Amazon (NASDAQ: AMZN) has once again come under the limelight for pulling a highly controversial move involving a new product-search system that places a spotlight on its own listings on the website.
In fact, the new algorithm was so controversial, that it was even doubted and protested by the company's own employees.
The way the algorithm works is by bringing to the forefront products that are more profitable, or the company's own products, instead of things that are most relevant to the consumer based on key terms they searched.
It was allegedly Amazon's retail business that spearheaded the initiative in order to show more profitable numbers and rack up more revenue, The programmer group that created the algorithm is called "A9," but remains ethically opposed to the move because of the fact that it undermines the consumer: "This was definitely not a popular project," said a group member. "The search engine should look for relevant items, not for more profitable items."
This is a hot-button topic because of the fact that first-page results usually have the most impact on final purchases, according to marketing analytics firm Jumpshot.
Moreover, in terms of antitrust regulations, US and EU regulators have increasingly been suspicious of Amazon as it operates as both a market leader and seller of its own products, endowing it with a monopolistic hue. Thus, this algorithm could be the push over the edge that regulators need to crack down hard on Amazon, which has increasingly been questioned for its lack of attention towards ethical issues.
In fact, the EU had fined Google $2.7 billion in 2017 for doing the very same: spotlighting its own shopping service through its search engine.
"The Wall Street Journal has it wrong," Amazon spokeswoman Angie Newman retorted after a barrage of complaints. "We explained at length that their 'scoop' from unnamed sources was not factually accurate, but they went ahead with the story anyway. The fact is that we have not changed the criteria we use to rank search results to include profitability.
"We feature the products customers will want, regardless of whether they are our own brands or products offered by our selling partners. As any store would do, we consider the profitability of the products we list and feature on the site, but it is just one metric and not in any way a key driver of what we show customers."
It remains to be seen to what extent the algorithm will give the company an unfair advantage, and if it will come under strict scrutiny for the same.