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Despite internal opposition, Amazon has changed its search algorithms to prioritize ads that generate greater profits for the company, including its own private label products, according to a Wall Street Journal exclusive.
Citing sources from Amazon's A9 research team and company lawyers, the WSJ report says Amazon has changed the search algorithm by showing the most relevant products to the "featured" products. The change was not announced and was initially challenged by Amazon's internal lawyers, who said it could potentially cause problems with antitrust regulators. He was also unpopular with the A9 team because it was thought that profitability was above what was best for customers. While the tweak would not necessarily stimulate only Amazon products, this would probably give a boost to this technology giant's private label brands because they are designed to be more profitable for Amazon.
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According to the report, Amazon's retail team lobbied A9 engineers to focus on Amazon's private label products for years, arguing that they should receive treatment preferential in search results. Their logic was that grocery chains and pharmacies place their own products right next to the national brands in store. When they were worried about the direct addition of a measure of profitability, sales team leaders then looked for more over-the-top variables that could serve as "proxies" to generate profits in the market. # 39; algorithm.
The kind of correlation that Amazon employees would have attempted to establish between its own market and a traditional retailer does not take into account the fact that Amazon is estimated to control approximately 38% of the online retail market. In general, the company is still struggling with what should be considered acceptable when assessing the differences between IRL practices and digital business practices. But the case of Amazon is closer to the fact that a retailer has the ability to place his store in the real estate of choice in 38% of cities that it does for a simple choice of placement on the shelf.
For its part, Amazon challenges the report of the Wall Street Journal. In a statement sent to Gizmodo by email, a spokesman for the company wrote:
The Wall Street Journal is deceived. We explained in detail that their "scoop" from anonymous sources was not factually accurate, but they still continued the story. The fact is that we have not changed the criteria we use to rank search results to include profitability. We present the products that customers will want, whether it be our own brands or the products offered by our commercial partners. As any store would do, we consider the profitability of the products we list and present on the site, but this is only a measure and not a determinant of what we show our customers.
Amazon also told Gizmodo that private label products accounted for only 1% of its total sales and that this number was much higher for other private label retailers. Anyway, the news has caused a fall in Amazon shares this morning. According to Bloomberg, stocks fell 1.9% to $ 1,804 at 11:38.
The news comes at a time when regulators are increasingly controlling the antitrust giants of technology. Last Friday, home lawmakers asked Amazon executives – as well as representatives of Google, Apple and Facebook – to hand in their personal communications to find out if companies were anti-competitive. At the same time, Amazon is also facing an antitrust investigation in the EU regarding its treatment of third-party merchants, alleging that it "abuses its dual role as seller of its own products and market operator. "
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