Jeff Bezos has built a commercial empire, a rocket company and a 10,000-year clock in a Texas mountain, but he’s never testified before Congress, until today.
The Amazon founder and CEO is scheduled to appear before a House Judiciary antitrust subcommittee Wednesday, alongside fellow tech CEOs Tim Cook of Apple, Mark Zuckerberg of Facebook and Sundar Pichai of Google parent company Alphabet. Their testimony is part of an investigation into the outsize market power of these ubiquitous digital marketplaces and platforms.
Bezos, in an opening statement submitted to the subcommittee and posted online Tuesday evening, says Amazon has always been open to criticism, provided it agrees with its critics. (All four executives’ opening statements are available here.)
“When we think our critics are right, we change. When we make mistakes, we apologize. But when you look in the mirror, assess the criticism, and still believe you’re doing the right thing, no force in the world should be able to move you,” Bezos says.
The tech bosses are expected to testify remotely, perhaps sapping some of the drama that would otherwise accompany this historic reckoning. The hearing, which begins at 9 a.m. Pacific time, will be viewable on Alphabet-owned YouTube.
Bezos says Amazon’s share of the U.S. retail market stands at less than 4%. And while Amazon controls some 38.7% of U.S. e-commerce sales, according to eMarketer’s 2020 estimate, Bezos dismisses the notion that there is a separate online market anymore. He notes the company’s competition with Target, Costco, QFC and Fred Meyer parent Kroger, Walmart, Shopify and Instacart.
“[W]e and all other stores are acutely aware that, regardless of how the best features of ‘online’ and ‘physical’ stores are combined, we are all competing for and serving the same customers,” he says.
Bezos touts the third-party sellers that since 1999 have used Amazon’s online marketplace to reach customers and account for about 60% of physical products sold on the site. They now number more than 1.7 million businesses, and many have no ready way to reach customers without the online marketplace Bezos built.
This is an area where regulators, lawmakers and antitrust experts have focused. Has Amazon used its dominant position to control how third-party sellers price their wares? Does it use data about their sales to develop its own competing private-label products? Has it stifled competition through acquisitions (a question facing all of the companies coming before the subcommittee)?
Bezos’ turn in the congressional spotlight comes amid a global pandemic that has kept people home and made online retail more essential than ever. Amazon’s stock, and Bezos’ wealth, have surged amid historic levels of unemployment and business failures across the economy.
Bezos said in his statement that Amazon, through its history, has generated more than $1 trillion of wealth for outside shareholders, who own 80% of the company. Amazon, along with Apple, Microsoft, Facebook and Alphabet, are among the most widely held stocks.
Bezos opened his statement with the story of his parents — Jackie, who had him at 17, and Miguel, his adopted father, sent to the U.S. by his Cuban parents before Fidel Castro came to power — and how they provided the initial startup capital for his fledgling online bookstore in 1994.
He closed with a paean to America’s entrepreneurial climate, despite the country’s imperfections, which are on stark display this year.
“Even as we remember Congressman John Lewis and honor his legacy, we’re in the middle of a much-needed race reckoning,” Bezos said. (Lewis was lying in state at the Capitol on Monday and Tuesday, delaying the hearing.) “We also face the challenges of climate change and income inequality, and we’re stumbling through the crisis of a global pandemic. Still, the rest of the world would love even the tiniest sip of the elixir we have here in the U.S.”
While much of Bezos’ statement will be familiar to readers of his annual shareholder letters, the hearing still holds the possibility of surprises as lawmakers question the world’s richest man, live, for the first time.