[Crew Review] Amazon under fire for ‘deceptive’ ads in search results

Accountability

Amazon is under fire—again. This time, for seemingly misleading consumers by not indicating clearly which of its search results are paid advertisements, in potential violation of FTC guidelines.

Is this another out-of-bounds play by the ecommerce giant?

Read the full story here.

New Feature: A+ Brand Stories

In a Tuesday announcement, Amazon is launching a new feature under A+ Content called Brand Story. The feature itself seems to have been online for months, but Amazon only recently detailed what it's for.

According to the announcement, this new feature will let you highlight elements of your Brand story separately from your product features using engaging visual content. It will let you use a single version of brand-focused content that can be found in a dedicated slot called “From the brand” and publish that to all ASINs under your brand alongside the product-level information that you would normally showcase on the A+ Content section.

Steve Chou’s Latest CNBC Feature

Our good friend Steve Chou of My Wife Quit Her Job was recently featured in CNBC’s Millenial Money series, which details how people around the world make and spend their money.

Source: mywifequitherjob.com

The feature article details how Steve and his wife, Jen, left their 9-5 jobs and ventured into ecommerce. Jen started selling custom-designed linens, while Steve documented her business journey in his blog, which we’ve come to consider one of the go-to authorities for ecommerce content like guide books, courses, and podcast episodes.

Speaking of podcasts, Steve is one of our favorite guests in the EcomCrew Podcast. Check out Episode 418 where Mike, Dave, and Steve discuss current market trends and the future of Amazon as a platform for ecommerce sellers.

Tornado Tears Through Amazon Warehouse

An Amazon-owned facility in Edwardsville, Illinois was hit by a massive tornado Friday night, leaving six warehouse employees dead, one injured, while forty-five were rescued. This once again brings Amazon’s commitment to workplace safety (or lack thereof) under the limelight.

The biggest concern is over Amazon’s long standing policy of hiring contract workers—only 7 out of the 190 employees at the Edwardsville delivery center were full-time Amazon employees, according to local officials.

Source: The New York Times

While ramping up its workforce to meet the pressing holiday demand is nothing new for Amazon, industry consultants suggest this can be a way for the ecommerce giant to avoid liability for accidents and other risks. Having a high employee turnover rate makes it difficult to conduct regular tornado safety training and also complicates things for local officials insofar as accounting for those who could be missing during similar calamities.

Amazon is also currently getting some flak for its plan to reintroduce a no-cellphone policy in its warehouses, as mobile phones become lifelines during natural disasters.

The Occupational Safety and Health Administration (OSHA) has opened a probe to investigate whether there have been violations of workplace safety/health regulations in the affected facility, and Amazon has committed to supporting the investigation.

Italy Fines Amazon $1.3B for Anti-Competitive Behavior

According to Italian competition authorities, Amazon has abused its market position by pushing its proprietary logistics service Fulfillment by Amazon (FBA) onto third-party sellers to the detriment of sellers who opt to use other fulfillment methods.

The report by the Autorità Garante della Concorrenza e del Mercato (AGCM) details how Amazon gives Prime advantages to those who use FBA, such that their listings appear more prominently on search pages and other places in the marketplace. FBA sellers also have a much higher chance of winning the Buy Box than those who opt to go Fulfilled by Merchant (FBM).

Doing FBA is not cheap, and the fees are constantly increasing but Amazon seems to have created a pay-to-play environment, where not being FBA could mean forgoing a lot of advantages (and potentially profits) as a seller. The Italian authority is asking Amazon to develop new standards that would level the playing field between third-party sellers using FBA and those who are not.

In the US, doing FBA for exactly those advantages seems like a foregone conclusion, but this billion-dollar fine could set a costly precedent for other ecommerce marketplaces.

This is not the first time that Amazon has been accused of monopolistic behavior. Barely a couple of weeks ago, The Institute of Local Self-Reliance (ILSR) came out with a report detailing how Amazon takes 34% of third-party seller revenue seemingly to fund its monopolistic empire.