As artificial intelligence and data-driven analytics rapidly transform online retail, a surprising dynamic is emerging: some e-commerce platforms deliberately allow third-party analytics tools to scrape or access marketplace data, even though doing so could weaken the platform’s competitive advantage.
A new study published in Marketing Science, a flagship journal of the Institute for Operations Research and the Management Sciences (INFORMS), uncovers why platforms like Amazon, eBay and Alibaba may strategically choose to open their data rather than restrict it.
The study is titled “Data and Algorithms: Strategic Disclosure of Competitiveness on Platforms Through Marketplace Analytics” by Yi Liu of the University of Wisconsin–Madison and Fei Long of the University of North Carolina.
Marketplace analytics, tools which help sellers understand pricing, competition and demand, have become central to e-commerce strategy. Major platforms offer their own analytics dashboards, but many sellers rely on third-party tools such as Jungle Scout or Helium 10. These services often depend on data scraped from the platform itself.
The common assumption is that platforms would prefer to keep data closed and confidential so that they can maintain control, protect their own proprietary insights and prevent competitors from imitating their analytics capabilities. But the study authors have found that that platforms’ incentives are more nuanced, and sometimes counterintuitive.
“We were able to show that platforms have strong incentives to design analytics algorithms that make markets appear less competitive than they actually are,” said Liu. “In the process, by making conditions appear better for sellers, the platform is able to—very subtly—encourage higher seller prices on the platform, which increases the platform’s commission revenue.”
The study authors were quick to point out that this sort of manipulation can create a trust problem.
“Sellers on the platform cannot verify the platform’s algorithm before using it, and they know the platform may prioritize its own revenue,” Long explained. “This uncertainty can discourage sellers from adopting the platform’s analytics completely.”
When sellers on the platform refuse platform analytics, both sides lose. The sellers make poorer, less informed pricing decisions. And platforms collect fewer commissions.
The study authors determined that by counterintuitively allowing third-party analytics providers access to platform data they can actually increase platform revenue. They contend this is possible because third-party services do not have an incentive conflict with sellers, and thus sellers on the platform trust them more.
Publication details
Yi Liu et al, Data and Algorithms: Strategic Disclosure of Competitiveness on Platforms Through Marketplace Analytics, Marketing Science (2025). DOI: 10.1287/mksc.2024.0960
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