Amazon denies a report that it altered its search algorithms to favor its own products (AMZN)
Category : entrepreneur
Amazon is disputing a report that it adjusted its retail search algorithms to favor its own products and listings that would make it the most money.
A bombshell Wall Street Journal report published Monday detailed a shift in Amazon’s algorithm that reportedly occurred late last year. For more than a decade, Amazon’s search listings primarily showed the best-selling and most relevant results. After the algorithm was reportedly changed, search results showed products that would be the most profitable for Amazon, such as the company’s private-label products or third-party listings that would make Amazon more money than its own products.
People who worked on the changes told Journal reporter Dana Mattioli that Amazon’s retail executives pushed for the changes, despite resistance from algorithm developers and the company’s own lawyers.
But on Monday, Amazon issued a strongly worded statement denying the Journal’s report.
“The Wall Street Journal has it wrong,” an Amazon spokesperson told Business Insider. “We explained at length that their ‘scoop’ from unnamed sources was not factually accurate, but they went ahead with the story anyway. The fact is that we have not changed the criteria we use to rank search results to include profitability. We feature the products customers will want, regardless of whether they are our own brands or products offered by our selling partners. As any store would do, we consider the profitability of the products we list and feature on the site, but it is just one metric and not in any way a key driver of what we show customers.”
Amazon now single-handedly controls 36.5% of US online retail sales. Its search bar is the No. 1 way for American shoppers to find products to purchase online, according to data analytics firm Jumpshot.
The retail giant currently faces an ongoing Federal Trade Commission investigation, which is probing whether Amazon uses its dominance to unfairly edge out competitors. Amazon’s own attorneys voiced concern that changes to its search algorithm could violate antitrust laws, according to the Journal.
Read more: A brewing FTC antitrust investigation into Amazon is looking more and more serious
Amazon CEO Jeff Bezos has attributed the company’s success to its ” customer obsession” principle, which touts its devotion to earning customers’ trust. Employees told the Journal they were worried that principle was being violated by the algorithm changes.
Amazon’s private-label business currently represents less than $2 billion, but is expected to grow to $31 billion in sales by 2022, according to investment firm Suntrust Robinson Humphrey.