As tech giants face growing scrutiny over their market power, Amazon has quietly removed some of the most aggressive promotional spots for so-called private label products on its website.
Private label products are created by Amazon or partners and are sold only on Amazon's website under an exclusive brand name. They benefit Amazon in many ways: They expand the selection of products on the site, offer better profit margins than selling third-party products, make supply-chain management easier and can help Amazon persuade big brands to cut prices to remain competitive on its site.
Amazon has been ramping up the number of private label brands during the last three years, stoking fear and concern among some sellers and brands that sell competing products on the marketplace.
Amazon's promotions for these products, which started showing up at least a year ago, were exclusively reserved for Amazon's own private label products and appeared in highly visible areas of the site, like the top of search results or next to the "buy box" of a competitor's product page. Other companies spend billions buying Amazon ads that link to their product listings on the site, vaulting Amazon into the number three spot among U.S. digital advertising providers, behind Google and Facebook, according to eMarketer.
However, in recent weeks, Amazon has significantly scaled down or relocated on-site promotions for its private label products, according to multiple Amazon sellers and consultants.
The change follows increased regulatory scrutiny of tech giants, highlighted by Sen. Elizabeth Warren's call for breaking up big tech companies like Amazon and Google last month. Amazon's practice of exclusively promoting its own private label products on the most prominent parts of its site has drawn the ire of many sellers and brands for being unfair and abusive.
"If I were Amazon, I would be worried about being viewed as giving unfair advantage to my private label products, given the amount of power they hold in general — and how unpopular the amount of power is quickly becoming," said Andrea Leigh, vice president of Ideoclick, an agency that helps sellers and brands sell on Amazon.