Amazon, the e-commerce and now advertising juggernaut, has been found limiting competitors’ ability to buy ads, in revelations that add to growing pressure on the company over alleged anti-competitive behaviour.
The revelations, reported by the Wall Street Journal, are based on sources employed by Amazon, members of rival companies, and agency people who spoke to the newspaper.
In short, it finds that Amazon’s interests as a manufacturer of products have been rubbing up against its interests as a retailer, as rivals in the connected home and TV streaming sticks are limited in the ads they can buy.
It is company policy, according to some Amazon employees, that Amazon won’t let large competitors buy sponsored-product ads against searches for Amazon products such as its Fire TV stick, the voice-activated Echo series, or its smart doorbell, Ring.
While this seems fair enough, some employees of Roku, which produces a rival streaming stick that is available to order on Amazon, report being unable to buy ads against their own product listings.
It wouldn’t be the first time Amazon has played tough against competitors: it follows last year’s thaw in the Amazon/Google cold war, in which Amazon simply refused to sell Google’s rival Chromecast device or make YouTube available on Fire TV.
But neither is it the first time that the company has faced accusations that it is abusing its position, with revelations also from the Wall Street Journal earlier this year that some Amazon employees used data about independent sellers in order to develop rival products.
“We knew we shouldn’t,” said one former employee who accessed such information while describing a pattern of using it to launch and benefit Amazon products, in comments to the Journal. “But at the same time, we are making Amazon branded products, and we want them to sell.”
The fact that such a variety of questions about Amazon’s potential to affect the market from these different directions have arisen goes some way toward explaining the growing concern among lawmakers around the world that Amazon has grown too large.
Despite the seriousness of the allegation, an Amazon spokesperson wrote to the journal (in a tone that was perhaps not intended for publication) to mock rather than deny the allegations.
“News flash: retailers promote their own products and often don’t sell products of competitors,” they said, despite the fact that Amazon does sell these competitor products.
“Walmart refuses to sell [Amazon brands] Kindle, Fire TV, and Echo. Shocker. In the Journal’s next story they will uncover gambling in Las Vegas.”
Amazon’s situation becomes ever more important in light of this month’s Global Advertising Trends report, which finds that e-commerce is also causing a significant re-shaping of ad budgets. Brands are set to spend around $59 billion this year on e-commerce advertising.
As a result, Amazon, which lags behind both Google and Facebook in ad revenue is growing 4.5 times as quickly as Facebook and 63 times faster than Alphabet in H1 2020.
Sourced from the Wall Street Journal, The Verge, The New York Times; additional content by WARC staff