House lawmakers leading an antitrust investigation into Amazon demanded Friday that CEO Jeff Bezos testify about the company’s alleged practice of gleaning financial information from third-party sellers to bolster its own private label business.
The House Judiciary Committee threatened to subpoena Bezos if he does not voluntarily agree to testify.
Amazon’s stock fell after the announcement.
The letter comes after a Wall Street Journal investigation found that Amazon employees in the company’s private label business had routinely used data from third-party sellers to inform its own product strategy — a practice that the company has consistently denied to Congress.
Amazon’s associate general counsel, Nate Sutton, said in a July hearing on the company’s practices that “we do not use any seller data to compete with them.” He also told Rep. David Cicilline, D-R.I., chair of the House antitrust subcommittee, in the same hearing that “we do not use their individual data when we’re making decisions to launch private brands.” Amazon has also submitted numerous written responses to the same effect to the committee.
“If the reporting in The Wall Street Journal article is accurate, then statements Amazon made to the Committee about the company’s business practices appear to be misleading, and possibly criminally false or perjurious,” said the House Judiciary Committee in its letter.
At the center of the controversy over its anticompetitive behavior is its role as both marketplace owner and competitor. Amazon’s third-party sellers make up 58 percent of sales on the company’s platform. Many of these sellers create their own private label products to sell on the platform. But the dynamic between third-party sellers and Amazon is what some critics have called a “frenemy” relationship where sellers may enjoy business success but also worry about the amount of information the company can see.
The company has faced escalating scrutiny over the last year as lawmakers and regulators question the size and influence of the country’s biggest tech companies — Facebook, Amazon, Google and Apple. In addition to the House antitrust subcommittee investigation, Amazon also faces a probe by the Federal Trade Commission.
Amazon did not immediately respond to a request for comment.