In a rare public rebuke, Amazon responded to Sen. Elizabeth Warren, the presidential hopeful with Big Tech in her crosshairs.
For weeks, Warren has been promoting a plan to break up big tech companies like Amazon, claiming that they use their market dominance to hinder competition. Amazon typically doesn’t engage with public criticism, but the company has become increasingly sensitive to anti-trust comments in recent weeks. That was clear Tuesday when the Seattle tech giant tweeted a rebuttal to Warren’s claims.
The background: Warren’s campaign for president includes a bold proposal to unwind major tech acquisitions including Amazon’s purchase of Whole Foods and Zappos. She would also set new regulations that forbid tech companies from owning a marketplace and operating on it. In Amazon’s case, that would mean the company could operate its e-commerce marketplace but couldn’t sell private label products on it.
Driving the news: During a town hall this week, Warren accused Amazon of using the data it collects on sellers and buyers to identify new private label products to create. She said Amazon then promotes its private label product above competing third-party sellers. Warren claimed Amazon captures 49 percent of U.S. online retail sales while Walmart is responsible for 9 percent of retail sales in America.
Amazon’s response: Amazon clapped back in a tweet, saying “we don’t use individual sellers’ data to launch private label products” and contending that “Walmart is much larger; Amazon is less than 4% of U.S. retail.”
We don’t use individual sellers’ data to launch private label products (which account for only about 1% of sales). And sellers aren’t being “knocked out” – they’re seeing record sales every year. Also, Walmart is much larger; Amazon is less than 4% of U.S. retail. https://t.co/5wXTfaAHuN
— Amazon News (@amazonnews) April 23, 2019
Fact check: It isn’t clear whether Warren was comparing Amazon’s e-commerce sales with Walmart’s brick-and-mortar sales or whether she was talking about retail generally. What we do know is Amazon accounts for roughly 50 percent of all e-commerce sales in the U.S., according to the retail research firm eMarketer while Walmart captured 4 percent of U.S. e-commerce sales in 2018. Amazon was responsible for about 5 percent of all American retail sales, including brick-and-mortar, in 2018.
Day 2 at Amazon? Amazon CEO Jeff Bezos’ catchphrase, “It’s still Day 1,” refers to the company’s startup culture. But Amazon is no longer the heads-down, siloed company that rarely engaged with the public because it was “willing to be misunderstood for long periods of time.”
The company has been more defensive in the face of criticism from Warren and her peers lately. Amazon quietly removed some promotional spots for its private label products earlier this month amid the claims of anti-competitive behavior. Last year, Amazon raised its minimum wage for employees to $15 an hour amid intense pressure from Sen. Bernie Sanders. The company also pulled out of a planned 25,000-person office in New York after elected officials and activists took the company to task.
Update: Warren responded to Amazon’s rebuke with a thread of tweets citing research and news coverage that supports her claims:
Oh boy. Here are the facts:
First, there are multiple reports that Amazon is using the data it collects to copy successful goods sold by small businesses on the Amazon Marketplace and sell its own branded version. https://t.co/x6LklklPPQ https://t.co/owUdVGgI6F
— Elizabeth Warren (@ewarren) April 24, 2019
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