Amazon’s hometown congresswoman and other lawmakers want federal prosecutors to investigate several Amazon executives accused of lying to Congress during an investigation into the company’s e-commerce platform.
In a letter to Attorney General Merrick Garland sent Wednesday, Rep. Pramila Jayapal, D-Seattle, and other members of the Judiciary Committee accused Amazon of obstructing its 16-month antitrust investigation by refusing to turn over information and lying about how the company treats third-party sellers on its platform.
The committee members say Amazon told Congress it does not use the data it collects from third-party sellers to make its own pricing decisions, but an investigation and several reports over the last few years allege Amazon had looked at data about what other companies were selling on the platform.
In an interview Wednesday, Jayapal said she feels a level of responsibility to hold accountable the company that is based in her backyard.
Lying to members of Congress and using another company’s data to gain a competitive edge hurts Washington residents who shop on Amazon or run businesses that compete with the company for customers, Jayapal said.
“It is simply not OK for any company — in my district or not in my district — to come and testify under oath and lie,” Jayapal said. “We have given [Amazon] numerous opportunities to provide us with corroborating information. They have refused to provide us with corroborating information. The only conclusion is that they lied.”
During the investigation, which was opened in 2019, the House panel’s antitrust subcommittee focused on whether the company used data about its customers to advance the sale of its own private-label products over those of third-party vendors.
In their letter, the lawmakers said Amazon executives, including a lawyer who testified before the committee, repeatedly denied that the company used customer data to harm competition.
But The Wall Street Journal and The Markup reported later that former employees and internal documents revealed that the company used data to give Amazon products an unfair boost over competitors and that the company also used its ranking systems to feature company products over those of third-party sellers.
The lawmakers’ referral reflects mounting bipartisan antitrust scrutiny of Amazon and other large tech companies following the House committee’s 2020 findings that tech giants relied on harmful means to solidify their dominance. Lawmakers from both parties have supported legislation that would prevent tech companies from boosting their own products over those of rivals on platforms they control, like Amazon’s online marketplace.
Tina Pelkey, a spokesperson for Amazon, said in a statement Wednesday that the lawmakers’ concerns were unfounded.
“There’s no factual basis for this, as demonstrated in the huge volume of information we’ve provided over several years of good faith cooperation with this investigation,” she said.
A spokesperson for the Justice Department said the agency had received the letter and was reviewing it.
Jayapal raised concerns about how Amazon uses data from third-party sellers on its platform at the start of its antitrust investigation.
During the company’s initial testimony before the committee in July 2019, she asked directly if Amazon used that information to determine the most popular houseware goods from its competitors, or the brand of size 14 pants that got the most clicks.
“You have this massive trove of data, right, people that are buying products on your platform, and so you’re able to see which are the ones that are doing really, really well,” Jayapal said during the hearing. “Do you track that and then do you create products that directly compete with those most popular brands that are out there?”
Nate Sutton, Amazon’s associate general counsel for competition, said that type of data, “like much retail data,” is public, but that Amazon did not use specific seller data when creating its own products.
Jayapal asked again in July 2020 if Amazon had ever accessed and used “third-party seller data when making business decisions.” This time, the question was directed at then-CEO Jeff Bezos.
Bezos told Jayapal he could not give her a yes or no answer.
“What I can tell you is we have a policy against using seller-specific data to aid our private label business,” he said. “But I can’t guarantee you that that policy has never been violated.”
Over the course of the investigation, Jayapal and other members of the committee also focused on other Amazon executives, including Andy Jassy, who took over as Amazon CEO in July; David Zapolsky, the company’s senior vice president and general counsel; and Jeff Wilke, former CEO of Amazon’s worldwide consumer business.
The committee is asking the Department of Justice to investigate whether Amazon and its executives lied under oath. It’s not clear how long an investigation would take.
In the meantime, Jayapal is working with other federal lawmakers to pass antitrust legislation they hope will hold Big Tech accountable for monopolistic practices and prevent monopolies from engaging in anti-competitive behavior.
If Amazon is using data from third-party sellers to make its own business decisions, that could be keeping other, smaller businesses from getting a shot at selling their own products and it could raise prices for consumers, Jayapal said.
By reviewing other company’s prices, Amazon could sell its own brand at a lower rate, leaving consumers to get “funneled into one product,” she said. “But once all the competition is driven out of the marketplace” the price could shoot up.
For businesses, it opens up the possibility that Amazon could be stealing its data and its product.
Jayapal likened the situation to sports. In this case, she said, Amazon is acting as the referee and a player. It is competing against the other team, but it also gets to make the rules.
“You simply don’t have a shot to play on a level playing field,” she said. A business could “be trying to do everything right … and you’re still not going to be able to play by the same rules as Amazon.”
Amazon’s third-party marketplace has about 2 million sellers, and Amazon has said that more than half the goods sold on Amazon.com come from third-party sellers.
Some independent merchants who sell products on Amazon.com have complained about the company’s practices, such as contract provisions said to prevent them from offering their products at lower prices or on better terms on any other online platform, including their own websites.
Amazon says sellers set their own prices.
Through the course of the investigation, Jayapal has been thinking about antitrust allegations against another Seattle-based tech company: Microsoft.
Under pressure from antitrust regulators in the U.S. and Europe two decades ago, Microsoft helped create an environment where small businesses like Amazon could thrive, she said. Now, Amazon has the chance to do the same.
“I really think Amazon could help in the same way, in fostering a thriving small business community, and can be a part of helping build Seattle’s middle class,” Jayapal said. “They certainly could transform themselves in the way Microsoft did.”
She’s already heard from small businesses over the three-year antitrust investigation that changing Amazon’s practices will only help their chances of survival.
Jayapal said her constituents who work for Amazon have a stake in what could lead to a Justice Department investigation. She said she expects they want to know whether their company is “stonewalling Congress.”
Correction: The name of David Zapolsky, Amazon senior vice president and general counsel, was misspelled in an early version of this story.
This story includes reports from Seattle Times’ wire services.