Lawmakers on the House’s top competition-focused panel pointed to statements that Amazon made starting last July, when officials explicitly told Congress that “we do not use any seller data to compete with them.” Lawmakers raised the possibility that Amazon might have committed perjury during its earlier testimony on Capitol Hill.
“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,” Rep. David N. Cicilline (D-R.I.), the chairman of the antitrust subcommittee, told Bezos. He was joined by Reps. Jerrold Nadler (D-N.Y.), the House Judiciary Committee’s chairman, and F. James Sensenbrenner Jr. (R-Wis.), the second-most-senior member of the House, indicating the early, wide support that such a hearing has garnered in Congress.
“Although we expect that you will testify on a voluntary basis,” the lawmakers continued, “we reserve the right to resort to compulsory process if necessary.”
In a tweet, Cicilline later wrote that he is “considering whether a perjury referral is warranted,” citing a federal law that makes it illegal to knowingly falsify evidence to Congress. “Powerful companies are not above the law,” he added.
Amazon did not respond immediately to a request for comment. Bezos owns The Washington Post.
The bipartisan nature of the ultimatum Friday only amplifies the political pressure on Bezos, whose appearance on Capitol Hill could evolve into a wide-ranging review of Amazon’s vast operation — from its interactions with rivals to the way it treats its workers. Similar congressional scrutiny has greeted Facebook chief executive Mark Zuckerberg and Google leader Sundar Pichai, whose inaugural appearances before Congress emboldened some lawmakers and regulators in their attempts to rein in the tech industry.
Members of Congress have been scrutinizing Amazon as part of a wide-ranging probe announced last year that has also explored whether Apple, Facebook, Google and other massive tech companies have become too big and powerful. The panel has issued wide-ranging requests for company records, including communications between Bezos and other Amazon executives. On Friday, though, House investigators said the company has not made “an adequate production in response to this request, and — seven months after the original request — significant gaps remain.”
Many shoppers think of Amazon as a store like most others, acquiring and selling products on its own. But Amazon also has emerged as one of the world’s most powerful marketplaces, running an online bazaar of more than 2.5 million third-party sellers who hawk their products on its platform.
Those sellers sometimes compete with Amazon’s more than 100 private-label brands, ranging from batteries to vitamin supplements, diapers and nicotine gum. To develop its products, Amazon has acknowledged drawing generally on sales data from goods on its site to help determine which markets to target.
Last month, though, the Wall Street Journal reported that Amazon used data from specific product sales from third-party sellers. That was something an Amazon lawyer testified to Congress that the company specifically did not do. In subsequent statements, Amazon said it does not use sellers’ “individual data when we’re making decisions to launch private brands.”
Amazon doesn’t break out the sales of its third-party business in financial documents, but Bezos offered insight in his letter to shareholders last year. In 2018, he wrote, third-party sellers accounted for $160 billion in merchandise sales on the site worldwide, or 58 percent of all physical merchandise sold. Bezos used the data to make the point that third-party sellers can effectively compete against Amazon in the company’s own marketplace.
“Third-party sellers are kicking our first party butt. Badly,” he wrote.
There’s no doubt that Amazon’s massive marketplace has created opportunities for millions of small and midsize retailers globally. But that has also given Amazon enormous clout, because third-party sellers can’t reach as large an audience on rival platforms such as eBay and Etsy.
Some sellers have complained to Cicilline’s committee and to regulators that they have little alternative but to list their items on Amazon if they hope to reach enough online shoppers to have a viable business. That gives Amazon the chance to undercut them on price, critics contend, or introduce similar products based on the copious data it collects.