During Wednesday’s antitrust hearing, Amazon and its CEO Jeff Bezos came under fire by lawmakers over the company’s alleged use of third-party seller data in developing its own products.
Earlier this year, The Wall Street Journal reported that Amazon employees have accessed sales data from independent sellers on its marketplace to help the company develop competing products for its private-label. Amazon has a policy barring the practice, but lawmakers like Rep. Pramila Jayapal (D-WA) focused in on the company’s enforcement of that policy.
“Let me ask you, Mr. Bezos, does Amazon ever access and use seller data when making business decisions?” Jayapal asked.
“I can’t guarantee you that that policy has never been violated.”
Bezos highlighted the company’s policy banning the practice, but said, “I can’t guarantee you that that policy has never been violated.” He continued, “We continue to look into that very carefully. I’m not yet satisfied that we’ve gotten to the bottom of it, and we’re going to keep looking at it. It’s not as easy to do as you would think because some of the sources in the article are anonymous.”
Before the Journal’s report came out, Amazon had told Congress that it doesn’t access sales data to help guide the launch of its own products. “Our incentive is to help the seller succeed because we rely on them,” Nate Sutton, Amazon’s associate general counsel, said at a hearing last July. “They have many options. So we apply the same criteria to both and we do not use their individual data when we’re making decisions to launch private brands.”
Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/Ypvxhm7asA
— House Judiciary Dems (@HouseJudiciary) July 29, 2020
Antitrust activists have long been concerned about Amazon’s power over independent sellers on its platform and how it could use that power to launch competing products. In a pivotal 2017 law review article, antitrust scholar Lina Khan described it as a classic example of discrimination in infrastructure, writing, “Amazon itself effectively controls the infrastructure of the internet economy.”
Still, Jayapal cited documents obtained and interviews conducted over the committee’s investigation that call into question Amazon’s ability to enforce its policies against tapping seller data. “The committee has interviewed employees that say these breaches typically occur,” Jayapal said.
The collection of aggregate data is allowed under Amazon’s policies, just not specific seller data. Still, Jayapal argued that aggregate data could still provide Amazon with “detailed data” on specific product categories.
“So you can set the rules of the game for your competitors, but not actually follow those same rules for yourself,” Jayapal said.
Bezos also caught fire from Rep. Lucy McBath (D-GA) over Amazon’s ability to “systematically block” sellers from selling specific products, citing direct testimony from a seller who believed she had been blocked.
“I do not think that’s systematically what’s going on,” Bezos said. “Third-party sellers in aggregate are doing extremely well on Amazon.”