A House committee is asking the US Justice Department to investigate Amazon for allegedly lying to Congress about whether the company uses data on third-party merchants to develop competing products.
The House Judiciary Committee today sent a letter to US Attorney General Merrick Garland, alerting him about Amazon’s “potentially criminal conduct.”
Under the US Code, it’s against the law to influence, obstruct, or impede any proceeding before Congress. But the committee says Amazon did just that during a 16-month investigation into the e-commerce giant. “Throughout the investigation and in follow-up inquiries, senior executives at Amazon engaged in a pattern and practice of misleading behavior before the Committee,” wrote a bipartisan group of US lawmakers, which included Jerrold Nadler (D-NY), David Cicilline (D-RI), and Ken Buck (R-CO).
“The Committee extended multiple opportunities for Amazon to clarify these misconceptions, yet executives continued to thwart our efforts to uncover the truth about their business practices,” the lawmakers added. “Amazon and its executives must be held accountable for this behavior.”
The House Judiciary Committee claims the criminal conduct started in 2019 when an Amazon lawyer testified to US lawmakers that the company never used “any seller data” concerning the third-party merchants on Amazon’s e-commerce platform to create competing products. Amazon has several branded product lines on its platform, including Amazon Basics, which often sell goods at lower prices than third-party vendors.
Despite the rebuke, reporting from The Wall Street Journal found that Amazon actually did use seller data to develop such products, citing interviews with 20 former employees. In July 2020, former Amazon CEO Jeff Bezos told Congress his company was investigating the matter. “We have a policy against using seller-specific data to aid our private label business, but I can’t guarantee you that that policy has never been violated,” he said at the time.
The committee’s own investigation into Amazon has since uncovered “similar evidence from former Amazon employees, as well as current and former sellers,” proving the seller data was used to develop competing goods, it said. But rather than come clean, the US lawmakers claim Amazon “attempted to cover up its lie by offering ever-shifting explanations” around its policies.
“After Amazon was caught in a lie and repeated misrepresentations, it stonewalled the Committee’s efforts to uncover the truth,” the letter adds. This has included Amazon’s refusal to turn over company documents about its internal audits and investigations into its use of seller data.
“As a result, we have no choice but to refer this matter to the Department of Justice to investigate whether Amazon and its executives obstructed Congress in violation of applicable federal law,” the House committee said.
Amazon did not immediately respond to a request for comment, nor did the Justice Department. But the allegations may spell bad news for Amazon on the antitrust front when both the Justice Department and the Federal Trade Commission are already scrutinizing the tech industry for anti-competitive conduct more closely.
