Amazon's new CEO faces antitrust and worker pressureOctober 18, 2021
New York (CNN Business)A bipartisan group of lawmakers warned Amazon on Monday they are concerned top executives including former CEO Jeff Bezos may have misled or even lied to Congress about the company’s business practices.
The lawmakers, members of the House Judiciary Committee’s antitrust subcommittee, cited recent media reports that cast doubt on testimony provided by Amazon (AMZN) senior executives about how the company uses its vast influence to help its own brands.
“At best, this reporting confirms that Amazon’s representatives misled the committee,” the lawmakers wrote in a letter to Amazon CEO Andy Jassy. “At worst, it demonstrates that they may have lied to Congress in possible violation of federal criminal law.”
The letter, first reported by The Wall Street Journal, was signed by Democrat Reps. Pramila Jaypal, David Cicilline and Jerrold Nadler as well as Republican Reps. Ken Buck and Matt Gaetz.
Considering criminal referral
The lawmakers said they are giving Amazon a “final opportunity to provide exculpatory evidence” to corroborate the previous testimony and statements on behalf of Amazon to the committee.
Amazon executives have previously told lawmakers that the company doesn’t use the data from individual third-party sellers to inform the development of its own private brand products.
“We strongly encourage you to make use of this opportunity to correct the record and provide the committee with sworn, truthful, and accurate responses to this request as we consider whether a referral of this matter to the Department of Justice for criminal investigation is appropriate,” the letter said.
The letter cited testimony given in 2019 and 2020 by founder Bezos, associate general counsel Nate Sutton and written remarks provided by general counsel David Zapolsky and vice president for public policy Brian Huseman.
‘Incorrect and unsubstantiated’
In a statement, Amazon defended its executives’ testimony to Congress.
“Amazon and its executives did not mislead the committee, and we have denied and sought to correct the record on the inaccurate media articles in question,” an Amazon spokesperson said in a statement.
The lawmakers pointed to a Reuters investigation that used a trove of internal Amazon documents to show how the company ran a “systematic campaign of creating knockoffs and manipulating search results” to help its own product lines in India, one of its largest growth markets. The report found Amazon’s private brands in India exploited internal data to copy products sold by other companies and then offer them on the Amazon platform.
Amazon has called this Reuters report “incorrect and unsubstantiated” and reiterated that it “does not give preferential treatment to any seller on its marketplace.”
Another report last week, from The Markup, found Amazon “places products from its house brands and products exclusive to the site ahead of those from competitors — even competitors with higher customer ratings and more sales, judging from the volume of reviews.”
Amazon said in response to The Markup report that it does not favor store brand products through search and “strictly prohibits” its employees from using non-public, seller-specific data to determine which store brand products to launch.
“We have an internal policy, which goes beyond that of any other retailer’s policy that we’re aware of, that prohibits the use of individual seller data to develop Amazon private label products,” Amazon said in a statement. “We investigate any allegations that this policy may have been violated and take appropriate action.”
The pressure from members of the House antitrust subcommittee comes days after Senator Elizabeth Warren doubled down on her call for Amazon to be broken up. The Massachusetts Democrat told CNN that Amazon uses its power to “smash little businesses before they ever get a foothold” and likened the company to a “monster that has to be fed every minute.”
CNN’s Seth Fiegerman contributed to this report.
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