Jeff Bezos still doesn’t have a good answer to what might be the strongest antitrust claim facing Amazon. During a marathon hearing that at times veered wildly off topic, one of the biggest admissions came from the Amazon CEO who admitted that he “can’t guarantee” the online retailer hasn’t misused data from third-party sellers on its platform.
The issue is at the heart of antitrust investigations into the company on two continents. Yet Bezos offered little to counter the claims that Amazon has unfairly used the data it collects from third-party sellers to inform the products it sells under its own brands, like Amazon Basics. Merchants have long alleged that Amazon uses its vast data troves to undercut some of the most successful sellers by offering its own competing products.
A Wall Street Journal report in April offered an in-depth look at this practice. The investigation found that while Amazon has policies that bar employees from looking at data from individual sellers, the rules are easy to circumvent and not always enforced. One source told the WSJ that “managers sometimes would ask an Amazon business analyst to create reports featuring the information” they wouldn’t otherwise be able to access.
Amazon's Assoc. General Counsel told me under oath that Amazon does NOT, “use any specific seller data when creating its own private brand product.”
Reports revealed that was a lie: that they DO access data on third party sellers.
So I just asked Jeff Bezos which it is. Watch: pic.twitter.com/MiR7NHI7Y8
— Rep. Pramila Jayapal (@RepJayapal) July 29, 2020
Some of these claims were backed up by at least one former Amazon employee who spoke to the antitrust subcommittee, according to Washington Rep. Pramila Jayapal, who read a quote from the unnamed individual while questioning Bezos. “There’s a rule but there’s nobody enforcing or spot checking they just say ‘don’t help yourself to the data,’ she said. “It’s a candy shop, anyone can have access to anything they want.”
It was during Jayapal’s questioning that Bezos admitted that he “can’t guarantee you that policy has never been violated.”
“We have a policy against using seller-specific data to aid our private label business, but I can’t guarantee you that policy has never been violated,” he said. “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 into it.”
The issue has also drawn the scrutiny of European regulators, who opened an antitrust investigation into Amazon last year. “Based on the Commission's preliminary fact-finding, Amazon appears to use competitively sensitive information – about marketplace sellers, their products and transactions on the marketplace,” the European Commission (EC) wrote in a statement at the time.
The Wall Street Journal reported in June that the EC plans to file charges against the retailer.
Amazon’s use of third-party seller data wasn’t the only issue Bezos took heat on. He was also grilled on what the company does to stop those who sell stolen or counterfeit goods (not nearly enough, according to lawmakers).
And, like Facebook’s Mark Zuckerberg, Bezos was asked about one of his company’s acquisitions. Lawmakers published internal documents showing Amazon’s aggressive strategy to undercut online retailer diapers.com “no matter what the cost.” Amazon eventually acquired the company in 2010.