During Wednesday’s antitrust hearing, Amazon and its CEO Jeff Bezos came under fire from lawmakers over the company’s alleged use of third-party retailer data in the development of its own products.
Earlier this year, The Wall Street Journal reported that Amazon employees accessed sales data from independent vendors in its market to help the company develop competing products for its private label. Amazon has a policy that bans the practice, but lawmakers like Rep. Pramila Jayapal (D-WA) focused on the company’s enforcement of that policy.
“Let me ask you, Mr. Bezos, does Amazon ever access and use seller data when making business decisions?”; Asked Jayapal.
Bezos stressed the company’s policy of banning the practice, but said, “I cannot guarantee that policy has never been violated.” He continued, “We continue to look at this with great care. I am still not satisfied that we have reached its bottom, and we will continue to look at it. Not as easy to do as you think because some sources in the article are anonymous. “
Before the JournalThe report came out, Amazon told Congress it doesn’t have access to sales data to help guide the launch of its own products. “Our incentive is to help the seller succeed because we rely on them,” Nate Sutton, Amazon’s associate attorney general, said at a hearing last July. “They have a lot of options. So we apply the same criteria to both and we don’t use their individual data when we make decisions to launch private labels.”
Hearing Papers on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/Ypvxhm7asA
– Dems House Judiciary (@HouseJudiciary) July 29, 2020
Antitrust activists have long been concerned about Amazon’s power over independent sellers on its platform and how you can use that power to launch competing products. In the main article of the 2017 law review, antitrust scholar Lina Khan described it as a classic example of infrastructure discrimination, writing, “Amazon itself effectively controls the infrastructure of the economy. -internet. “
Still, Jayapal cited the documents obtained and the interviews conducted during the committee’s investigation questioning Amazon’s ability to enforce its policies against tapping seller data. “The committee interviewed employees who say this breach typically occurs,” Jayapal said.
The collection of aggregate data is permitted under Amazon policies, and not just seller-specific data. Still, Jayapal argued that aggregate data could still provide Amazon with “detailed data” about specific product categories.
“So you can set the rules of the game for your competitors, but you don’t actually follow the same rules for yourself,” Jayapal said.
Bezos also caught fire from Rep. Lucy McBath (D-GA) on Amazon’s ability to “systematically block” sellers from selling specific products, citing direct testimony from a seller who thought it had been blocked.
“I don’t think this is happening systematically,” Bezos said. “Aggregate third-party sellers are doing very well on Amazon.”