Why it matters: It's not been a good week for Amazon. The retail giant has found its "Amazon's Choice" label, which indicates recommended items on the site, under scrutiny by Senators who want to know why some of these products are junk. Now, the company is accused of previously running a program where it allowed merchants to "bid" for the badge.
Digiday reports that it's unclear how many vendors took up this offer, which is believed to have only been available for a few months back in 2017. The publication writes that while the Amazon Choice label wasn't explicitly offered for a price, there was an internal process in place that could be seen as manipulating the system.
Amazon reportedly had criteria in place for brands that wanted to place bids, ensuring they came only from those already selling high-quality goods on its platform.
In one case, an Amazon strategic vendor service manager recommended the brand drop its selling price by $30 in order to win the bid, thereby increasing Amazon's profits on the sale.
Amazon also allegedly offered incentives to potential bidders, including free and discounted analytics services, Amazon Vine credits, email promotions, and higher inventory purchases for 12 weeks. In return, Amazon wanted brands to commit to putting resources into their listings to win a badge. The company "asked bidders to list investments that they planned to make to support the product, as well as marketing that already was running," writes Digiday.
Amazon denies there was ever a program in place that let vendors pay for an Amazon Choice badge.
Following a Buzzfeed investigation that revealed certain Amazon Choice products contained defects or were the result of review manipulation, US senators Bob Menendez (D-NJ) and Richard Blumenthal (D-CT) sent a letter to Amazon CEO Jeff Bezos demanding more details about how the badge works. The company has until September 16 to respond.