U.S. Senator Warren urges Amazon breakup, India retailers want probe after Reuters story By Reuters
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© Reuters. FILE PHOTO: Senator Elizabeth Warren (D–MA) asks Janet Yellen, Treasury Secretary, and Powell, Chairman of the Federal Reserve, questions during a hearing by the Senate Banking, Housing and Urban Affairs Committee on the CARES Act, held at Hart Senate Office Building, Washington.2/3
By Aditya Kalra
NEW DELHI (Reuters) – U.S. After Reuters revealed that Amazon.com Inc. (NASDAQ:) had copied Indian products, Senator Elizabeth Warren demanded the government investigate the company.
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 (NYSE:) 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.”
She said, “This one of many reasons we must break it up.”
On Thursday, a group representing India’s brick-and mortar stores said that Amazon must be investigated by the Indian government.
Small manufacturers are being put at great disadvantage by Amazon. The Confederation of All India Traders’ Praveen Khandelwal told Reuters that they are eating too much of what isn’t theirs. It represents the 80 million retail shops in India, according to the Confederation of All India Traders.
Indian retail outlets claim that foreign ecommerce companies like Amazon or Walmart engage in unjust business practices, which can harm smaller businesses. This is a charge the companies refute.
Amazon didn’t respond to my request to comment on the reactions to this report.
Amazon replied to questions regarding Wednesday’s news report saying that “we believe these claims [are factually incorrect] and unsubstantiated”. Amazon did not provide further details. 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 is a prominent Democrat and advocated breaking up Amazon and other tech giants when she was running to be president. She has been a senator representing Massachusetts since then and continues to press for companies such as Amazon.
Amazon founder Jeff Bezos stated that it prohibits employees from using information on sellers for its private label business. Another Amazon executive also testified in 2019 that it does not alter search results or create private-label product lines.
Reuters examined Amazon documents to see how its private-brands group in India secretly used data from the India unit to duplicate products and then offer them for sale 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.
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