Months of rampant speculation have resulted in confirmation that Amazon boosted its own private-label products to the top of the marketplace’s search results while obscuring competitors into oblivion.
A Wall Street Journal report Monday points to the existence of a highly controversial algorithm that gives items that are more profitable to the company prominent placement in search rankings. According to insiders at Amazon who worked on the project (all of whom declined to be named), these products show up before the best-selling and most relevant results in searches.
The tweak, which was implemented last year, has far-reaching implications for the more than 600 million products available across the site. Most Amazon sales stem from the first page of search results, according to marketing analytics firm Jumpshot, which shared its findings with the Journal.
Amazon holds immense power when it comes to search. The e-commerce giant is the No. 1 search engine for products, even beating out Google.
Coupled with this week’s revelations, the findings deepens the company’s recent antitrust woes. Amazon, Facebook, Apple and Google were the subject of hearings called by Washington lawmakers in July, which focused on the tech firms’ largely unregulated dealings and business practices.
As the pioneers of not just the internet age but the era of online commerce, companies like Amazon have enjoyed minimal federal oversight. Amazon has long painted itself as a marketplace platform, not a purveyor of products. But with the addition of its own private-label lines in myriad categories, the company is now in direct competition with thousands of third-party sellers, changing its role in the very ecosystem it created.
The Amazon Search Team, known as A9, reportedly opposed the algorithmic shift, as did the company’s lawyers, who vetoed the initial proposal to factor profitability into the algorithm.
At the insistence of executives running the company’s retail businesses in Seattle, though, the plan moved forward.
According to the Journal’s report, Amazon currently sells 10,000 private-label products on its site. In 2018, those products made up only 1 percent of sales—about $2 billion. But investment firm SunTrust Robinson Humphrey told the Journal that those sales will spike to $31 billion by 2022.
When asked to confirm the algorithm’s implementation, though, Amazon spokeswoman Angie Newman denied a shift in the way that the company handles search. “We have not changed the criteria we use to rank search results to include profitability,” she told the Journal in an emailed statement.