During the Central European antitrust negotiations, Amazon and its CEO Jeff Bezos came under fire from lawmakers over the alleged use of third-party vendor data in the development of their own products.
Earlier this year, Wall Street Journal stated that Amazon employees have access to sales data from independent vendors in their market to help the company develop competitive products for its private label. Amazon has a policy that prohibits this practice, but legislators like Rep. Pramila Jayapal (D-WA) focused on enforcing this policy by society.
“I̵7;m asking you, Mr. Bezos, does Amazon ever have access and use seller information to make business decisions?” Jayapal asked.
He emphasized the company’s policy of prohibiting this practice, but said: “I cannot guarantee that this policy has never been violated.” He continued: “We are still looking at it very closely. So far, I’m not happy that we got to the bottom of it and we’re still going to look at it. It’s not that easy to do what you think, because some of the resources listed in the article are anonymous. “
before magazineThe report came out, Amazon told Congress it did not have access to sales data to help launch its own products. “Our motivation is to help the salesperson succeed because we rely on them,” said Nate Sutton, Amazon’s general board, at a July July hearing. “They have many options. Therefore, we do not use the same criteria and use their individual data when deciding whether to market private labels. “
Hearing documents on “Online platforms and market power: examining the dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/Ypvxhm7asA
– House Judiciary Dems (@HouseJudiciary) July 29, 2020
Antitrust activists have long feared Amazon’s power over independent vendors on its platform and how they could use it to launch competing products. In a key article on the 2017 law review, antitrust scientist Lina Khan described this as a classic example of discrimination in infrastructure. “Amazon itself effectively manages the infrastructure of the Internet economy.”
Jayapal nevertheless cited documents obtained and interviews conducted during the committee’s investigation, which questioned Amazon’s ability to enforce its policies against obtaining information about sellers. “The committee has heard from employees who claim that such violations usually occur,” Jayapal said.
Collection of aggregate data is permitted in accordance with Amazon’s policies, but not with specific vendor data. Nevertheless, Jayapal claimed that the aggregated data could still provide Amazon with “detailed data” on specific product categories.
“So you can set the rules of the game for your competitors, but in reality you don’t have to follow the same rules for yourself,” Jayapal said.
Bezos also shot from the rep. Lucy McBath (D-GA) on Amazon’s ability to “systematically block” retailers from selling specific products, citing direct testimony from a retailer who believed it was blocked.
“I don’t think it’s happening systematically,” Bezos said. “Overall, third-party vendors on Amazon are doing very well.”