Amidst the looming specter of a potential antitrust lawsuit from the Federal Trade Commission (FTC), Amazon is strategizing a reduction in its lineup of in-house product lines.
As detailed by The Wall Street Journal, the e-commerce giant intends to phase out 27 out of its 30 clothing brands and discontinue its entire selection of private-label furniture ranges.
The extent of the impact of these cuts on other segments remains uncertain; however, indications suggest that the Amazon Basics label will largely endure, if not completely.
Amazon conveyed to the WSJ that its objective is to withdraw items that fail to strike a chord with its customer base.
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Brands such as Lark & Ro, Daily Ritual, and Goodthreads, among others, reportedly fall within the scope of being gradually discontinued from Amazon’s clothing offerings. (On the other hand, Amazon Essentials, Amazon Collection, and Amazon Aware are purportedly set to persist.)
Simultaneously, reports suggest that the company is on track to phase out its Rivet and Stone & Beam furniture brands, ceasing their existence once existing inventories are depleted.
Matt Taddy, Vice President of Amazon Private Brands, articulated that the company’s choices are underpinned by customer preferences for their major labels such as Amazon Basics and Amazon Essentials, which are renowned for delivering superior value through top-notch products at attractive price points.
While Amazon refrained from explicitly linking these alterations to the anticipated FTC legal action, the timing of events appears too closely aligned to be coincidental.
Representatives of the company are reportedly scheduled for a meeting next week with FTC Chair Lina Khan, accompanied by commissioners Rebecca Kelly Slaughter and Alvaro Bedoya.
This conversation is being viewed as a final attempt to persuade the government agency to reconsider before official proceedings are initiated—a last-ditch endeavor to sway the FTC’s stance.
The impending lawsuit marks the culmination of a rigorous four-year examination into allegations of Amazon’s anti-competitive conduct.
Additionally, the company faces a separate lawsuit from the FTC concerning allegations of maneuvering customers into subscribing to Prime memberships.
A considerable share of the FTC’s interest reportedly revolves around Amazon’s interactions with third-party vendors, a consistent focal point in antitrust debates.
In 2020, The WSJ disclosed that Amazon personnel leveraged internal data pertaining to third-party sellers to engineer proprietary products.
This practice led to Amazon agreeing to desist from enhancing the prominence of its in-house brands in search results, thereby rendering them less visible and more challenging to sell.
