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A House subcommittee is scrutinizing whether the company unfairly competes against its own marketplace sellers.
Seven US Congress members have called on Amazon CEO Jeff Bezos to testify as part of a House of Representatives antitrust probe into Amazon and other tech giants. The demand follows a Wall Street Journal report that alleged Amazon employees accessed non-public information about the company’s third-party sellers to create competing brands. Amazon previously told Congress that internal policies prohibited those practices.
The House members — four Democrats and three Republicans — told Bezos in a May 1 letter that “we expect that you will testify on a voluntary basis,” but threatened to subpoena him if he does not comply with the request to appear.
“In light of our ongoing investigation, recent public reporting, and Amazon’s prior testimony before the Committee, we expect you, as Chief Executive Officer of Amazon, to testify before the Committee,” members of the House antitrust subcommittee wrote. “It is vital to the Committee, as part of its critical work investigating and understanding competition issues in the digital market, that Amazon respond to these and other critical questions concerning competition issues in digital markets.”
An Amazon spokesperson did not immediately respond to a request for comment.
The Bezos demand comes a week after a report from the Wall Street Journal revealed Amazon employees have at times accessed data from individual marketplace sellers to help decide which products Amazon would create and sell under its own brand names, known as private-label brands. The report appears to contradict statements made under oath by a top Amazon lawyer, Nate Sutton, who stated at a congressional hearing led by the House antitrust subcommittee that Amazon does not use data from sellers to create its own products. In follow-up responses to Congress, Amazon clarified that it does not use data from individual sellers to inform the creation of its own brands, only aggregate data from multiple sellers.
“If the reporting in the Wall Street Journal article is accurate, then statements Amazon made to the Committee about the company’s business practices appear to be misleading, and possibly criminally false or perjurious,” the letter to Bezos says.
Amazon previously said that it was conducting an internal investigation to see if employees violated its policies on seller data. The Wall Street Journal report said such rules “weren’t uniformly enforced.”
The seven Congress members who signed the letter are House Judiciary Chair Jerry Nadler (D-NY) and six members of the House Judiciary subcommittee on antitrust, including the head of the subcommittee, Rep. David Cicilline (D-RI).
The question of whether Amazon unfairly competes with the hundreds of thousands of sellers who help line the virtual shelves of the Everything Store has been an area of focus for the congressional antitrust investigation that launched last year, as well as an informal probe by regulators at the Federal Trade Commission. Amazon acts both as a platform on which small and midsize merchants can sell directly to Amazon shoppers — these sellers make up nearly 60 percent of all Amazon retail sales — and as a retailer that competes against these sellers through the sale of its own brands like Amazon Basics as well as by reselling popular national brands.
Other retailers like Walmart and Target also sell successful in-house brands, but politicians like Sen. Elizabeth Warren (D-MA) have argued that Amazon’s unique role as both a platform and a retailer allows it to unfairly compete against its own sellers.
The Wall Street Journal report relayed one anecdote where “Amazon employees accessed documents and data about a bestselling car-trunk organizer sold by a third-party vendor. … Amazon’s private-label arm later introduced its own car-trunk organizers.” The data included non-public information like how much advertising the third-party seller spent on Amazon for each unit it sold.
Amazon told the Journal that such behavior would violate its policies, but it is not clear what, if any, safeguards the company had put in place to prevent employees from accessing such data. An Amazon spokesperson told Recode last week that there was more than one seller of the original car-trunk organizer, meaning the company used data aggregated from multiple sellers. The Journal reported that the one additional seller sold just 17 units over the period in question.
The House antitrust subcommittee overseen by Cicilline originally planned to file a report on its investigation into Amazon, as well as Apple, Google, and Facebook, by the end of March. The coronavirus pandemic has delayed the completion of the report, but Cicilline has said it will still be released, though he didn’t say when.
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via Vox – Recode