Amazon Deprives Rivals Of Key Ad Spots: WSJ

Amazon.com Inc AMZN is restricting the ability of some of its large competitors to purchase search advertising when their products compete with its own, the Wall Street Journal reported Monday.

What Happened: Makers of smart speakers and video doorbells — among other devices— are being constrained from buying sponsored-product ads linked to searches on the e-commerce portal, Amazon employees and rival company executives told the Journal.

These are the products that directly compete with Amazon's own offerings like Fire TV, Echo Show, and Ring Doorbell.

Companies affected by such policies include TV streaming devices maker Roku Inc ROKU and home automation firm Arlo Technologies Inc ARLO.

“News flash: retailers promote their own products and often don’t sell products of competitors,” Drew Herdener, an Amazon spokesman told the Journal.

The spokesman pointed out that rival Walmart Inc WMT refuses to sell Amazon products. 

Why It Matters: The Jeff Bezos-led company makes up for 38% of online shopping in the United States with nearly half of online shopping searches in the country starting on Amazon.com, the Journal noted.

The e-commerce giant’s digital advertising business reportedly occupies the third spot — only behind Alphabet Inc’s GOOGL GOOG subsidiary Google and Facebook Inc FB. 

In April, it was reported that the retail giant’s employees used privileged information from third-party seller data to determine which new Amazon products to launch.

The retail behemoth is being charged with Antitrust violations in the European Union — for being both a marketplace and a seller at the same time.

Price Action: Amazon shares closed nearly 5.7% higher at $3,128.99 on Tuesday and fell 0.35% in the after-hours session.