May 04, 2020
House Committee Threatens to Subpoena Bezos
Issues center on potential perjury related to past testimony from Amazon and allegations that the company uses data from third-party sellers on its platform to make its own products.
A powerful Congressional committee has threatened to subpoena Amazon founder Jeff Bezos.
Concerned that Amazon made “misleading and possibly criminally false perjurious” statements during a previous testimony about its competitive practices, the House Judiciary Committee wants Bezos to voluntarily submit to questioning about whether Amazon uses certain information about third-party vendors that sell on its e-commerce platform to create its own products.
The interest from Congress comes after an article from The Wall Street Journal reported that Amazon used proprietary data from independent sellers to make its own items, which would compete with the products made by the other businesses. Last year, Amazon testified to Congress that it does not access such data.
Amazon says it doesn't use information on third-party sellers to inform its private-label business. But interviews with more than 20 employees and documents I reviewed show a pattern of using this data to create their own competing itemshttps://t.co/FY4ROVoc2g $AMZN
— Dana Mattioli (@DanaMattioli) April 23, 2020
While Amazon’s stated policy is not to review the information in question when making and developing its own products, the e-commerce giant, in fact, does engage in such activity, according to more than 20 former employees and business documents, the report in the WSJ asserted.
Using such information can help Amazon determine everything from how to price a competing product to understand what product features to emulate and more, the WSJ reported.
“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,” reads a letter from the House Judiciary Committee.
Signed by both Republican and Democrat lawmakers, the bipartisan letter further states: “If true, these allegations contradict previous testimony and written responses that Amazon submitted to the Committee. For example, at our hearing on July 16, 2019, Representative Pramila Jayapal asked about Amazon's use of third-party seller data, and Nate Sutton, Amazon’s Associate General Counsel, responded that ‘we do not use any seller data to compete with them.’ ”
After the WSJ article broke on April 23, Sen. Josh Hawley of Missouri called on the U.S. Department of Justice to investigate Amazon.
Senator: Investigate Amazon for Antitrust Crimes https://t.co/AA9NpW2N8j
— Chris Ruvo (@ChrisR_ASI) April 29, 2020
“Abusing one’s position as a marketplace platform to create copycat products always is bad, but it is especially concerning now,” Hawley, a Republican, said in a statement. “Thousands of small businesses have been forced to suspend in-store retail and instead rely on Amazon because of shutdowns related to the coronavirus pandemic. Amazon’s reported data practices are an existential threat that may prevent these businesses from ever recovering.”
In a statement reported by NPR, Amazon denied any wrongdoing. The company didn’t indicate if Bezos would be appearing for questioning before the committee.
“We strictly prohibit employees from using non-public, seller-specific data to determine which private label products to launch,” the Amazon statement said in part. “While we don’t believe these claims made by the Wall Street Journal are accurate, we take these allegations very seriously and have launched an internal investigation.”