House Judiciary Committee Asks: Did Bezos Mislead Us?

Congress has its hands full with witnesses these days. This week, in the case of Big Tech, congressmen have circled back to testimony given by Amazon executives about the e-commerce giant’s use, or non-use, of merchant data in developing and selling its own products.

On Oct. 18, 2021, the House Judiciary Committee sent a letter to Amazon President and Chief Executive Officer Andy Jassy “in response to recent, credible reporting that directly contradicts the sworn testimony and representations of Amazon’s top executives—including former CEO Jeff Bezos—to the Committee about their company’s business practices during our investigation last Congress.”  The Committee asserts that the company “misled” or may even have “lied to Congress in potential violation of federal criminal law.”

The letter, which was signed by Reps. David Cicilline (D-R.I.), Ken Buck (R-Colo.), Pramila Jayapal (D-Wash.), Jerrold Nadler (D-N.Y.) and Matt Gaetz (R-Fla.), notes that under 18 U.S.C. § 1001, it is a federal crime “to knowingly and willfully make statements that are materially false, conceal a material fact, or otherwise provide false documentation in response to a congressional investigation.” Lying under oath and inducing others to do so are also federal crimes under 18 U.S.C. § 1622 and 18 U.S.C. § 1621.

The Committee cites recent articles from Reuters and The Markup (“a nonprofit newsroom that investigates how powerful institutions are using technology to change our society”) alleging that Amazon used data from individual third-party sellers to make “copycat products” and manipulated search results to prioritize its goods over other merchants, even when competitors had higher customer ratings and sales. These allegations were based on “a review of thousands of Amazon’s internal documents, including emails, plans, and strategy papers.”

The reports are consistent with prior investigations by The Wall Street Journal, which in 2020 interviewed over 20 former employees of the company’s private-label business who noted that using data from individual sellers to develop Amazon brand products was “standard operating procedure at the company” and that so-called aggregate data often included data “derived exclusively or almost entirely from one seller.”  In 2019, The Capitol Forum published an interview with a former employee who made similar claims.

This reporting contradicts testimony given to Congress by top Amazon executives in 2019 and 2020, including then-CEO Jeff Bezos, Associate General Counsel Nate Sutton, and Vice-President for Public Policy Brian Huseman. Sutton testified that the company’s search rankings apply the same criteria to Amazon and third-party sellers, algorithms are designed to predict customer preferences “regardless of the seller,” and that Amazon does not use data on individual sellers in its private brand business. In a post-hearing letter, Amazon General Counsel David Zapolsky made similar representations.

On July 29, 2020, Jeff Bezos, then-CEO of Amazon, testified that the company enforced a policy against using seller-specific data to develop its private brand products, but noted that for this policy, data is considered “aggregate” if it comes from more than a single seller. A few months later, Huseman provided a summary of an internal investigation following reports of the company’s abuse of seller data where he noted that the company does not allow its private brand employees to look at data on sales from a single seller.

The Committee letter requests that, by Nov. 1, 2021, Amazon provide sworn responses to clarify the record on how the company “uses non-public individual seller data to develop and market its own line of products” as well as how it “advantages its own products over products from other sellers in its search rankings [.]” The letter further requests documents and communications relating to the company’s internal investigation regarding violations of the Seller Data Protection Act, the documents referenced in the Reuters report title “Amazon copied products and rigged search results to promote its own brands, documents show;” and a response to The Markup report entitled “Amazon Puts Its Own “Brands” First Above Better-Rated Products,” including an explanation for “why Amazon does not publicly label search results for its brand-product listings as advertisements.”

Edited for MoginRubin by Tom Hagy and Yamile Nesrala, J.D.

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