U.S. Senator Warren urges Amazon breakup, India retailers want probe after Reuters story
* U.S. Democrat, Republican blast Amazon after Reuters story
* Indian retailers urge New Delhi to investigate Amazon
* Reuters story showed Amazon copied products, rigged searches (Updates Thursday story with Amazon comment in paragraphs 10 to 13)
By Aditya Kalra and Steve Stecklow
NEW DELHI, Oct 15 (Reuters) - U.S. Senator Elizabeth Warren called for breaking up Amazon.com Inc AMZN.O 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 Link 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 that, at least in India, manipulating search results to favour Amazon’s 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.
The Reuters investigation drew bipartisan criticism of Amazon from U.S. lawmakers.
Linking to the story on Twitter Link and Facebook, 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.
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.
Ken Buck, a Republican on the House of Representatives antitrust subcommittee, also shared the story on social media, saying Link "These documents prove Amazon engages in anticompetitive practices such as rigging search results and self-preferencing their own products over competitors."
"More concerning, it contradicts what Jeff Bezos told Congress," the Colorado lawmaker said. "Amazon and Bezos must be held accountable."
Asked for comment on the reactions, Amazon issued a statement similar to one it provided for the Reuters investigation.
"These allegations are incorrect and unsubstantiated," it said. "We display search results based on relevance to the customers, irrespective of whether such products are private brands offered by sellers or not."
Amazon said it "strictly prohibits the use or sharing of non-public, seller-specific data with sellers, including with sellers of private brands," and investigates reports of its employees acting contrary to that policy.
The company did not comment on the criticisms by U.S. lawmakers or Indian retailers.
INDIA RETAILERS, START-UPS CONCERNED
In sworn testimony before the subcommittee last year, Amazon founder Bezos said the company prohibits its employees from using data on individual sellers to help its private-label business. 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.”
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 WMT.N Flipkart indulge in unfair business practices that hurt smaller firms, allegations the companies deny.
The Alliance of Digital India Foundation, a nonprofit 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 Link 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 Link
SPECIAL REPORT-Amazon copied products, rigged searchES to
promote its own brands Link
SPECIAL REPORT-Amazon documents reveal secret strategy to dodge
India's regulators Link
Reporting by Aditya Kalra in New Delhi and Steve Stecklow in
London; Editing by William Mallard
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.