Amazon

In Probe Over Third-Party Info, Amazon Says 'Appropriate' Exec To Testify

Amazon will cut commission rates

Amazon says it plans to send an "appropriate" executive to testify before Congress about how the company uses third-party data,  after the U.S. House of Representatives Judiciary Committee requested CEO Jeff Bezos to appear, Reuters reported.

The eCommerce titan has faced allegations that it used its third-party sellers’ data to create competing products, as reported by The Wall Street Journal (WSJ) on April 23. A letter signed by both Democratic and Republican members of Congress said Amazon’s business practices, if true, “appear to be misleading, and possibly criminally false or perjurious,” Reuters reported

A blog post from Amazon said the company has “been working with the Committee in good faith for nearly a year to provide answers and information, and we remain prepared to make the appropriate Amazon executive available to the Committee to address these issues.”

Amazon’s associate general counsel, Nate Sutton, denied last summer that the company has taken data from third parties for its own purposes, Reuters reported. And the company has said in a letter to Congress on May 1 that any allegations of a policy breach would be investigated.

The WSJ report, based on information from more 20 former Amazon employees and some internal documents, said that the company would allegedly use data from third-party sellers, such as a trunk organizer from a car-trunk manufacturer called Fortem, to gauge the prices of the product, how much was spent on advertising and other data points.

In the case of Fortem, Amazon employees interviewed by WSJ said that the point of looking at how much the third-party seller made could help them estimate how an Amazon brand of the same type of product could potentially make more money. Amazon launched its own trunk organizer in October 2019 under its AmazonBasics private label brand.

The allegations against Amazon also go back to the general argument made by antitrust experts, which is that companies like Amazon and others of its size have the potential to step on smaller rivals due to the outsized influence they have in the market.

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