Amazon Lied to Congress? Lawmakers Allege Misleading Practices

Amazon Executives Accused of Misleading Congress

Five members of the House Judiciary Committee have formally accused Amazon’s leadership of either providing misleading information or outright falsehoods regarding the company’s operational practices. They are currently evaluating the possibility of launching a formal investigation, prompted by the release of two critical reports last week.

Reports Detail Amazon's Practices

Recent investigations by Reuters and The Markup revealed that Amazon leverages data collected from third-party sellers on its marketplace. This data is then utilized to develop and promote Amazon’s own private-label products. Furthermore, these reports indicate that Amazon prioritizes its own brands in search results, disadvantaging competing sellers.

A Final Opportunity for Clarification

A letter addressed to Amazon’s CEO, Andy Jassy, offers him “a final opportunity to provide evidence that supports previous testimony and statements made to the Committee.” This request seeks to clarify potential discrepancies and ensure the accuracy of information provided.

Potential Criminal Investigation

The lawmakers are also considering whether to request the Department of Justice to initiate a criminal investigation into the matter. This escalation underscores the seriousness of the allegations.

The letter explicitly states, “We strongly encourage you to utilize this opportunity to rectify the record and furnish the Committee with sworn, truthful, and accurate responses. This is crucial as we deliberate whether a referral to the Department of Justice for criminal investigation is warranted.”

Contradiction of Prior Testimony

The letter, signed by Representatives Pramila Jayapal, David Cicilline, Ken Buck, Jerrold Nadler, and Matt Gaetz, asserts that recent reporting “directly contradicts the sworn testimony and representations of Amazon’s top executives – including former CEO Jeffrey Bezos.”

Bezos' Testimony Under Scrutiny

During a previous antitrust hearing before the U.S. House of Representatives, Bezos offered a non-committal response when questioned about these practices.

He stated at the time, “We do have certain safeguards in place. We train people and expect adherence to policy.” However, he conceded that he “couldn’t guarantee you that policy has never been violated.”

Amazon Denies Wrongdoing

Amazon maintains that it has not “mislead the committee” and has actively refuted what it deems inaccurate reporting. The company has attempted to correct the record regarding the media articles in question.

Growing Criticism

Despite these denials, increasing scrutiny suggests a lack of confidence in the company’s claims. Last week, Senator Elizabeth Warren publicly advocated for the breakup of Amazon.

Systematic Campaign in India

The Reuters report, based on an analysis of thousands of internal Amazon documents, alleges that Amazon engaged in “a systematic campaign of creating knockoffs and manipulating search results to boost its own private brands in India.”

The report characterizes this as a deliberate and formalized strategy within Amazon. The lawmakers’ letter notes that these findings align with previous investigations.

Replicating Successful Products

“In one instance, Amazon duplicated a popular shirt brand, meticulously copying its measurements – even down to the neck circumference and sleeve length – and then collaborated with the original manufacturer to produce a comparable version. As an internal Amazon document revealed, ‘It is difficult to develop this expertise across products and hence, to ensure that we are able to fully match quality with our reference product, we decided to only partner with the manufacturers of our reference product,’” the letter details, referencing the Reuters report.

Condemnation from Indian Startups

ADIF, an organization representing over 300 startups and entrepreneurs in India, strongly condemned Amazon last week for its “predatory platform of copying, rigging, and killing Indian brands.” They have urged the Indian government to intervene.