Amazon has begun shrinking the number of items it sells under its brands as regulatory pressure grows against the company.
Amazon's private-label business efforts account for a notable share of the company's sales. These private-label products have also been a point of focus among antitrust regulators after it was revealed the company was using internal data on sales on its platform to develop and boost the sales of its own products. However, the company appears to be taking steps to move away from that source of profit and perhaps even leaving the market altogether.
Amazon leadership told the company's private-label team to decrease its list of items by half over the last six months, according to the Wall Street Journal. The decision was allegedly based on disappointing sales for most of the items.This move was initiated by Dave Clark, the head of Amazon's Worldwide Consumer division, before he left the company in June. Clark ordered the staff to focus on the highest-selling commodity goods rather than offering a wide spread of products.
A Wall Street Journal investigation in 2020 revealed how Amazon's employees were using internal data from its platform to promote its products, angering many sellers along the way. This led to several government investigations, including lawmakers sending a letter to the Justice Department in March alleging that Amazon had hindered its competitors and preferred its own products.
Congress has also moved to pass legislation that would restrict platforms such as Amazon in selling their own products. The most prominent legislation is the American Innovation and Choice Online Act. This bill passed the Senate Judiciary Committee earlier this year and would prevent the Big Tech company from favoring its products or creating cheaper copycat products based on internal data.
The Federal Trade Commission, alongside regulators from the United Kingdom and Germany, has placed Amazon under scrutiny for its handling of third parties, leading to concerns about competition.This scrutiny has reportedly led some executives at the sales platform to consider withdrawing from the private-label market altogether. However, Amazon denies such notions.
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