Amazon reportedly uses this trick to boost its own products up in Amazon’s search results
In this week’s episode of “Capitalism Gone Wild,” a report in the Wall Street Journal says that Amazon tweaked its secret listing algorithm to favor items that would bring a higher profit margin, including possibly its own products. Shocker, mega-conglomerate does mega-conglomerate things.
According to the WSJ’s sources, the change was contested by the company’s legal team, as they worried about giving ammo to antitrust regulators.
Amazon tweaked its suggestion algorithm to surface items with higher profit potential, apparently
According to the report, Amazon’s search team has been pressured by the sales team for years to favor Amazon’s own private-label products. The logic behind this? That grocery chains and drugstores put their own products right next to national brands on the store shelves. Why should Amazon’s virtual shelves be any different?
The retail team wanted to add a profitability index to the algorithm, and did an end-run around any blocks with using other variables that could add up to profitability. Lovely.
- The algorithm was changed from showing the most relevant products to “featured” ones
- Both the legal team and the A9 search team apparently pushed back, with the search team worrying that it wasn’t in the customer’s best interests
- Amazon’s private-label brands are specifically designed to give more profit margin to the company
With Amazon having around 38-percent of the total online retail market in the US, the comparisons to grocery or drugstore chains is a weak one. It’s also likely to fall on deaf ears with antitrust regulators both in the U.S. and in Europe, who are looking at all of the so-called “Big Tech” companies for anti-competitive behavior.
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