E-commerce giants defend data strategies

Retailers are facing the heat with U.S. lawmakers as the government tries to conduct a broad inquiry on the practice of keeping, using and distributing consumer data.

According to Bloomberg, Seattle-based Amazon says much of the data it keeps regarding third-party merchants who use its online marketplace is public and that analyzing aggregated sales data to bolster its private-label strategy is a common practice within the retail industry. Amazon said that while it uses aggregate data from merchants, it prohibits the use of individual vendor data in its private-label strategy.

“Customers’ shopping behavior in our store is just one of many inputs to Amazon’s private-label strategy,” David Zapolsky, Amazon’s general counsel, wrote in the letter dated July 26 to U.S. Representative David Cicilline, head of the House antitrust subcommittee. “We also use other factors employed across the retail industry, such as fashion and shopping trends highlighted in the press and on social media, suggestions from our manufacturers for new or complementary product lines, and gaps in our product assortment relative to our competitors.”

In its response to U.S. lawmakers, Google also tried to refute charges that the company favors its own products in search results and on YouTube. In recent years, Google has filled its search with more direct answers and Google-run services, such as flight bookings, rather than links to outside websites. That trend has prompted several complaints from small companies that depend on Google traffic.

To read the Bloomberg article, click here.