The news: Amazon heavily favors its own products and sponsored items in search results, regardless of whether competing products have higher ratings or review counts, according to a report published last week from The Markup .
- Per the report, Amazon-owned or sponsored products made up only 6% of all products in the sample, but knowing whether a product was Amazon-owned or sponsored could predict if it would show up in the top search result seven times out of 10.
- Of 3,492 search results for popular product queries collected in the sample, The Markup found 60% were highlighted as “sponsored” products with the remaining 40% being split equally between Amazon-owned brands and third-party competitors.
The details: The report alleges that, in addition to prioritizing its own products, Amazon often hides whether a product is sponsored in search results.
- Amazon’s products often appeared above those from competitors, even if they had higher review scores and counts, often thought to be a determiner of a product’s visibility.
- In one example, The Markup found an Amazon-owned cereal with four stars and over 1,000 ratings appeared in search results over a competitor with five stars and over 14,000 ratings.
- Users are often none the wiser: A survey conducted in partnership with YouGov found only 17% of Amazon users think the platform prioritizes its own products over competitors in search results.
What is and isn’t an Amazon brand is unclear: The Markup found over 150 brands that are owned and registered by Amazon with the US Patent and Trademark Office but are not marked as such in Amazon’s search results.
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Amazon Basics is perhaps the best-known Amazon brand, but brands like Aqua Plus, Mama Bear, Elemara, and others are harder to spot because Amazon doesn’t label them as such in search results.
- According to the report, 87% of the top listings which were Amazon-owned or exclusive contained invisible “sponsored” tags in their source code but not visible in the search results, suggesting many of the top results are ads.
What it means for Amazon: Critics and competitors have long suspected Amazon took part in such practices, but the company has denied it before Congress as recently as 2019.
- Regulators are currently considering legislation that would ban the practices described in The Markup’s report.
- Two former antitrust officials—a former assistant attorney general with the Department of Justice’s Antitrust Division and the former advertising practices associate director at the FTC—said the actions alleged by The Markup should bring on an investigation and could be in violation of antitrust regulation, including the US Sherman Antitrust Act.
Why it matters: Regulators are turning a more watchful eye to Big Tech, and Amazon’s market share only continues to grow, especially during the ecommerce shift brought on by the pandemic.
- The company will have to add transparency to its search results to ease scrutiny, or it may find itself having to rewrite its practices due to new regulation.