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How Arlo Was Beaten Up By The Bully On The Block

Amazon has been exposed for trying to nobble competitors to their own products among the brands affected are Arlo who compete up against the Ring doorbell.

The Wall Street Journal claims that Amazon is limiting the ability of some competitors to promote their rival smart speakers, video doorbells and other devices on their e-commerce platform and that Arlo was singled out by Amazon for punishment after they aquired Ring.

The information was supplied to the News Corp owned publication by Amazon employees, they claim that some competing brands are allowed to spend money on Amazon’s advertising service but when it comes to getting a sale the Amazon owned product is pushed ahead of a competing brands product.

In other cases, Amazon won’t let its large competitors buy sponsored-product advertising.

Roku which makes devices that stream content to TVs, can’t even buy such Amazon ads tied to its own products, some of these people said. In some cases, Amazon has barred competitors from selling certain devices on its site entirely.

The policies show the conflicts between Amazon’s large e-commerce platform for sellers and its role as a product manufacturer in its own right.

In response to a request for comment, Amazon didn’t directly address the question of whether or not it nobbles rivals’ marketing. Instead, it said that it is common practice among retailers to choose which products they promote on their websites.

The WSJ also revealed that Amazon allows bidders to buy advertising to try to ensure their products appear at the top of search results. This includes purchasing the right to appear in search results for the products of rivals, a standard industry practice. When a company purchases such ads on Amazon, the products appear in the search results and are labelled as “Sponsored.”

In the case of competing device makers, Amazon’s devices team flagged some of the biggest to its advertising team to restrict them from buying ads tied to keywords for Amazon-branded products, according to the employees involved in advertising decisions. Amazon’s largest rivals in certain categories, which it calls “Tier 1 Competitors,” are unable to buy Amazon-specific keywords, those people said, while lesser competitors are allowed to buy the keywords.

When the devices team launches a new product, part of its strategy for bringing it to market is to determine which keywords to suppress in advertising, the people said. Employees are told to mark any discussion of this practice internally at Amazon with “privileged and confidential” in the subject line of emails so that regulators cannot access them, the people said.

An Amazon spokesman said that employees are instructed to mark emails as privileged only when seeking legal counsel.

Amazon’s acquisition of Ring shows how its ownership can change a device-maker’s fortunes on its site.

Before that deal, Arlo Technologies, which makes smart security products and doorbells, was the market leader for smart security devices. Emails in 2017 between Amazon’s management team discussing a potential acquisition of Ring referenced Arlo’s top position at the time. Ring held the second sales position, followed by Google Nest according to the emails, which were disclosed as part of a congressional hearing.

“To be clear, my view here is that we’re buying market position—not technology,” Mr. Bezos wrote that Dec. 15. “And that market position and momentum is very valuable.” Amazon bought smart camera and doorbell start-up Blink in late 2017 and purchased Ring a few months later in early 2018.

Since then, Arlo has been unable to buy keywords on Amazon’s sponsored product advertisements for Ring products, said people familiar with the matter.

Arlo’s team raised this issue with Amazon’s advertising team, the people said.
Arlo was concerned that it could buy keywords for competitors like Eufy and Wyze, but not for Amazon’s own brands such as Ring and Blink, the people said. The advertising team apologized to Arlo executives, and said that there was nothing they could do about the issue, the people said.

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