Citing news reports indicating that Amazon gamed its marketplace to favor its own products, U.S. Rep. Pramila Jayapal of Seattle and four of her colleagues on the House Judiciary Committee are giving the company “a final opportunity” to explain itself before they refer the matter to the U.S. Department of Justice.
The warning was delivered in an Oct. 18 letter to Amazon CEO Andy Jassy (full text below), signed by a bipartisan group of Democratic and Republican legislators. It cites new reporting from both Reuters and The Markup that appeared to directly contradict testimony that company representatives gave to Congress in 2019.
“At best, this reporting confirms that Amazon’s representatives misled the Committee,” the letter says. “At worst, it demonstrates that they may have lied to Congress in possible violation of federal criminal law.”
An Amazon spokesperson denied that any algorithmic favoritism was taking place. “Amazon and its executives did not mislead the committee, and we have denied and sought to correct the record on the inaccurate media articles in question,” the spokesperson said in a statement.
“As we have previously stated, we have an internal policy, which goes beyond that of any other retailer’s policy that we’re aware of, that prohibits the use of individual seller data to develop Amazon private label products.”
A referral to the DOJ could take government investigations of the company to a new level. Amazon has come under local, state and federal scrutiny in recent years regarding its business practices, employee treatment and antitrust.
In testimony and in documents provided to the House Judiciary Committee, Amazon founder and former CEO Jeff Bezos, Associate General Counsel Nate Sutton and David Zapolsky, Amazon’s general counsel, all said no, Amazon doesn’t game the system to favor its own private-label products over those from third-party sellers.
But according to the letter, the investigative reporting clashed with that assertion.
Reuters reported that Amazon created knockoffs products based on seller products and then manipulated search results to boost its own product lines in India.
“As this report notes, these internal documents show a pattern of Amazon, ‘exploiting proprietary data from individual sellers to launch competing products and manipulating search results to increase sales of the company’s own goods,’ ” the lawmakers wrote in the letter.
Referencing The Markup story, the letter focused on the assertion that Amazon “places products from its house brands and products exclusive to the site ahead of those from competitors—even competitors with higher customer ratings and more sales, judging from the volume of reviews.”
An Amazon spokesperson said any such claims are examined internally.
“We investigate any allegations that this policy may have been violated and take appropriate action. In addition, we design our search experience to feature the items customers will want to purchase, regardless of whether they are offered by Amazon or one of our selling partners.”
The letter gave the company a list of questions to answer by Nov. 20, 2021:
- A sworn response to clarify the record as to how Amazon uses non-public individual seller data to develop and market its own line of products;
- A sworn response to clarify the record as to how Amazon advantages its own products over products from other sellers in its search rankings, including through sponsored results that are undisclosed;
- All documents and communications relating to Amazon’s internal inquiry into violations of its Seller Data Protection Policy as detailed in Amazon’s October 4, 2020 letter;
- All documents referred to in the Reuters report entitled “Amazon copied products and rigged search results to promote its own brands, documents show”;
- A response to The Markup report entitled “Amazon Puts Its Own “Brands” First Above Better-Rated Products,” including an explanation as to why Amazon does not publicly label search results for its brand-product listings as advertisements.