Is Amazon Taking Steps to Corner the Ecommerce Data Market?

Amazon bizarrely singled themselves out this past Friday, publishing a blog post that supported a California consumer protection bill known as AB 3262. AB 3262 is a piece of legislation that basically looks to hold online or e-retailers to the same standards as your traditional street business and will be voted on by the California state senate this week. So the question is why would Amazon vocally express their support for a bill that will hopefully hold them responsible for faulty products obtained and sold by them via third party sellers?

Why is Amazon supporting a bill that could hurt them?

Well, according to Etsy CEO Josh Silverman in a CNBC interview, “Amazon are “taking bold steps to wipe out its competitors.” Silverman says that Amazon’s support for the bill is not in good faith or for actually protecting consumers, it is so Amazon can get an even tighter grip on the e-retailer industry because other companies don’t have the finances or time to keep up with this “complicated” legislation.

Amazon oversees arguably the largest online marketplace that hosts millions of third-party sellers and these third party selling  accounts make up about 60% of the e-commerce sales of the company. Amazon’s use of third party sellers has allowed them to quickly surpass any other e-market retailer. This dominant position is more than just revenue to their bottom line. It also allows them to capture by far the most ecommerce data in the world. 

What could Amazon gain from this?

It’s hardly a secret to those in the data industry that Amazon has been slowly building an advertising behemoth to rival Google and Facebook. This venture into advertising technology is built on their trove of ecommerce data, helping marketers pinpoint consumers across the Internet that have purchased or shown in-market interest for relevant products.

Loginhood believes that Amazon’s attempts to stomp out competing ecommerce companies is also a long term move to bolster its position as the dominant ecommerce data provider. With fewer options to access data targeting as cookies are removed from the Internet , ‘walled-garden’ tech giants are in an increasingly advantageous position. 

Amazon’s recent earnings showed just how much value their advertising business is generating, so it should be no surprise that they could be taking steps to bolster its position in this space.