Amazon's search results have become less likely to favor the company's own products, according to research from a University of Minnesota economist.

The search ranking change coincides with Amazon's designation as a gatekeeper under Europe's Digital Markets Act (DMA). It affects Amazon search results not only in Europe but also in the US.

In a paper titled "Amazon Self-preferencing in the Shadow of the Digital Markets Act," distributed via the National Bureau of Economic Research, Joel Waldfogel, professor of applied economics at the University of Minnesota's Carlson School of Management, describes how he analyzed eight million Amazon search listings across 22 Amazon domains in the US, Europe, and elsewhere, between late June 2023 and March 2024.

His motivation for doing so follows from the DMA's requirement that designated gatekeepers, like Amazon, not favor their own services or products to the detriment of rivals. His paper looks at how Amazon's search behavior has changed in the face of new compliance obligations.

This remains an area of active concern among EU lawmakers. In a speech on DMA compliance in Brussels on March 25, Thierry Breton, European Commissioner for the single market, said: "We are currently checking if Amazon is treating all products on its Amazon Store fairly - and not favoring its own brand products. The Amazon Store has direct impact not only on countless sellers, retailers and service providers, but also on millions of consumers. It is therefore crucial that Amazon complies with the DMA provisions against self-preferencing."

US regulators have also taken aim at platforms that favor their own stuff. In September 2023, the US Federal Trade Commission sued Amazon alleging among other things that the company biases its search results for its own benefit. Potential federal legislation, the American Innovation and Choice Online Act, also includes a prohibition on self-preferencing.

Amazon insists it provides fair search results. It published a compliance report [PDF] that describes how the company has responded to the DMA. The biz maintains that its ranking processes are unbiased and thus are compliant with Article 6(5) of the DMA, which forbids self-preferencing.

"That is the Store's primary goal when ranking results in response to a search query on the product search results page," Amazon's report says. "Our ranking models do not differentiate on the basis of whether the product is sold by Amazon Retail or a Seller or whether it is an Amazon product or a third-party product."

And yet something happened to Amazon's search listings around October last year, just after the company was officially designated a gatekeeper under the DMA.

Waldfogel used a set of generic search terms (e.g. mouse pad, shoes, etc.) entered into Amazon.com's search box and assessed the order (rank) in which product listings appeared on the search results page.

First, he found that based on criteria like star ratings, prices, and other product characteristics, Amazon gave its own products search ranks that were, on average, 24 positions better than expected during the sample period.

Second, he found that the Amazon rank differential is large when compared to the 142 other brands considered.

"Third, after the EU's designation of Amazon as a 'gatekeeper' platform, the rank of Amazon products in Amazon search results changed substantially: the Amazon rank differential fell from a 30, to a 20 rank advantage, while other brands' search ranks did not change," the paper explains.

Waldfogel notes that the rank differential can't be definitively attributed to self-preferencing. Other factors like differences in product quality come into play.

"What is interesting, instead, is the change in the Amazon rank differential that occurred in about October 2023," he told The Register in an email. "For whatever reason, there is now a change in the extent to which Amazon's search rankings give preference to their own products."

Waldfogel leaves open the question of whether consumers are better off as a result of these changes.

Amazon did not immediately respond to a request for comment. ®

https://www.theregister.com//2024/04/12/amazon_search_self_preferencing/