When Jeff Bezos appears before a committee of members of the United States Congress on Wednesday for an antitrust hearing, it will be the first on several fronts – the first time that Amazon’s founder and CEO will testify before Congress. The first time Bezos will have to publicly respond to a damaging report alleging that Amazon uses data it collects from its own merchants to compete against them, something the company has told Congress it does not do. And the first time in a long time that the world’s richest man will be subjected to an extensive and critical line of questioning in a public setting.
A long time ago.
Bezos is expected to appear, via video conference due to Covid-19, along with three other creators of the digital economy: Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg, and Sundar Pichai, Google CEO. and its parent company, Alphabet. For the past year, the House antitrust subcommittee, a bipartisan group of 15 lawmakers, has been investigating the dominance of these tech giants to determine if they are abusing their power. And, if so, whether regulators are simply not effectively enforcing current antitrust laws, or whether Congress needs to create new competition laws. After all, the US federal antitrust law was created more than a century ago, many decades before the Internet laid the groundwork for some industry titans to accumulate unprecedented power.
The subcommittee leader, Representative David Cicilline of Rhode Island, said from the start that he wanted to hear from these CEOs before he and his colleagues close the investigation with a final report that summarizes their findings and makes recommendations. The committee cannot accuse companies of antitrust violations or divide them in any way. But lawmakers can recommend additions to the existing antitrust law or suggest that new laws be created. The committee’s investigation, and the resulting final report, could also apply pressure to antitrust regulators at the Federal Trade Commission and the Justice Department to more aggressively enforce current laws to curb companies.
Because the audience will be virtual, it probably won’t air the drama of other Capitol Hill-packed hearings involving tech leaders, such as Zuckerberg’s Facebook data privacy hearings in 2018 in front of almost the entire U.S. Senate. But for Bezos and Amazon critics, this is still a great time. The Amazon CEO is the only one of the four CEOs who has not had to face questions from Congress before. Cook testified at a US Senate hearing in 2013 to defend Apple’s strategies to minimize tax liability. Zuckerberg has testified before Congress on several occasions, on topics ranging from data privacy to political publicity. And Pichai appeared in front of the House Judiciary Committee in 2018, as lawmakers questioned him on topics ranging from allegations that the company had an anti-conservative bias to his possible plans to launch a search engine in China that would have allowed his government censor search results.
One likely reason Bezos hasn’t appeared before: Amazon, for the most part, has been a good thing for millions of online shoppers. It offers shoppers incredible convenience, good prices, fast delivery and a wide selection. How many of the members of these members of Congress have a problem with that, especially in the US, where antitrust agents often favor companies that treat consumers well? Instead, these executors generally target commercial practices or mergers that they believe will harm consumers, such as raising the prices of a product or service.
But the problem for Amazon and Bezos is that the company has grown tremendously and expanded into so many different industries, from online retail to cloud computing, supermarkets, and more, that their businesses affect their customers and millions. of people. other Americans in many other ways. Some of these people make a living running small businesses as outside vendors in the Amazon marketplace. They face increasing competition from Amazon, which sets all the rules and frequently changes its policies and algorithms that power its platform so that they can make or break their business.
Others affected by Amazon’s policies work in Amazon warehouses and delivery centers, earning pay and benefit rates that are often higher than those offered by retail competitors, but some of these workers say they are being asked to achieve the performance marks that some say are more suited to robots than humans. And then there are Amazon’s competitors, large and small in a growing number of industries, that have been crushed in the wake of the tech giant. When it comes to online retail, the pandemic has only accelerated the trend for online shopping and has given Amazon a new edge over many of its traditional retail competitors.
The increased media scrutiny of these issues is one of the reasons why this time has finally come. Amazon’s market capitalization ($ 1.5 billion) and Bezos’ staggering personal wealth ($ 184 billion) have likely played a role, too. And then there is Lina Khan, an antitrust scholar who wrote “The Amazon Antitrust Paradox,” a widely read legal document that argued that current antitrust doctrine is not adequate to control internet giants like Amazon. Khan is now an attorney on the antitrust subcommittee in Congress.
Despite this growing scrutiny from politicians and the public, the Bezos company has openly flaunted its power in recent years. In its hometown of Seattle, Amazon successfully struck down a proposed payroll tax to combat homelessness by threatening to halt construction of its massive new Seattle headquarters, which would have spurred business activity in the downtown neighborhood. city. Later, the company invested funds in a local Seattle election to try to defeat the politicians who supported the payroll tax. He also clashed with his representative from the United States House of Representatives, Pramila Jayapal, in a puzzling move that has cemented his critical status of the company, while also part of the antitrust subcommittee investigating the company.
In 2017, Amazon used its plan to build a second company headquarters, called HQ2, to invite hundreds of U.S. municipalities to compete with each other to offer tax cuts to incentivize them to move to their cities. After choosing New York City as one of HQ2’s two chosen locations and earning $ 3 billion in incentives, Amazon abruptly canceled its plans instead of negotiating with locals who criticized the measure.
On the labor front, the company, which is the country’s second largest private sector employer after Walmart, has alarmed some elected officials, including New York State Attorney General Letitia James, and US Democratic senators like Elizabeth Warren. and Cory Booker, who have investigated or asked about the company’s practices. During the pandemic, Amazon fired at least six of its own employees who protested warehouse conditions during the health crisis or spoke about the company’s treatment of workers. (Amazon has said they were all fired for violating company policies and not for their dissent.)
And in its core retail business, the company has continued to promote its own branded products on Amazon in questionable ways, despite the fact that this type of competition with its own sellers is at the center of the antitrust subcommittee’s concerns. It didn’t help when the Wall Street Journal released a report in April citing former Amazon employees who say the company has used data to compete against its own sellers in a way that a company attorney previously said in congressional testimony did not happen. within the company.
For these reasons, among others, Bezos’ time to respond to Congress is finally here. The company affects tens of millions of people in the United States in multiple ways. And it has generated even more workforce and labor during the pandemic, as physical stores close their doors temporarily or permanently, and more and more shoppers get their dollars from online purchases.
Bezos has said in the past that all major institutions deserve scrutiny and that Amazon appreciates it.
“I say, ‘Look, we are a big corporation. We deserve to be inspected. It will happen. Don’t take it personally, “said Bezos in 2018.” Because when you take it personally, you start doing things that are counterproductive. “
“There is only one way to handle it,” he added, “and that is that we have to behave in such a way that when they analyze us, we pass with great success.”
On Wednesday, Bezos will have to do just that.
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