Did Amazon lie to Congress? Top antitrust lawmakers want to know.
Two US members of Congress overseeing an antitrust investigation into Amazon want to know if a top official for the company lied while giving congressional testimony about whether or not the e-commerce giant unfairly competes against smaller, independent sellers on its marketplace.
The representatives are reacting to a report from the Wall Street Journal that 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 one of the lawmakers that Amazon does not use data from individual sellers — and only uses data aggregated from multiple sellers — to create its own products.
In a statement sent to Recode on Thursday, Rep. David Cicilline (D-RI), who leads the House antitrust subcommittee that is investigating Amazon and other tech giants, said, “At best, Amazon’s witness appears to have misrepresented key aspects of Amazon’s business practices while omitting important details in response to pointed questioning. At worst, the witness Amazon sent to speak on its behalf may have lied to Congress.”
House Judiciary Chair Jerry Nadler (D-NY) added, “We plan to seek clarification from Amazon in short order, in light of this troubling report.”
An Amazon spokesperson did not immediately respond when Recode questioned them about the politicians’ remarks, but previously said in a statement, “It’s simply incorrect to say that Amazon was intentionally misleading in our testimony. As we told the Wall Street Journal and explained in our testimony, we strictly prohibit employees from using non-public, seller-specific data to determine which private label products to launch. 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.”
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 both acts as a platform on which small and mid-sized merchants can sell directly to Amazon shoppers — these sellers make up nearly 60 percent of all Amazon retail sales — as well 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. Warren last year outlined a plan to separate Amazon’s own lines of brands from the rest of its business in the case that she became president.
The Wall Street Journal, citing former and current employees, reported on Thursday that in “one instance, 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 nonpublic 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 Amazon had put in place to prevent employees from accessing such data. An Amazon spokesperson also told Recode that there was more than one seller of the original car-trunk organizer — meaning the company used data aggregated from multiple sellers — though the Journal reported that the one additional seller sold just 17 units over the period of time 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.
Support Vox’s explanatory journalism
Every day at Vox, we aim to answer your most important questions and provide you, and our audience around the world, with information that has the power to save lives. Our mission has never been more vital than it is in this moment: to empower you through understanding. Vox’s work is reaching more people than ever, but our distinctive brand of explanatory journalism takes resources — particularly during a pandemic and an economic downturn. Your financial contribution will not constitute a donation, but it will enable our staff to continue to offer free articles, videos, and podcasts at the quality and volume that this moment requires. Please consider making a contribution to Vox today.