Amazon routinely ranks its own products ahead of items from competitors, the Federal Trade Commission (FTC) said in an antitrust lawsuitâechoing the findings of a 2021 investigation by The Markup.
Amazonâs search results are biased in the companyâs favor, even when it knows competing products are of superior quality, the FTC added, helping the online retailer extract what the agency called âenormous monopoly rents from everyone within its reach.â
The FTCâs search allegations help form the basis for a broader lawsuit accusing Amazon of stifling competition by punishing sellers whose goods can be bought more cheaply elsewhere, and by requiring sellers to use Amazonâs fulfillment service in order to offer faster âPrimeâ shipping.
âAmazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,â FTC Chair Lina Khan said in a written statement.
The agency, along with 17 state attorneys general, filed the suit in a federal district court in Seattle. The complaint comes nearly two years after a Markup investigation found that products from Amazon-owned brands or exclusive to Amazon ranked ahead of other items in search results, including in cases where competitors had higher customer ratings and more reviews. The investigation found that knowing only whether a product was from an Amazon brand could predict if it got the top search rank 70 percent of the time, making that factor more important than a productâs star rating or review count.
When an Amazon brand took the top search spot, it was usually labeled as âfeatured from our brands,â and Amazon at the time told The Markup it considered such âfeaturedâ results to be âmerchandising placementsâ rather than search results or advertising. It also denied that it favored its own brands in the results.
Amazon did not answer questions on the FTCâs search ranking claims, instead pointing to a statement from Amazon Senior Vice President, Global Public Policy and General Counsel David Zapolsky, who wrote on Tuesday that the suit was âwrong on the facts and the law, and we look forward to making that case in court.â
âThe practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazonâs store,â he also wrote.
In its suit, the FTC said Amazon is âstacking the deckâ in search results against competitors by âburying organic content under recommendation widgets, such as the âexpert recommendation widget,â which display Amazonâs private label productsâ over others. Such recommendations used to exist entirely outside of search, the agency said, displaying on product detail pages or on pages that delivered personalized suggestions to customers, to replenish previously purchased products, for example.
It is possible the suit contains additional specific allegations about Amazonâs search rankings, since the rankingsâ section in the public version of the complaint contains several redacted paragraphs. FTC spokesperson Victoria Graham said portions of the complaint were redacted because they contain non-public information.
Robert Gomez, an Amazon seller who criticized the companyâs âunfair advantagesâ in The Markupâs 2021 investigation, said it has only grown harder on Amazon in the ensuing years to turn a profit on his Kaffe line of coffee products like grinders and brewers. Sponsored results increasingly dominate the top of search results, he said, making pricey ad buys crucial, and he said Amazon has locked him out of the all-important âbuy box,â through which it distributes sales from product detail pages, for a product of his that Walmart sells for $17.88âa lower price than he said he could afford to offer on Amazon due to additional costs he must pay there.
Gomez said that while heâs encouraged by the FTCâs suit, since it will bring further attention to what he considers Amazonâs uneven marketplace, he said âIâm not holding my breathâ for an outcome that helps sellers like him. Even if the agency can roll back the practices it considers unlawfully anticompetitive, it would leave untouched other practices Gomez said cut into the margins of independent sellers, like Amazon selling sponsored search results or selling certain brands directly, meaning those brands donât have to act as their own seller in the Amazon Marketplace and thus end up giving a smaller cut to Amazon.
âThese anticompetitive practices continue to happen,â Gomez said, âand now more than ever, we are being affected by them.â
Update, Sept. 28, 2023
This story has been updated to note that Amazon did not answer specific questions about FTCâs search ranking claims.
- Ryan Tate, Investigative Editor
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