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Lawmakers Want To Know If Amazon Used Data About Sellers On Its Platform To Develop Competing Products

Lawmakers Want To Know If Amazon Used Data About Sellers On Its Platform To Develop Competing Products

Lawmakers want to interrogate Amazon founder Jeff Bezos about a Wall Street Journal report that his employees used sensitive business information on the platform to compete with customers.

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Lawmakers want to interrogate Amazon founder Jeff Bezos about a report that his employees used sensitive business information to help the e-commerce marketplace giant compete with customers on its platform. Amazon CEO Jeff Bezos speaks during his news conference at the National Press Club in Washington, Thursday, Sept. 19, 2019. Bezos announced the Climate Pledge, setting a goal to meet the Paris Agreement 10 years early. (AP Photo/Pablo Martinez Monsivais)

On April 23, the WSJ reported that Amazon employees used information from third-party sellers on its platform to develop competing products. The report was based on Amazon’s internal documents and interviews with more than 20 current or former Amazon employees, lawmakers from both parties said in a letter to Bezos on Friday.

“If these allegations are true, then Amazon exploited its role as the largest online marketplace in the U.S. to appropriate the sensitive commercial data of individual marketplace sellers and then used that data to compete directly with those sellers,” the letter said.

Lawmakers on the House Judiciary Committee want a public forum to interrogate Bezos on Amazon’s private-label practices as well as other bipartisan concerns such as Amazon’s market power, its impact on small businesses and the safety of its workers.

Amazon recently fired Chris Smalls, a 31-year-old management assistant at a Staten Island warehouse who organized a walkout to protest the lack of protection against Covid-19. New York Attorney General Letitia James called the firing “disgraceful.”

At the time of the April WSJ report, Amazon said that it was a violation of company policy for employees to use data to inform private-label decisions in the way described. The company has launched its own internal investigation.

Sen. Josh Hawley (R., Mo.) asked the Justice Department to open a criminal antitrust investigation into Amazon.

Bezos — net worth: $139.7 billion — owns the Washington Post and has a mansion in northwest Washington. Amazon is a major government contractor but Bezos is not usually a public figure, WSJ reported.

Since the coronavirus shutdown, Bezos has become richer. His wealth grew by $24 billion since the shutdown began, Quartz reported. That makes him the world’s richest person, worth almost $40 billion more than Bill Gates, and almost twice as much as Warren Buffett.

Amazon and other technology giants have been under investigation by the House panel since last summer. Firms including Amazon have turned over millions of pages of documents, officials said, though they haven’t been made public.

Amazon hasn’t fully responded to requests for information about its relationship to sellers, lawmakers said on Friday. “Seven months after the original request—significant gaps remain,” the letter said.

Bezos founded Amazon in his garage at home in 1994 and it has grown into one of the largest companies in the world with a $1.2 trillion market capitalization. Its role operating a marketplace while competing with it has drawn the attention of regulators.

Last week, the U.S. trade representative’s office put Amazon’s web domains in the U.K., Canada, France, Germany and India on its “notorious markets” list of platforms that are believed to facilitate intellectual-property violations. Amazon said the action was politically motivated by the Trump administration. Trump has criticized Bezos for what the president called unfavorable coverage in the Washington Post.

In 2000, Amazon started letting third-party retailers sell goods through the site. In 2019, Bezos told shareholders that third-party sellers accounted for more than half (58 percent) of the physical gross merchandise sold on Amazon, Guardian reported.

This made antitrust campaigners and advocates for fair competition uneasy, especially as Amazon moved more aggressively into selling private label goods that compete directly with marketplace sellers. Sen. Elizabeth Warren, an Amazon critic. likened Amazon’s position to being “both the umpire and a player in the game”.

In July 2019, Amazon associate general counsel Nate Sutton swore under oath that to congress that Amazon does “not use any seller data to compete with” third-party sellers or to inform decisions about launching its private label brands.

Former employees said it was standard practice, the Wall Street Journal reported.

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Lawmakers want Bezos to testify before Congress and address statements by the company that “appear to be misleading, and possibly criminally false or perjurious”.

Bezos hasn’t testified before Congress before but refusing to do so will be difficult.

“Amazon often acts as though it’s above the law,” said Stacy Mitchell, the co-director of the Institute for Local Self-Reliance. Mitchell testified before the House committee, at the same hearing in which Sutton made his disputed statement.

“Amazon doesn’t just dominate markets,” she said at the time. “Through its control of essential infrastructure, it has assumed governing authority over a growing share of our commerce … Amazon has the power to regulate, tax, and punish Americans engaged in trade … To restore competition and safeguard our liberty, we need to both restructure and regulate Amazon.”