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Amazon Warns Sellers About Anti-Trust

Some larger Amazon sellers received an email today about the risks of antitrust reforms. It appears that Amazon is trying to drum up support to defeat the pending legislation.

The email states:

“It is early in the process and the bills are subject to change, but we are concerned that they could potentially have significant negative effects on small and medium-sized businesses like yours that sell in our store.”

The problem most likely stems from the fact that Amazon operates a marketplace and also competes as a seller in some products. In 2020, Amazon came under fire for accumulating data on private sellers and then turning around and competing with them. Amazon denied using seller account data. However, former employees contradicted this claim.

Yet interviews with more than 20 former employees of Amazon’s private-label business and documents reviewed by The Wall Street Journal reveal that employees did just that. Such information can help Amazon decide how to price an item, which features to copy or whether to enter a product segment based on its earning potential, according to people familiar with the practice, including a current employee and some former employees who participated in it.

One of the key changes that might come from anti-trust reform is the placement of your products in Amazon’s search engine. It is widely known that participating in the FBA program improves your search results. This is considered a reward or benefit for spending a lot of money on warehousing and other FBA fees. However, the legislation from Congress could rein in this business practice among others. Since Amazon is mobilizing it’s army of third party sellers it appears that they are taking this threat seriously.

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