LDN - Business

U.S. Senator Warren urges Amazon breakup, India retailers want probe after Reuters story

[October 14, 2021] By Aditya Kalra

NEW DELHI (Reuters) - U.S. Senator Elizabeth Warren called for breaking up Amazon.com Inc and Indian retailers demanded a government probe of the company after a Reuters investigation showed the e-commerce giant had copied products and rigged search results in India.

The Reuters report https://t.co/PiVEqAgjY6, reviewing thousands of internal Amazon documents, found that the U.S. company ran a systematic campaign of creating knockoffs and manipulating search results to boost its own private brands in India, one of the company’s largest growth markets.

Wednesday's report showed for the first time that, at least in India, manipulating search results to favour Amazon’s own products, as well as copying other sellers’ goods, were part of a formal strategy at Amazon – and that at least two senior executives had reviewed it.

Linking to the story on Twitter https://twitter.com/SenWarren/status/
1448397325047566341, Warren, a long-time critic of Amazon, said "these documents show what we feared about Amazon’s monopoly power — that the company is willing and able to rig its platform to benefit its bottom line while stiffing small businesses and entrepreneurs."

"This is one of the many reasons we need to break it up," she said.

A group representing millions of India's brick-and-mortar retailers said on Thursday the country's government must launch an investigation into Amazon.

"Amazon is causing a great disadvantage to the small manufacturers. They are eating the cake that is not meant for them," Praveen Khandelwal of the Confederation of All India Traders told Reuters. The group says it represents 80 million retail stores in the country.

Indian retailers say foreign e-commerce businesses like Amazon and Walmart Inc's Flipkart indulge in unfair business practices that hurt smaller firms, allegations the companies deny.

Amazon did not respond to a request for comment on reactions to the report.

In response to questions for Wednesday's report, Amazon said, "We believe these claims are factually incorrect and unsubstantiated". The company did not elaborate. It added that Amazon displays "search results based on relevance to the customer’s search query, irrespective of whether such products have private brands offered by sellers or not."

Warren, a prominent Democrat, advocated the breakup of Amazon and other tech giants in 2019 when she was running for president. Since then, as a senator from Massachusetts, she has continued to apply pressure on companies like Amazon.

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Sen. Elizabeth Warren (D-MA) questions Treasury Secretary Janet Yellen and Federal Reserve Chairman Powell during a Senate Banking, Housing and Urban Affairs Committee hearing on the CARES Act, at the Hart Senate Office Building in Washington, DC, U.S., September 28, 2021. Kevin Dietsch/Pool via REUTERS//File Photo

In sworn testimony before Congress last year, Amazon founder Jeff Bezos said the company prohibits its employees from using data on individual sellers to help its private-label business. And, in 2019, another Amazon executive testified that the company does not use such data to create its own private-label products or alter its search results to favour them.

The Amazon documents reviewed by Reuters showed how the company's private-brands team in India secretly exploited internal data from its India unit to copy products sold by other companies, then offered them on its platform.

The company promoted sales of its private brands like AmazonBasics by rigging search results on its platform in India so that its products would appear, as one 2016 strategy report put it, “in the first 2 or three … search results.”

The Alliance of Digital India Foundation, a non-profit representing some of India’s biggest startups, said the practices detailed in the Reuters report were "highly deplorable", calling into question "the credibility of Amazon as a good faith operator in the Indian startup ecosystem".

In a blog post https://blog.adif.in/p/adif-amazon-reuters-ecommerce-fair-markets, the group urged the Indian government to take action against “Amazon’s predatory playbook of copying, rigging and killing Indian brands”.

A top official in the economic wing of the Rashtriya Swayamsevak Sangh, the ideological parent of Indian Prime Minister Narendra Modi’s ruling party, urged consumers to shun the company on Thursday.

"I call upon people of this country to #boycottAmazon,” Ashwani Mahajan, co-convenor of Swadeshi Jagran Manch, said on Twitter https://twitter.com/ashwani_mahajan/
status/
1448525157476175879?s=20.

(Reporting by Aditya Kalra in New Delhi; Editing by William Mallard)

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