SEC Eyes Amazon Prime Data

Amazon has reportedly refused to disclose information about Prime memberships to the U.S. Securities and Exchange Commission (SEC) after it was asked to do so.

Earlier this year, the online giant said memberships in Prime, the company’s flagship subscription program, had reached more than 100 million accounts around the world. That number didn’t include specifics about revenue, however, and many investors wondered how much Prime was helping (or not helping) the company. Specifically, the SEC asked Amazon to disclose the percentage of sales it could attribute to Prime members.

Amazon said it wasn’t important and that it didn’t think sales to Prime customers was useful information, and that Prime was only one element of its business.

The SEC didn’t force the issue, but said it will continue to pursue the broader issue of how companies disclose revenue in 2019 — and may, at one point, insist they answer. The issue stems from a new accounting rule that came into effect this year, which asks what products, sales methods or locations are pushing a company’s profit.

Other companies have been asked similar questions by the SEC as well. In June, the SEC asked PACCAR about revenue in terms of its fleet customers, since the company talked about it on a conference call and in its filings. The company said it didn’t want to disclose that information because that’s not how it managed its business.

Ford was questioned in August 2017 about why it reported vehicle revenue for its parts and accessories. The company said the two categories were similar, but declined to comment on the issue further.

The SEC also asked Alphabet, Google’s parent company, to disclose the revenue it gets from YouTube. Alphabet declined. The SEC discussed the issue with the companies, then said it was done and that the matter was closed. The SEC said it won’t be too harsh on companies at first because they need time to adapt to the new rule.


Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. In the November 2019 Mobile Order-Ahead Report, PYMNTS talks with Dan Wheeler, Wahlburgers’ SVP, on how the QSR balances security and seamlessness to secure its recently launched WahlClub loyalty program.