Google's Version of Capitalism is Part of the Problem

What Prevents Super Platforms from Favoring Their own Products?

G-MAFIA companies likely do this all the time.

Listen, if I’m Google who owns Android, or Amazon that is well, Amazon, there’s no way I’m not going to abuse my dominant market position. In an era of Facebook, we all know what they can get away with.

Same thing if I’m Apple building a software services subscription empire. Super platforms are so dominant in an age of the bifurcation of the internet that even Facebook is merging its chat apps and messaging systems in order to better monetize them.

The EU fined Google about Android, but Amazon is on the fast track to perhaps getting fines as well.

Amazon Tweaks Its Search Algorithm To Elevate Its Own Products

Amazon has changed its algorithm to benefit its profitability, pushing its own products higher in its product search system, The Wall Street Journal reported on Sept. 16th.

Amazon changed the algorithm to favor products with higher profit margins instead of items that are bestsellers or the most relevant for consumers, people related to the project told the WSJ. In a world of tech monopolies, why does this not surprise us?

In an algorithmic world, “super platforms” win by bending and warping what algorithms do to be more profitable, not to equal or level playing fields.

Apparently, some divisions at Amazon had also pressured search engineers to favor its own “private-label” products, although it’s not clear from the report if the changes ended up boosting those products. The engineers might have a better idea what an ethical product actually looks like.

Amazon executives and the company’s search team, which is called A9, have been arguing about the change for over a year, sources told the paper. Amazon is usually good at PR, but this piece of investigative journalism is about shady practices. If you do something wrong internally, it will get out and about.

I believe the 2020s will be all about antitrust probes. We know Alphabet and other G-MAFIA companies are going to get roasted on data, privacy, antitrust and AI ethics.

Internal battles in Tech companies are nothing new. Amazon retail executives believed Amazon should showcase in-house brands, similar to how grocery stores promote their own brands, while employees who worked on the project argued that it wasn’t in Amazon customers’ best interests to surface its own products first.

Additionally, Amazon’s own lawyers pushed back against the change, saying it could attract further scrutiny from antitrust regulators. This is low-hanging fruit for the FTC and Congress, guys. You have to design products that are ethical and not like super platform monopolies.

The reality is we’re spending more time on Amazon’s front pages than on Google now and Amazon is attracting the ad dollars of brands since the eyeballs are there now.

However, and this is a big but, changes to Amazon’s search algorithm is a big deal for the site’s sellers, as the position of products on a page can greatly affect sales. Most people make buying decisions based on first page search results, according to analytics firm Jumpshot.

If you create an unfair playing field, trust in your “super platform” and Amazon Prime subscription could be impacted.

Amazon Algo Cat is Out of the Monopoly Bag

The matter comes at a time when the online giant is being probed by the U.S. and the European Union over its roles as both a marketplace and a seller of its own brands. The new algorithm could unfairly drive customers to items that give Amazon more profits than its competitors on the site.

To be fair, Amazon’s platform isn’t the super platform of the scale of Android or Google, after all. Amazon’s online sales represent less than 1% of global and 4% of U.S. retail sales. And its private label sales represent only 1% of the total products sold on its site. For all the hype of Amazon’s supposed disruptive nature, Amazon is not likely a big offender in antitrust.

“This was definitely not a popular project,” said one source. “The search engine should look for relevant items, not for more profitable items.” Amazon needs to decide if it’s serious about its supposed emphasis on being “customer-centric.”

It’s easy to become like Google and do as they do, but you can also do things differently with Prime’s massive opportunity to scale a value ecosystem for consumers.

Amazon needs to backtrack in a hurry. It won’t want to become another Facebook or Google where the media uncovers stories on a regular basis of the various shady things they do.

Regulatory probes prompted Amazon as recently as April to remove prominent ads for some of its private label products. The removal of the ads coincided with politicians becoming more vocal about regulation for large tech companies and about the fact that Amazon is promoting its own products.

Technology products need to be ethical and consumers should not be deceived just become some executives within are greedy and want their special bonuses.

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