Third-party sellers flag Amazon's data policy, say company pushing in-house brands

The development comes at a time when small sellers are becoming increasingly dependent on online channels for sales in light of the economic disruption due to the Covid-19 outbreak. Amazon founder Jeff Bezos said that he could not guarantee it was...

AFP
Sellers said their issues revolve around differential platform fees, and the use of sales data to make Amazon’s private labels and partner brands stronger, which have also been highlighted by local seller bodies in the past.
BENGALURU: Third-party sellers have demanded transparency from ecommerce company Amazon on its data practices as well as alleged preferential treatment for in-house brands.

Five small sellers — across categories like fashion, toys, packaged foods and general merchandise — have highlighted these concerns to Amazon India, they told ET, without getting a clear-cut response or legal assurance. The All India Online Vendors Association (AIOVA) has also raised similar concerns with the Competition Commission of India.

The development comes at a time when small sellers are becoming increasingly dependent on online channels for sales in light of the economic disruption due to the Covid-19 outbreak. It also comes in the backdrop of Amazon founder Jeff Bezos’s admission to the US Congress on Wednesday that he could not guarantee it was not accessing third-party seller data to develop its own competing products.


The ecommerce behemoth has in the past denied such allegations. Amazon has more than 500,000 third-party Indian sellers.

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At the same time, the online retailer operates at least eight private label brands, including home cleaning products range under Presto!, fashion brands — Symbol, Myx, House & Shields and Arthur Harvey; as well as small furniture and appliances under Solimo, grocery label Vedaka, and AmazonBasics brand for small electronics items.

Sellers said their issues revolve around differential platform fees, and the use of sales data to make Amazon’s private labels and partner brands stronger, which have also been highlighted by local seller bodies in the past. “These practices have been a concern for a larger set of merchants, as there are no clear checks and balances,” said a small merchant who sells toys on Amazon, with average sales of less than Rs 3 crore.
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Amazon did not reply to ET's email seeking comment till press time.

“Using competitors’ data to design private labels and selling it at massive discounts and discounted platform fee to preferred sellers are the issues flagged in India,” said Chanakya Basa, managing partner at Knock Legal, a firm that has represented the AIOVA in a few cases against ecommerce platforms.

“The only way to survive is that either your brand is so powerful that the platform cannot replace you or they will copy your product and keep you. The real issue is when a third-party brand is not powerful, that's when they will copy and replace,” an Amazon employee said.
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