House Judiciary Committee Says Amazon Obstructed and Lied to Congress, Seeks Investigation

The House Judiciary Committee has informed Attorney General Merrick Garland of “potentially criminal conduct” on the part of Amazon and its top executives.

Detailed in a 24-page March 9 letter, the Committee says the Amazon representatives “engaged in a pattern and practice of misleading conduct that suggests it was ‘acting with an improper purpose’ ‘to influence, obstruct, or impede’” the Committee’s investigation into competition in the digital markets.

In July 2019 executives from big tech companies testified to the Committee about their business practices. Witnesses included Associate General Counsel Nate Sutton, who was asked by Rep. Pramila Jayapal whether the company used sales data it collects on vendors to create products that directly compete with them, essentially using the sellers’ data against them. Sutton said the company “[do]es not use any of that specific seller data in creating our own private brand products.” Rep. David N. Cicilline asked Sutton to confirm, to which the witness responded, “we don’t use individual seller data to directly compete with them” nor when “making decisions to launch private brands.”

Note Sutton’s wording. He said Amazon didn’t use “specific” or “individual” seller data. Shortly after the hearing, The Capital Forum, based on an interview with a former Amazon worker, reported that Amazon does use the data it gathers from merchants to develop and sell its own products.

Later that month, responding to a request for more information, Amazon General Counsel David Zapolsky confirmed it: The company uses “aggregated store data” and “customer shopping behavior” to inform its private label strategy.

In April 2020, the Wall Street Journal published an article based on interviews with 20 former Amazon employees. The article further corroborated statements and reports that Amazon used third-party sellers’ data precisely how the company’s witnesses said the company did not.

In July 2020, again responding to a question from Rep. Jayapal, Amazon CEO Jeffrey Bezos himself said he couldn’t say “yes or no” to Jayapal’s question about whether Amazon used third-party seller in such a way. He responded that Amazon has a policy against it, but that he “can’t guarantee … that the policy has never been violated.” Asked about the Wall Street Journal article, Bezos said the company was looking “very carefully” into potential violations of Amazon policy on the part of employees.

The Committee has since given Amazon the opportunity to corroborate its claims or correct the record, but the company responded that it would not provide internal documents to the Committee, citing attorney-client privilege. This prompted the Committee’s letter to AG Garland, saying: “[i]nstead of taking advantage of this opportunity to provide clarity …. Amazon offered conclusory denials of adverse facts.”

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