During Wednesday’s antitrust hearing, Amazon and its CEO Jeff Bezos opened fire by lawmakers over the company’s alleged use of third-party vendor data in developing its own products.
earlier this year, Wall Street Journal Amazon employees have obtained sales data from independent vendors on their market to help the company develop competitive products for its private-label. Amazon has a policy prohibiting practice, but lawmakers like Rape Pramila Jaipal (D-WA) focused on the company’s enforcement of that policy.
“Let me ask you, Mr. Bezos, does Amazon ever access and use seller’s data when making business decisions?” Jaipal asked.
Bezos highlighted the company’s policy banning the practice, but said, “I cannot guarantee you that that policy has ever been violated.” He said, “We continue to watch very carefully. I am not yet satisfied that we have seen the underside of it, and we will continue to see it. This is not as easy to do as you would think because some of the article’s sources are anonymous. “
before magazineThe Amazon report surfaced, with Amazon telling Congress that it does not access sales data to help direct the launch of its own products. “Our incentive is to help the seller succeed because we trust them,” Amazon’s Associate General Counselor Nate Sutton said at a hearing last July. “They have many options. So we apply the same criteria to both and when we are deciding to launch a personal brand we do not use their personal data. “
“Online Platform and Market Power: Documents on Hearing, Investigating the Dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/Ypvxhm7asA
– House Judicial Dam July 29, 2020
Antitrust activists have long been concerned about Amazon’s power over independent vendors on its platform and how it can use that power to launch competing products. In a decisive 2017 law review article, antitrust scholar Lina Khan cited it as a classic example of discrimination in infrastructure, writing, “Amazon itself effectively controls the infrastructure of the Internet economy.”
Nevertheless, Jaipal cited documents and interviews obtained during the committee’s investigation that questioned Amazon’s ability to implement its own policies against exploitation of vendor data. Jaipal said, “The committee has interviewed such employees who say that these violations usually occur.”
The collection of aggregate data is permitted under Amazon’s policies, not just specific vendor data. Nevertheless, Jaipal argued that the overall data could still provide Amazon with “detailed data” on specific product categories.
Jaipal said, “So you can set the rules of the game for your rivals, but don’t really follow the same rules.”
Bezos also set fire to Lucy McBath (D-GA) from Rep by selling specific products to Amazon’s ability to “systematically block” sellers, citing direct testimony from a seller that believed he was blocked .
“I don’t think it’s happening organically,” Bezos said. “Overall third party vendors are doing very well on Amazon.”