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Home Business & Finance Amazon Marketplace has an antitrust problem

Amazon Marketplace has an antitrust problem

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Massive tech companies may have been the focus of this week’s antitrust hearing, but one of the most arresting speeches came from a much smaller outfit.


All of Amazon’s worst moments at this week’s hearing somehow circled back to Marketplace, Amazon’s platform for letting third-party sellers list goods on Amazon.

McBath’s bookseller was the most sympathetic voice, but there were also concerns of less scrupulous Marketplace sellers smuggling counterfeit products onto Amazon’s store.

The hearing also resurrected long-standing accusations that Amazon uses hints from Marketplace to copy successful products and launch competitors.

) None of the problems are new, but this is the first time they’ve seemed like a real threat to the company, as antitrust crusaders look for cracks in Amazon’s imposing architecture.

If the new focus on Marketplace is surprising to users, it’s because the platform is so easy to miss.

For years, roughly half of Amazon’s sales have come from third-party sellers (according to analyst estimates), but the company works hard to make the difference difficult to spot.

If you’re just browsing products, it can be hard to tell where Amazon inventory ends and third-party sellers begin.

the direct sales platform can be turned against Marketplace sellers In January, Congress’ antitrust team got a stark illustration of how powerful Marketplace can be in Amazon’s direct-sales business.

Barnett told lawmakers that Amazon threatened to source competing products from third-party sellers if PopSockets left the platform, essentially using the specter of Marketplace to scare partners into submission.

At the same time, the direct sales platform can be turned against Marketplace sellers.

Because Amazon handles fulfillment services for Marketplace sellers, the company knows how much they’re selling, how much stock they have, and whether their product is striking a chord with consumers.

For years, sellers have worried that Amazon is spotting hot products on Marketplace and launching competitors, even as the company insists it won’t look at seller-specific data.

“Amazon enjoys receiving business from its rivals, even as it competes with them” It’s roughly the same complaint that PopSockets is leveling: Amazon has become both necessary infrastructure for product sellers and a potential competitor.

Activists have struggled to apply that logic to Amazon’s web services architecture or private label products (supermarkets have store brands all the time) — but the case against Marketplace is much clearer.

It’s unusual for a store of Amazon’s size to host a third-party marketplace, and as the bookseller and PopSocket stories indicate, there are real conflicts of interest that come along with it.

It’s hard to imagine Apple without the App Store, or how Google products survive without an ad network to fund them — but imagining Amazon without Marketplace is easy.

In any antitrust action, it’s hard to say how much of a company’s success is rightfully won and how much comes from unfair monopoly advantages.

Could the company steer its private label business without snooping on Marketplace sellers?.