Amazon Ready to Invest Billions in Policing Products on Its Site
October 22 2019 - 8:10PM
Dow Jones News
By Tripp Mickle
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
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 here at the WSJ Tech Live conference, Mr. 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 Mr. 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
U.S., the Federal Trade Commission is probing possible monopoly
practices by Amazon.
Mr. 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 Mr.
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.
Mr. 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.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
October 22, 2019 19:55 ET (23:55 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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