't see why I shouldn't buy on ebay or somewhere else, as the marketplace approach negates what I liked about it: everything from one company, a single parcel, easy refunds. If I receive each item from a different retailer anyways, I don't see why I should feed the beast.
[+] Gasparila|4 years ago|reply
Thought exercise because I legitimately struggle with this. Is this fundamentally different than Costco using sales data to choose which Kirkland products to launch/sell? If so, how? If not, then why do we not pursue Costco with the same gusto as Amazon? To me this behavior by Amazon seems worse, but I can't figure out why.
[+] nataz|4 years ago|reply
The most interesting part of the HN discussion is not about the definition of what Amazon is doing, but the occasional misunderstanding of how large brick and mortar retail businesses operate at scale (see: buying shelf space/payment dependant on sales/etc).

There are lots of folks on here that understand what Amazon is doing, less who understand retail businesses mechanisms.

I'm not sure what Amazon is doing is legal (def will vary widely between the eu and us markets), but it is another interesting example of how doing something at scale can be perceived as fundamentally different then when it's done in a smaller way (especially as it pertains to privacy).

[+] gok|4 years ago|reply
Lots of comments here of the format "every store does this."

No, no other store operates this way. Walmart and Costco do not have a little flea market of third party sellers inside their stores who run their own logistics. This would be more like Amazon being both an anchor tenant and owner of a mall, and requiring that every other store within the mall provide all their sales information, then rapidly evicting all the successful stores and replacing them with knock off stores that they also own.

[+] bsch|4 years ago|reply
I'm a third party seller and I just left Amazon. When you buy a book, for example, are you aware that 40% of the sale goes to Amazon? Many sellers sell cheap items at a steep loss just to keep their sale metrics up. A couple bad reviews, etc. and your business is kicked off with little explanation and cold or no way to appeal. Third party sellers are not treated well and I'm not surprised Amazon steals seller data metrics
[+] bogwog|4 years ago|reply
Isn't it sad that all our tech giants are guilty of anti-competitive behavior? You know, things that are supposedly illegal and should have been stopped by government regulators long ago?

It makes me wonder if these American businesses are really so different from the likes of Tencent, Huawei, etc and their ties to the Chinese government. Everyone knows those companies are only as big as they are because of government support. Can you really say that isn't the case with Google, Apple, Microsoft, Amazon, Facebook, etc?

[+] fnord77|4 years ago|reply
"we have a policy against this, but we violate it all the time"
[+] spaceribs|4 years ago|reply
Amazon should be nationalized.

All these 3rd party companies want is a "farmers market", a stall to sell their wares. Give them the municipal software infrastructure they need to do so and maintain it as a public good.

[+] LightG|4 years ago|reply
It's a catch-22 ... would Amazon be this innovative had it been nationalised?

At what point do you nationalise? Is there a next technology which will be stifled if it was nationalise?

Does nationalisation sttifle innovation?

I've been wrestling with these questions as I actually don't like Amazon for all the reasons that have been well publicised ... but their customer service is excellent.

Which sets me against a string of recent bad experiences with local suppliers, getting stung, and thinking ... well, if Amazon treat me better, why shouldn't I move away from local suppliers and stick with the monopoly? Which goes against a lot I believe in.

I guess the problem is it's putting a lot of trust in Amazon. Which is itself an argument for nationalisation. I don't know.

[+] amelius|4 years ago|reply
Stallman said it too:

https://stallman.org/amazon.html

> We should not allow a company to have a share over around 10% of any market. If in a certain field a single dominant company is beneficial for society, that means it is a natural monopoly, and should be served by a regulated utility.

[+] mk89|4 years ago|reply
I disagree. There are more and more services providing logistics, delivery, payments, etc. And they are quite reliable. Just 2 years ago I was entirely relying on Amazon as a good ecommerce. As of 2020/2021, to be honest, there is nearly no difference with some individual retailers (which don't use a 3rd party platform to sell their goods like Amazon or Ebay). Lots of websites have improved, logistics, delivery, customer service, payments, ..etc etc. They key, in my opinion, was the logistics + delivery. That's what Amazon was exceptionally good at. Now that the infrastructure is nearly the same for everyone, why would you share your profits with Amazon and risk to be out of the business in 1-2 years?
[+] ceejayoz|4 years ago|reply
An apt comparison - most of the farmers’ markets around here have been ruined by resellers, too.

No, those Driscoll strawberries in March didn’t come from upstate New York farms.

[+] batch12|4 years ago|reply
Why should the federal government steal Amazon? Surely, it is possible for the government to build another service. I will admit that this is a clever way to kill Amazon. I find the idea of a government running my compute infrastructure to be a terrifyingly bad idea and would seek out someone else.

Edit: Replaced AWS with Amazon

[+] niyikiza|4 years ago|reply
Whenever someone suggests that something be nationalized, I ask myself "Why not create a public version of it?". If the answer is "it cannot compete with the private ones", maybe that's why running it privately is necessary.
[+] Workaccount2|4 years ago|reply
Amazon doesn't need to be nationalized, it does need to be broken up though. The dividing lines in the organization are so clear you could practically tap it with a hammer and it will fall apart into nice individual pieces.
[+] n0us|4 years ago|reply
It would be really interesting to see the USPS in the USA open a market like this
[+] wolfretcrap|4 years ago|reply
Amazon is far from only being software atleast in India.

They've such a volume here in India that since Amazon has got here, traditional LTL logistics soared in price wayyy higher

Amazon has completely revolutionised logistics here in India, you'll have hard time sending a box from point A to point B cheaper than what Amazon offers.

We are at a point where Amazon sells things much cheaper shipped to your door than a shop near you. (If you don't live in a metro city highly likely, the price which Amazon offers, local shops simply can't beat them)

And in India something like 60-70% people live in small towns and villages, traditional family owned distribution networks are failing to compete with Amazon, yes the ones which power most of the shops in the town.

I maintain, the traditional family owned distribution networks were even more exploitative (screwing over both customers and their workers) in India atleast compared to what Amazon offers.

Amazon delivery agent here are guys from low economic class and often from villages nearby. I am glad my purchases are helping these people survive than the "several property owning shopkeeper near me" competing with me in the real estate market while simultaneously ripping me off on the price on various tools.

Few years ago I was working for such family owned distribution networks and I never seen such miseries in life, truckers were often not paid at time, often driving trucks which hardly get any service (dangerously), the axel could become rocket anytime while on road. Amazon has only brought best practises to us, they've regular vehicle maintenance schedule, drivers get paid on time. Amazon delivery agents are some of the happiest people I've met despite working so hard, they are always smiling while delivering stuff to me.

The distribution agents were regularly fired without payment (it's not completely organized sector so lots of labor operate in grey area, where if they don't get paid don't have any legal recourse and most likely no one will believe if they ever worked for the person they are claiming to have rendered their service to. I am glad, the nepotistic and exploitative power nexus of family owned distribution networks is dying.

Easy return was never available in India, and you risked getting "death stares" from the shopkeeper if you ever returned anything to him because of quality issues of the product.

Other than this, most of the times I had seen "young girls" walking into market and getting "40% discount" by some thristy shopkeeper and they wouldn't do same for a guy ever, atleast this form of descrimination is dying with Amazon.

And honestly speaking, if a lot of Amazon executives in Bangalore and Gurgaon are getting rich, it's well deserved for what they've done for the nation.

I forgot to mention, we've many Amazon competitors but primarily Flipkart - well, getting them to replace/return anything has been tough for me, maybe because I live in a small town, I don't say but I get all my packages in 2 days from Amazon (without prime), while Flipkart takes 5 days here minimum.

What would I like to see Amazon change?

1. Make it possible to sell low value items which cost less than 200 and aggregate it before it's shipped to customer and charge customer shipping on aggregate weight shipped for these small combines. Sometimes it's very difficult when you've to order small items and pay 150-200 shipping on each item. These can be "no return combine", I will not bother returning such low value item, so Amazon saves overhead and additional costs.

2. Please revolutionze hardware space for retail buyers, stuff like "steel sheets, MDF, nail, bolts, nuts" - we don't have any Homedepot or Lowe's, we really need it and my hope is only on Amazon. Other countries like US has Homedepot where u can get most of the hardware fittings while this space is seriously lagging in India, everyone uses different naming for a spare part, etc...we don't even have anything like "McMasterCarr".

[+] jpxw|4 years ago|reply
For one, large government software projects are almost always disastrous, even in developed countries.

Secondly, that isn’t what sellers want. Many sellers use Amazon to fulfill their orders. Amazon is far more than just a “market stall”.

[+] mellavora|4 years ago|reply
We have that in Luxembourg. Problem is finding the site. You have to know it is there.
[+] whalesalad|4 years ago|reply
Every time a business gets this successful someone will inevitably come out of the woodwork and say "the government now needs to own this, there is no other option" - wat?
[+] syshum|4 years ago|reply
Yea I am going to go ahead and say No to that....

Amazon has issues, but "nationalizing" it would not ease those issues in fact in most ways it would make them worse.

[+] swiley|4 years ago|reply
No. As it is I can still go to other sellers if I want to, if Amazon were nationalized then you might not have any other choice.
[+] aliyfarah|4 years ago|reply
Agreed 100%.

Should be merged with UPS.

I also believe NBA should be nationalised. All teams should be owned by cities and revenues used to fund schools etc

[+] jonnycomputer|4 years ago|reply
Or broken up. Its AWS and its online retail are each sufficiently large enough to be anti-competitive on their own.
[+] Black101|4 years ago|reply
should they also nationalize their cloud services?
[+] FridayoLeary|4 years ago|reply
>Give them the municipal software infrastructure they need to do so and maintain it as a public good.

oof. Amazons actual website is frankly horrible, but i shudder to think how terrible it would be if it was run by the government. I'm cringing at the thought. There would just be an endless stream of news about gross mismanagement, incompetence, wasting taxpayers money ad nuseaum. No. The only thing that could possibly be worse then Amazon in its current format would be if it were run as a government enterprise.

And to the whataboutism; "who says Amazon doesn't have those problems etc, it's different. I don't have to be bothered so much by the internal affairs of a private company. A government company otoh, it would just be all over the news.

[+] guerrilla|4 years ago|reply
I agree but there's one practical problem with this: other markets (e.g. the EU) need to nationalize or reproduce it too or else the US is getting significant geopolitical leverage.
[+] namdnay|4 years ago|reply
Like every supermarket chain in the world?
[+] sumedh|4 years ago|reply
Cant Costco, Walmart also do the same thing, why is Amazon being singled out here?
[+] cowpig|4 years ago|reply
Can we just rule that internet marketplaces cannot offer competing products on their own platforms?

The fundamental conflicts of interest will always persist otherwise.

This is going to sound radical but I think Google Search should be broken away from everything else and/or Google products should not be accessible via the search page (or allowed to buy ad space)

[+] neolog|4 years ago|reply
If you make something and sell it in a store, does that mean you're not allowed to sell other people's products in your store?
[+] salawat|4 years ago|reply
You can't square access to "aggregate sales data" of inventories that are not yours with having a policy not to use third-party sellers info for personal/internal sales gains. In this case Amazon went from being a decent host and service provider to a malicious, unfair competitor.

Either they divest themselves from being an active participant in their marketplace, or they put out their eyes and sequester Third-Party sales and transaction records into a bin to never get looked at except for reports to third-party sellers themselves. That's about the only way I can see for Amazon to ethically move forward.

[+] kishinmanglani|4 years ago|reply
Literally every retailer ever does this. From Macy’s to Target to Walmart to Shoprite
[+] libertine|4 years ago|reply
Doesn't make it right though.

Every brand must estimate their competitors market shares, sales volumes, media spend, and actively track promotional activity - while retailers have a massive slice of this information, namely Amazon. Not only that they control their own "shelves".

In my point of view they shouldn't be allowed to compete if they are using competitors data without their consent... and that's the catch, it's Amazon data as well, so the only solution is: either Amazon is a market place or a retailer.

[+] downrightmike|4 years ago|reply
They literally covered this in the book the everything store by Brad Stone. This is their game play. This is how they take over categories. Let over people to the sales and testing, then rip them off and undercut them.
[+] zizee|4 years ago|reply
Does this practice extend beyond retail? Do AWS product managers look at AWS usage data of their customers sass products to decide whether it's worth launching a competing service?
[+] gsibble|4 years ago|reply
Usually if the answer could be evil, with Amazon it is. I'm sure GCP does the same.

Gotta love how AWS/GCP terminate your https and can read all of your api traffic.......

[+] annoyingnoob|4 years ago|reply
Seems like all big retailers do this. I know that Home Depot's HDX brand copies products, and you are more likely to find HDX in stock than the products it competes with.
[+] m1117|4 years ago|reply
News love making their headlines in a way that people get angry.
[+] hdanirwin|4 years ago|reply
Why does this surprise anyone? What company would do anything different?

This is why I’ve never made selling on Amazon anything more than a side-hustle. You’re just a pawn, totally at someone else’s mercy, and if you are too successful you’re bound to be eaten by a bigger fish who knows how your sausage is made.

[+] darksaints|4 years ago|reply
Every single discussion around this revolves around the same facile comparison with retailers, and I'm fucking sick of it, so I'll lay it out in a top level comment one last time.

These are the following ways in which Amazon is not like a (WalMart, Costco, insert retailer of choice):

* Physical retailers do not have access to the same breadth and depth of data that Amazon does. For example, retailers have no reasonable nor accurate methods of determining which advertising methods bring in the most leads. They have no idea how many people look at the product without buying it. They have no idea who puts in their cart and then lets it sit there for days on end. They have no idea who puts an item into their wishlist. They have no idea which people look at it, then come back a week later and buy it. They have no idea how many competing items, let alone which ones, the buyer compared it with before buying. They can't calculate conversion rates, nor satisfaction rates. Maybe if they're lucky, they can track returns down to the purchaser (because they might require a receipt to return), but they likely don't know much about who you are or why you're returning it.

* Retailers can't notice you looked at a product without buying it, then follow you around to your bank, your barber, your job, your home, relentlessly trying to convince you to buy it.

* Retailers can't look at your general preferences across thousands of unrelated products, perform machine learning methods to determine your likelihood of conversion for different brands and products, and then rearrange their shelves specifically for you to optimize visibility of their products for maximum profitability.

* Perhaps most importantly, retailers always have an incentive to sell their inventory. They buy it, they invest labor into presenting it, they pay holding costs to keep it in stock, they relentlessly optimize within difficult physical constraints to provide visibility to its location on the shelves, and they advertise its existence to the public. Amazon has none of these costs or incentives. If they decide to tank the listing of a competing item, they bear no cost in doing so. They are being paid for every single cost incurred, and they're making money off your stuff in FBA even when it doesn't sell. Even pure consignment stores will regularly decline to consign products that they don't think they can sell or don't think they can make enough money on to cover their costs. Amazon has no such incentive.

Does Procter and Gamble hate the fact that Costco can position Kirkland Signature right next to their products? Of course they do...but they still sell their product. The same can't be said for many private sellers of niche products when Amazon launches an Amazon Basics competitor. Their listings get tanked, their recommendations disappear, their sales effectively drop to zero almost overnight, and if they made the bad decision to use FBA, they're stuck paying holding costs and eventually shipback or disposal costs in order to exit the market.

Amazon is uniquely positioned to take advantage of marketplace data in ways that retailers could never feasibly do, and they bear no costs (and may even augment their profits) when they put their merchants out of business. They absolutely need to have their marketplace either shut down or completely separated from their retail space by legally regulated means.