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Amazon criticised over pricing practices

26 September 2016 - 11:42 by David Aiken

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E-commerce giant, Amazon, has come under fire again this week after a report from ProPublica claimed that its algorithms were privileging more expensive items over cheaper listings of the same product, according to the Guardian.

Analysts assessed a group of popular products and looked at the options which were given as a recommended purchase, drawing the conclusion that the items on show tended to be priced higher than those that could be found from third party sellers also using Amazon’s platform for shopping online.

The items which appear in the so-called ‘buy box’ are purchased more often than any other identical equivalent because of the prominent position afforded to them by the automated algorithms which work in the background. But customers could be spending up to 20 per cent more for the same product because of the apparent weighting towards higher prices.

Furthermore, it was pointed out that even in the price comparison section of Amazon’s site, the items it sells direct have the advantage over those from third parties because it does not include shipping costs. This is in spite of the fact that only Prime subscribers are eligible for free shipping on all items.

Amazon issued a statement in response to the claims, in which it said that its algorithms take a whole range of metrics into account when determining which products to place in the buy box. And while price is indeed one of these factors, it is balanced out by things like the rating attached to a specific seller and the distance from which the product would need to be shipped to reach the buyer.

Algorithms are a staple of safe shopping online, not only on retail sites themselves but also as powerful, unseen tools within search engines like Google. And as companies attempt to make the online experience more bespoke, issues like this are inevitable.