Foreshadowing a battle over Amazon’s overwhelming control of e-commerce, Williams-Sonoma filed a lawsuit against Amazon in the final days of 2018, charging that the retail juggernaut used its market power to copy the furniture maker’s products and squeeze it out of the market.
The suit claims that Amazon has an unfair capacity to stifle competition, leveraging its tremendous amount of first-party data on consumer desires and the product search algorithm on its platform to foreground its own private labels and squash rival hopes, Forbes reported.
The interesting angle in this case is that analysts had actually predicted that Williams-Sonoma would be a good candidate to survive a challenge from Amazon. Its products, external watchdogs wagered, were likely to earn the dollars of customers committed to buying in-store, preventing Amazon’s digital advantage from rendering competition obsolete.
Apparently, Amazon can use its digital position to crush rivals on whatever product lines it wants to sell.
Another key point in Forbes’ detailed report: Amazon allegedly uses the keywords consumers search for on its own site to advertise its private-label products on Google search, showing once more the seemingly unfair competitive advantage Amazon’s market position has established.
Joe Zappa is Street Fight’s managing editor.