The official outcome is revealed: Amazon suppresses Walmart's e-commerce!

Some time ago, the media broke the news that Amazon used the secret algorithm of " Project Nessie " to push up online shopping prices for American consumers and earned $1 billion through this method.

Recently, Reuters broke the news that the U.S. Federal Trade Commission ( FTC) accused Amazon of suppressing and stifling the development of Walmart's e-commerce business by threatening third-party sellers on the platform.

In 2016, Walmart acquired an e-commerce platform, Jet.com. Unlike Amazon, which emphasizes delivery speed, this platform is more inclined to provide consumers with low-priced goods. According to the US Federal Trade Commission, since it does not charge sellers commissions, Jet.com's product prices may be 10% to 15% lower than the prices of goods in Amazon's advertisements. Amazon realizes that these cost savings for sellers will be reflected in the prices of goods given to buyers.

In order to suppress Jet.com and to maintain its position among consumers , Amazon has taken a measure that once it finds that the seller's quotation on this platform is lower than that on its own platform, Amazon will delete the product quotation of these third-party sellers from its Buy Box.

As sellers, we all know that the Buy Box is the golden shopping cart that every merchant wants to grab, and the severity of this "threat" can be imagined. According to an Amazon seller, due to Amazon's pressure measures, sellers can only adopt the strategy of "ensuring that the price of their products on Walmart will never be lower than Amazon" to ensure their normal operation on Amazon.

According to industry insiders, it is not surprising that they adopt such a strategy against competitors given Amazon's size, scale and their quantitative analysis capabilities, especially since they (Amazon) were not profitable in the first 20 years.

The FTC also mentioned that Amazon deployed anti-competitive algorithms prohibited by the FTC for Jet.com's most popular products , which forced Jet.com to modify its strategy to match the lowest prices elsewhere.

In response to the above allegations, Amazon spokesman Tim Doyle said that the FTC's description of the pricing tool was "serious misrepresentation" and that the company had stopped using the tool several years ago. It is worth mentioning that Jet.com was shut down by Walmart in May 2020.

Amazon

Walmart

Antitrust