HomeeCommerce NewsFTC claims Amazon punished its own sellers to limit Walmart's reach

FTC claims Amazon punished its own sellers to limit Walmart’s reach

We know for a fact that Amazon and Walmart have a huge rivalry when it comes to the US market and we can say that the same can be seen in the Indian markets as well due to the fact that Walmart now owns a majority stake in India’s Flipkart which competes directly with Amazon India. Talking about the rivalry between these two commerce giants, you must have noticed that we didn’t use e-commerce because we still believe that Amazon is king in the e-commerce segment. However, it is undoubted that Walmart is supreme when it comes to offline sales due to its chain of stores all over the US. This is also the reason why Amazon wants to curb the reach of Walmart because they know Walmart can make it big as it has all the means to do so.

FTC claims that Amazon made $1 Billion by “using a secret algorithm called “Project Nessie” to push up the prices that U.S. households pay. Amazon may have also succeeded in curbing Walmart’s ambitions.” Federal Trade Commission also claims that the company “punished its own sellers to limit Walmart’s reach as Walmart got into e-commerce”. FTC adds that in 2014, “arrival of Jet.com triggered fear at Amazon that Jet.com would be able to offer shoppers lower prices online”. They add Jet.com’s arrival “kick-started Amazon’s strategy of removing sellers’ offers from the Buy Box if shoppers could find the same products at lower prices on Jet.com. The Buy Box is the button that allows shoppers to make a purchase directly from a seller.” Note that Jet.com was acquired by Walmart in 2016 and integrated into its own e-commerce business.

Some experts say that they would not be surprised if FTC’s claims turn out to be true. They add that “Given Amazon’s size and a scale, their quantitative analytical might, and particularly, against the background that they had not made a profit on (Amazon.com) for the first 20 years, it’s not surprising that they would resort to such tactics against competitors”. FTC also adds that Amazon’s fear was due to “Jet.com offering prices that were 10% to 15% lower than what Amazon advertised”.

Alf Alferez
Alf Alferez
Dedicated writer with a strong track record of developing customer loyalty and managing general office operations. Enjoy being a part of a company where my skills and creative ideas will benefit the overall productivity of the organization. I have a strong desire to work in helping make the world a better place. Please reach out to me on alf@ecommercenext.org

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