Amazon CEO Jeff Bezos on October 02, 2019.
Elif Ozturk | Anadolu Agency | Getty Images
An investigation by the Amazon Street Journal found that Amazon restricts some of its larger device competitors from buying ads tied to search results for its own products, giving its devices a greater advantage over competitors, the Wall Street Journal investigation found.
The company will not allow some device manufacturers to purchase sponsored ads linked to products made by Amazon, including voice-activated echo shows, ring doorbells and fire TVs, allowing them to buy ads linked to other competitors’ products on the site, the journal said.
Sponsored products on Amazon are keyword-targeted ads that allow advertisers to promote certain items. In order to obtain a sponsored label, advertisers bid on certain terms, and ads with higher bids are more likely to be displayed.
Amazon said in a statement that it disputed the journal’s findings but acknowledged that some keywords related to Amazon devices may have limited advertising scope. The company said such restrictions are an example of what retailers decide to promote or feature on their website, which is standard practice. Amazon added that it is possible that companies bid for ads and may not win bids.
“News Flash: Retailers promote their own products and often don’t sell competitors’ products,” Amazon spokesman Jack Evans said in a statement. “Walmart refuses to sell Kindle, Fire TV and Echo. Shocker. In the next story in the journal they will gamble in Las Vegas.”
Investigations have revealed that Roku, who competes with Amazon’s Fire TV, has not been able to buy ads linked to both Amazon’s devices and its own products for many years. The Roku search results on Amazon’s website featured ads promoting Roku’s competitors, Roku products offered by resellers, and ads for Amazon’s Fire TV near the top of search results, the journal said.
Roku declined to comment.
Other competing device manufacturers have experienced similar issues with buying sponsored ads in search results for Amazon’s products, including Facebook, which makes voice-enabled smart displays to compete with Amazon, and Aerolo Technologies, which makes smart security products that Gives a bump.
The actions could attract the attention of regulators who are already testing Amazon’s business practices.
The journal found that members of Amazon’s device team flagged the products of major competitors, known as “Tier 1 competitors,” to prevent them from buying ads on Amazon’s own products. Additionally, when Amazon’s device team launches a new product, employees are asked which keywords should be suppressed in the ad and the rules are asked to discuss these matters on the “Privileged and Confidential” label to prevent related emails from being accessed. Said.
Amazon’s CNBC “Employees are instructed to mark emails as a privilege only when seeking legal advice,” he said.
Amazon Europe and the U.S. Faces ongoing investigations in, where the House Judiciary Subcommittee on Antitrust has examined how Amazon uses data from third-party vendors to create private-label products. Amazon’s competitors have previously accused the company of using predatory pricing methods to suppress competitors.
Read the full story in the Wall Street Journal.
– This article is contributed by Megan Graham of CNBC.
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