How Amazon’s robots squeeze out mom-and-pop shops

Today in “machines running the show”: The folks at ProPublica spent several weeks on looking at 250 frequently purchased items to see whether the company’s algorithm would truly surface the lowest available prices. The result: Amazon mostly favored products its sells directly, even when the items were offered at substantially cheaper prices by third-party companies. In fact, Amazon’s own products and the products of sellers it charges for services appeared in the all-important “buy box” about 75% of the time, ProPublica says, giving the e-commerce giant a significant edge over the smaller businesses selling products on Amazon. 

That might seem like an obvious conclusion, but it’s troubling when you think that small brick-and-mortar retailers across the country are already struggling to keep their doors open, and many have no choice but to sell products on Amazon to just to survive. It would be nice if they didn’t have to compete against biased algorithms, too.

Update: Amazon sent the following statement, which it also sent to ProPublica): 

“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.”

[Photo: Flickr user Mike Seyfang]CZ