Demand answers..

Democrats demand answers on whether Amazon 'lied' about data tactics

"Amazon needs to explain why it misled Congress," Sen. Elizabeth Warren said.

By CRISTIANO LIMA

Amazon's antitrust problems deepened in Washington on Thursday as lawmakers and advocacy groups alleged that the online retailing giant may have lied to Congress about the tactics it employs against rival sellers on its platform.

Sen. Elizabeth Warren (D-Mass.) and other prominent big tech critics seized on a Wall Street Journal report that said Amazon employees have used information collected from third-party sellers to launch competing products — even though the company testified to the House Judiciary Committee in July that it does not.

“This is exactly what happens when you let a giant company be both the umpire and a player in the game,” Warren said in a statement. “Amazon needs to explain why it misled Congress — and we need to break up Amazon and big tech.”

Amazon disputed the accuracy of the Journal's account and said it did not offer "intentionally misleading" testimony, but said it would conduct an internal investigation into the report.

The committee's leaders vowed Thursday evening to press the company for answers.

"At best, Amazon’s witness appears to have misrepresented key aspects of Amazon’s business practices while omitting important details in response to pointed questioning," said Rep. David Cicilline (D-R.I.), chairman of House Judiciary's antitrust subcommittee. "At worst, the witness Amazon sent to speak on its behalf may have lied to Congress.”

Judiciary Chairman Jerry Nadler (D-N.Y.) said the panel plans "to seek clarification from Amazon in short order, in light of this troubling report."

The Journal's story, based on documents and interviews with former workers, said Amazon employees “have used data about independent sellers on the company’s platform to develop competing products,” even though that goes against both the company’s stated policies and past pledges by its executives. The revelation immediately reignited long-standing concerns, previously expressed by regulators in Europe, that Amazon has used the vast reams of data it collects from third parties on its marketplace to unfairly benefit its own business.

The report comes as big tech companies increasingly face accusations of abuses of power ranging from predatory pricing to failing to protect user privacy. While Amazon has become a key supplier to homebound Americans during the coronavirus pandemic, the outbreak has also increased scrutiny of the company's worker safety conditions and the way it presents third-party products on its website.

At a hearing on antitrust concerns in July, Amazon associate general counsel Nate Sutton testified before Cicilline's subcommittee that the company does not "use individual seller data to directly compete with them.” Sutton’s testimony at the hearing later drew scrutiny from Cicilline, who questioned the veracity of his remarks regarding third-party sellers.

Amazon said Thursday in a statement that it prohibits “employees from using non-public, seller-specific data to determine which private label products to launch.”

“While we don’t believe these claims are accurate, we take these allegations very seriously and have launched an internal investigation,” the statement said.

The company also rejected Warren's characterization of its statements to Congress.

"It’s simply incorrect to say that Amazon was intentionally misleading in our testimony," Amazon spokesperson Maxine Tagay said.

But the Journal's report quickly prompted condemnation from an array of antitrust hawks.

“The Committee should make a criminal referral for perjury, and the Department of Justice should investigate what Mr. Sutton knew and when he knew it," said Sarah Miller, executive director for the American Economic Liberties Project, a group that champions more stringent antitrust enforcement.

“The House Judiciary Committee needs to call Jeff Bezos to testify,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance.

Sen. Mike Lee (R-Utah), the libertarian-leaning chairman of the Senate Judiciary antitrust subcommittee, said in a statement that he expects the DOJ and the FTC to look into the allegations as part of their ongoing tech investigations.

Sen. Richard Blumenthal (D-Conn.), who sits on the subcommittee, joined Warren in accusing Amazon of misleading Congress, calling the Journal's revelation "damning" proof that Amazon has been "blatantly exploiting third-party sellers."

Warren last year called for Amazon and other tech giants to be broken up as part of her presidential campaign platform. She said she wanted to roll back Amazon's acquisition of Whole Foods and split apart business arms like Amazon Marketplace and AmazonBasics.