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  HOME | Business & Economy (Click here for more)

Amazon Ready to Invest Billions in Policing Products on Its Site

LAGUNA BEACH, Calif. – Amazon.com Inc. might need to spend billions of dollars in the future to prevent the sale of counterfeit goods, expired food or dangerous products on its platforms to preserve the customer trust that is critical to the company’s future, Amazon consumer chief Jeff Wilke said on Tuesday.

The e-commerce giant has been buffeted by a wave of reports in recent months about its sale of unsafe or expired goods, including an article in The Wall Street Journal detailing the availability of more than 4,000 items that had been declared unsafe by federal agencies.

Speaking at the WSJ Tech Live conference, Wilke said Amazon’s business depends on customers trusting the company.

The company recognizes it could lose its status as a trusted brand if the perception builds that it isn’t policing the products it sells, he said.

That is why last year it spent $400 million on technology and a staff of 5,000 people tasked with tracking counterfeit and unsafe items.

“We have to be vigilant and willing to spend hundreds of millions and eventually billions of dollars to protect our customers,” said Wilke, Amazon’s chief executive of world-wide consumer.

He said the company is lobbying for stiffer federal penalties for counterfeiters.

In addition to customer concerns, Amazon faces pressure from antitrust regulators concerned about the company’s dual role as a seller of products and marketplace operator.

The European Union, which announced an investigation of the company this summer, is probing whether Amazon is gaining a competitive advantage through the data it gathers from every transaction on its platform.

In the US, the Federal Trade Commission is probing possible monopoly practices by Amazon.

Wilke said he has made an effort, as antitrust scrutiny builds, to be more public and provide Amazon’s perspective to customers and regulators.

He said that the company uses the data it collects to improve a customer’s shopping experience by recommending products to buy – not to inform the private-label products that Amazon offers.

Earlier Tuesday, Makan Delrahim, head of the justice department’s growing antitrust division, said all options are on the table in its review of the tech giants. He said they could be broken up as a consequence of antitrust probes.

The department is examining competitive practices at companies such as Amazon, Alphabet Inc.’s Google, Facebook Inc. and Apple Inc.

Though Delrahim didn’t discuss specific companies, he said the big question he and others are focused on is asking: “Are companies abusing the market power that they have gained?”

Amazon continues to rake in huge profits from e-commerce sales and its cloud-computing businesses. The company, which reports third-quarter earnings Thursday, has become a political target as it morphed from an online reseller of books into a seller of groceries, entertainment and advertising.

Wilke reiterated Amazon’s stance that it has a fraction of the retail market, about 4% of the grocery market, for example, and a small shoe and apparel business.

“These businesses and categories we’re in that department stores and superstores have been in for a long time are really big and we have so much more to do,” he said.

 

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