By Dana Mattioli and Ryan Tracy
Lawmakers on the House Judiciary Committee called on Amazon.com
Inc. Chairman and CEO Jeff Bezos to testify on its private-label
practices, citing a Wall Street Journal investigation that found
Amazon employees used data about independent sellers on its
platform to develop competing products.
The House panel has been investigating the market power of
Amazon and other large technology firms.
"On April 23, the Wall Street Journal reported that Amazon
employees used sensitive business information from third-party
sellers on its platform to develop competing products," lawmakers
from both parties said in a letter to Mr. Bezos on Friday. "The
report was based on interviews with over 20 former or current
Amazon employees and the company's internal documents."
"If these allegations are true, then Amazon exploited its role
as the largest online marketplace in the U.S. to appropriate the
sensitive commercial data of individual marketplace sellers and
then used that data to compete directly with those sellers," the
letter said.
Testimony by Mr. Bezos would give lawmakers a public forum to
interrogate him on the private-label practices as well as other
subjects. Bipartisan concerns about the company stretch across a
range of issues, from its market power and its impact on small
businesses to the safety of its workers and sales of counterfeit
products on its platforms.
Amazon has been providing documents to the House panel, but has
resisted the idea of Mr. Bezos personally testifying, according to
a person familiar with the matter. Amazon has said it is
cooperating with lawmakers.
Amazon didn't immediately have comment on the House request.
The online giant has launched an internal investigation
following the Journal's report, and the company said employees
using such data to inform private-label decisions would be
violating its policies. In response to previous antitrust scrutiny,
Amazon has said it follows all laws and has emphasized that it
accounts for less than 4% of the U.S. retail market.
After the Journal report, Sen. Josh Hawley (R., Mo.) pushed the
Justice Department to open a criminal antitrust investigation into
the company.
Last week, Democrats on the judiciary panel questioned whether
Amazon misled Congress in sworn testimony from July. At the time,
an Amazon associate general counsel told Congress: "We don't use
individual seller data directly to compete" with businesses on the
company's platform.
Amazon will have difficulty refusing the lawmakers' request that
Mr. Bezos testify. The judiciary committee has subpoena power,
which the committee's chair, Rep. Jerrold Nadler (D., N.Y.) can
exercise unilaterally even if other members of the panel don't
agree.
"Although we expect that you will testify on a voluntary basis,
we reserve the right to resort to compulsory process if necessary,"
said the letter from Mr. Nadler and six others -- including Reps.
David Cicilline (D., R.I.) and Jim Sensenbrenner (R., Wis.), the
top members of the judiciary panel's subcommittee on antitrust
issues.
The timing of a future hearing isn't clear and will be
complicated by the coronavirus pandemic. Congressional committees
haven't held in-person hearings since mid-March. This week the
House Sergeant at Arms extended until at least May 16 restrictions
on access to the House's office buildings, where hearing rooms are
located.
Mr. Bezos is a regular presence in the nation's capital, just
not typically a public one. He owns the Washington Post and has a
mansion in northwest Washington, and Amazon is a major government
contractor.
The House panel has been investigating the market power of
Amazon and other technology giants since last summer, asking the
company to turn over reams of documents that included some of Mr.
Bezos' emails. Amazon has joined other firms in turning over
millions of pages of documents, officials said, though the nature
of those documents hasn't been made public.
Lawmakers said on Friday Amazon hasn't fully responded to
requests for information about its relationship to sellers. "Seven
months after the original request -- significant gaps remain," the
letter said.
Mr. Bezos might receive a more welcoming reception in some
quarters. After an Amazon executive finished testifying before the
House panel last summer, Rep. Kelly Armstrong (R., N.D.) told a
second panel of witnesses about the benefits of e-commerce. "At no
point in time, from my house in Dickinson, N.D., have I had more
access to more diverse and cheap consumer products," he said.
Mr. Bezos founded Amazon in his home garage in 1994 and has
since grown it into one of the world's biggest companies. As of
Friday morning, Amazon had a $1.2 trillion market capitalization.
Its size -- and role operating a marketplace while competing with
it -- has drawn the attention of regulators.
The Amazon chief executive has a contentious relationship with
President Trump, who has criticized Mr. Bezos for what the
president called unfavorable coverage in the Washington Post. The
Post has said its coverage is independent of Mr. Bezos. Amazon also
has contended that it lost out on a Pentagon cloud-computing
contract worth as much as $10 billion to Microsoft Corp. because of
improper pressure from Mr. Trump. A Pentagon inspector general
report released last month concluded that available evidence
suggests Microsoft's selection last year didn't appear to stem from
White House pressure.
Earlier this week, the U.S. trade representative's office put
Amazon's web domains in Canada, France, Germany, India and the U.K.
on its "notorious markets" list of platforms that are believed to
facilitate intellectual-property violations. Amazon said the action
was politically motivated by the Trump administration.
Write to Dana Mattioli at dana.mattioli@wsj.com and Ryan Tracy
at ryan.tracy@wsj.com
(END) Dow Jones Newswires
May 01, 2020 12:40 ET (16:40 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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