Last week came news that further complicated the relationship between Amazon and the third-party sellers who use the site to sell their own products. An investigation by Dana Mattioli of The Wall Street Journal suggested that Amazon used third-party data to zero in on hot products — and then launch their own alternatives. The examples cited by the report include a car trunk organizer and an office seating cushion, and were backed up by company documents and quotes from Amazon employees past and present.
The question of whether or not Amazon is ethical with its third-party sellers is not a new one — similar concerns came up in a 2016 article in Fortune. But the breadth of the Wall Street Journal article has brought the online retailer under an increased amount of scrutiny.
Writing at The Verge, Jay Peters noted that “Amazon has been under scrutiny for its anti-competitive practices for some time, though the Federal Trade Commission hasn’t yet opened a formal investigation into the company on the matter.” We might be a step closer to that now, however — one of several areas where a seemingly invincible company is now under pressure from governmental bodies.
The latest development came on Friday, when the House Judiciary Committee asked Amazon’s Jeff Bezos to testify. Lauren Feiner at CNBC notes that the committee has threatened to subpoena Bezos if he does not comply with their request. At issue, Feiner writes, is the question of whether Amazon executives lied to Congress about the company’s business practices in the past:
Seven bipartisan members of the committee said in a letter to Bezos that a recent Wall Street Journal report on Amazon’s use of third-party seller data appears to show that Amazon may have misled Congress in previous statements.
The letter cites the Wall Street Journal article and Amazon’s response to it. The committee notes that it’s part of a larger pattern, however: “The Wall Street Journal report is bolstered by other investigative journalism, as well as preliminary findings of the European Commission, which has opened an antitrust investigation into Amazon for similar conduct.”
Where this bipartisan criticism of Amazon will lead remains to be seen, but it makes for a significant shift for the online retailer even now.
Subscribe here for our free daily newsletter.
Thanks for reading InsideHook. Sign up for our daily newsletter and be in the know.
