On Monday, the Chief Executive of Amazon.com Inc, two senators questioned Jeff Bezos.
It is about on how Amazon determined the “Amazon’s Choice” badge on certain products. Also, whether the mark deceives consumers into purchasing “products of inferior quality.”
Democratic Senators Bob Menendez and Richard Blumenthal sent a letter to Bezos indicating, “We are concerned the badge is assigned in an arbitrary manner, or worse, based on fraudulent product reviews.”
The “Amazon’s Choice” mark is a small badge that is next to certain items. It is similar to its “Best Seller” mark.
In 2015, Amazon charged to block companies that were writing fake reviews. They are also selling them to retailers on the site looking to lift their products’ sales.
The senators indicated the lack of information on how Amazon conclude which products receive the badge has led them to interrogation.
This is whether Amazon is using it to “promote its own products over competitors’ products, potentially disadvantaging smaller sellers on the platform.”
Senators Seek for Additional Explanation
Amazon did not provide comments immediately.
The senators needed a “detailed explanation of the process” that Amazon uses to determine which products get to become Amazon’s Choice and if the retailer uses an algorithm to do so.
They also required Amazon’s employees to personally review the products to “ensure they meet a certain quality threshold.”
Amazon received criticism for its power over third-party sellers on its site. Paid dvertising is the only way to compete versus first-party and private-label sales by Amazon’s own brands.
In July, the U.S. Department of Justice announced that it was inspecting whether big technology companies, including “some retail services online,” were a part of anti competitive practices.
Amazon.Com’s Possible Deal with Future Retail
Elsewhere, Amazon.com Inc. is also in talks to obtain as much as 10% of Future Retail Ltd.
It is after the US company moves to boost its brick-and-mortar presence in one of the world’s fastest-growing retail markets.
According to unidentified people, Future, India’s No. 2 retailer by turnover, is in search of a valuation of about 2,000 crore or equivalent to $281 million from Amazon for the stake.
The deal is with the Mumbai-based company. It activates its flagship “Big Bazaar” grocery store chain, will give Amazon more contact to the business.
It is after it bought Whole Foods Market Inc. for $13.7 billion in 2017. Also securing a foothold in the U.S. food retailing segment.
The proposed investment in Future Retail suggest some parallels, permitting Amazon to tap into India’s rising demand for household products and home-delivered fresh produce and vegetables.
Discussions are yet to conclude., the deal could still weaken or be delayed.
Representatives for parent company Future Group and Amazon in India indicated they won’t comment on market speculation.
The deal can help Amazon to edge over competitors Flipkart and the planned e-commerce venture of Reliance Retail.