During Wednesday’s antitrust hearing, Amazon and its CEO Jeff Bezos were criticized by lawmakers for the company’s alleged use of third-party vendor data in developing its own products.
At the beginning of this year, the Wall street journal They reported that Amazon employees have accessed sales data from independent sellers in their market to help the company develop competitive products for its private label. Amazon has a policy that prohibits the practice, but lawmakers like Representative Pramila Jayapal (D-WA) focused 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.
Bezos highlighted the company’s policy prohibiting the practice, but said: “I cannot guarantee that that policy has never been violated.” He continued: “We continue to analyze it very carefully. I’m still not satisfied with getting to the bottom, and we’ll keep looking at it. It is not as easy to do as you might think because some of the sources in the article are anonymous. “
Before diaryThe report came out, Amazon had told Congress it doesn’t have access to sales data to help guide the launch of its own products. “Our incentive is to help the seller succeed because we trust them,” Nate Sutton, Amazon’s associate general counsel, said at a hearing last July. “They have many options. Therefore, we apply the same criteria to both and do not use their individual data when making decisions to launch private labels. “
Documents from the audience on “Online Platforms and Market Power: Examination of the domain of Amazon, Apple, Facebook and Google” pic.twitter.com/Ypvxhm7asA
– Judicial Dems of the Chamber (@HouseJudiciary) July 29, 2020
Antitrust activists have 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 landmark 2017 law review article, antitrust scholar Lina Khan described it as a classic example of infrastructure discrimination, writing: “Amazon itself effectively controls the infrastructure of the Internet economy.”
Still, Jayapal cited documents obtained and interviews conducted during the committee’s investigation that question Amazon’s ability to enforce its policies against vendor data theft. “The committee has interviewed employees who say that these violations often occur,” said Jayapal.
Collecting aggregated data is allowed per Amazon’s policies, only it’s not vendor-specific data. Still, Jayapal argued that the aggregated data could provide Amazon with “detailed data” on specific product categories.
“So you can set the rules of the game for your competitors, but not follow those same rules by yourself,” said Jayapal.
Bezos also caught fire with Rep. Lucy McBath (D-GA) over Amazon’s ability to “systematically block” sellers from selling specific products, citing direct testimony from a seller who she believed had been blocked.
“I don’t think that is systematically what is happening,” Bezos said. “Third-party sellers as a whole are doing extremely well on Amazon.”
