Have you noticed that Amazon's searches and recommendations tend to steer you toward its own products and partners, rather than whatever happens to be the best deal? You're not alone. ProPublica has conducted research showing that Amazon's algorithms favor either its own gear or that of companies that pay for its Fulfilled by Amazon program, even when the price is substantially higher. When hunting for 250 commonly purchased products, Amazon-friendly placements beat significantly lower-priced items for the coveted Buy Box placement (the one most shoppers click) "about three-quarters" of the time.
Even when you're looking at a direct price comparison, Amazon reportedly isn't playing fair. It'll omit shipping costs for products from itself and its partners, but not those of other third parties.
When asked, Amazon told ProPublica that its algorithms consider many points beyond price. "Vast selection, world-class service and fast, free delivery" are also important, a spokesperson says. And to a degree, that's true. Many shoppers can attest to third parties on Amazon who lure you in with a low price, only to take forever to ship or give you the runaround when you have a problem. And of course, the initial price isn't necessarily the lowest in practice -- if you order enough items at once or subscribe to Amazon Prime, there may be no point to going with an alternative.
The problem, as you might guess, is that this could be construed as anti-competitive. It punishes those merchants that can't afford to participate in Fulfilled by Amazon, and gives visitors a distorted view of their options. Do you offer more than a cursory glance to all the retailers selling a given item? Probably not. Much as with the EU's case against Google, there's a worry that Amazon is using its dominance to squeeze out the competition. It may improve some aspects of the experience by favoring itself, but it could also be hurting your chances at getting a good discount.
Update: Amazon tells us that the majority of its items (9 out of 10) ship for free if you use either the free shipping option or Prime. The algorithms are designed to take those items into account, it says. You can read its statement below; we've also included its original statement to ProPublica after that.
"With Prime and Super Saver Shipping (which requires no membership and ships orders above $49 for free), the vast majority of our items ordered – 9 out of 10 – can ship for free. The sorting algorithms the article refers to are designed for that 90% of items ordered, where shipping costs do not apply."
"Customers trust Amazon to have great prices, but that's not all— vast selection and fast, free delivery are also critically important. These components, and more, determine our product listings to ensure that customers have the best overall experience when shopping on Amazon. If a customer is solely looking for the lowest price available, as you have with this study, we clearly alert them on the product detail page that lower prices may be available from other sellers."