How safe is our data? China's Amazon investigates data breach by employees

Data protection is big, and only getting bigger.

Global media recently reported Amazon's employees in China were reportedly selling consumer data for as little as $80 to marketplace vendors or sellers who wanted to understand consumers and use the platform to get discovered. It is also reported that Amazon was investigating the same.

"We hold our employees to a high ethical standard and anyone in violation of our code faces discipline, including termination, and potential legal and criminal penalties," an Amazon official said in a statement.

Globally, Amazon has two million vendors selling 550 million products through the marketplace. Data company FactSet says the annual GMV for Amazon is around $200 billion. In terms of data protection, Amazon has strict audit and security protocols, but attempts to play the system are not unheard of.

India significance

Amazon’s move in China resonates in India as well, with more than 300,000 sellers registered on the ecommerce platform. Flipkart and Amazon have close to 80 million customers.

Sellers who joined the platforms have benefitted from growth of the online segment as it carries zero distribution cost and increases margins. “My margins increased thanks to my not having to invest in warehouses and providing higher margins to distributors. They are very protective of consumer data and one should not worry; we get our sales analytics, and never details of a customer,” says the managing director of an organic foods brand.

A source at Amazon in India says, "We check all sellers, and have strict norms on data protection of customers."

However, as competition grows, sellers may seek access to customer data. This is where Amazon has to ensure its internal data is secure, so there are no scares like in China.

The Justice Srikrishna committee report on data protection outlines a list of norms to protect Indian consumers. India’s Data Protection Authority has been entrusted with the enforcement and effective implementation of data protection.

As India is busy consuming, companies need to be cognisant of the consequences of stolen data, and the requirement to protect it in the first place.