According tomedia reports, Amazon is accused of using its start-up investment projects to actually obtain product information developed by small companies, but to launch its own competitive devices. In other words, the company actually contacted a range of start-ups, met with their officials, and in some cases even bought a small stake, all to obtain data and then allow it to launch products similar to those developed by those start-ups.
Reports from the Wall Street Journal point to several examples, including a company called LivingSocial, whose representatives met with Amazon to discuss potential investments.
Amazon eventually bought a 30 percent stake in LivingSocial, but according to the report, the company then asked for proprietary data and reached out to its customers to offer better deals for similar products.
Officials working at Smart Speaker Ubi said they had met with Amazon executives to discuss the partnership. Amazon’s final offering sits on the same philosophy as theirs, as the Echo speaker is. Some entrepreneurs claim that after Amazon launched its competitive products, their businesses collapsed and they were forced to scale back.
Amazon, on the other hand, declined to comment on the report, explaining that meetings with the company it wanted to invest in were confidential. The company did add that any information obtained from such meetings would not be used to build competitive products, noting that any such claims would normally be settled in court.
“Over the past 26 years, we’ve created many features, products, and even new categories. From amazon.com itself to the Kindle to the Echo to AWS, few companies can claim to have a record of innovation comparable to Amazon’s. Business Insider quoted an Amazon spokesman as saying. Unfortunately, there are always self-interested parties who complain rather than build. Any legal dispute over intellectual property ownership is settled in court. “
Amazon is one of the U.S. companies facing anticompetitive misconduct charges, and CEO Jeff Bezos will testify before the House Judiciary Committee at an upcoming hearing.