Amazon Misled Congress, U.S. Lawmakers Say While Teasing Potential Criminal Probe

Amazon Misled Congress, U.S. Lawmakers Say While Teasing Potential Criminal Probe
Photo: Graeme Jennings, Getty Images

The House Judiciary Antitrust subcommittee is giving Amazon one last chance to tell the whole truth about its use of third-party sellers’ data. Fool me once, shame on me… maybe a bunch of other times, too, but this time, they’re serious.

On Monday, five House Judiciary Committee members published a letter accusing executives, including Amazon founder and Chairman Jeff Bezos, of possibly lying to Congress during an antitrust investigation, adding that they’re considering referring this to the Department of Justice for a criminal investigation. The letter was sent to Amazon CEO Andy Jassy, from Reps. Jerrold Nadler (D-NY), David Cicilline (D-RI), Ken Buck (R-CO), Pramila Jayapal (D-WA), and Matt Gaetz (R-FL).

The letter refers to last week’s Reuters report showing that the company had an explicit, detailed strategy to rip off third-party sellers in India, used their data to streamline their own knockoffs, and prioritised its products in search results. Last year in a House antitrust subcommittee hearing, Bezos didn’t deny those practices but passed the buck to hypothetical bad actors within Amazon. “What I can tell you is we have a policy against using seller-specific data to aid our private-label business,” he said. “But I can’t guarantee you that policy has never been violated.” Amazon’s been sticking to that line — that the company has a policy, and it’s possible that bad employees violate this policy. It’s extremely unclear what would motivate an employee to violate company policy in order to help the company.

“At best, this reporting confirms that Amazon’s representatives misled the Committee,” the letter states. “At worst, it demonstrates that they may have lied to Congress in possible violation of federal criminal law.”

Committee members also point to similar reports from the Markup, the Wall Street Journal, and the Capitol Forum, stating that the reports “are inconsistent with the sworn testimony and numerous statements made by Amazon’s executives to the Committee during our investigation into Amazon’s business practices last Congress.” Amazon has denied findings in each report that Amazon uses non-public, seller-specific data and unfairly boosts its own brands.

In a statement shared with Gizmodo, an Amazon spokesperson said outright that “Amazon and its executives did not mislead the committee, and we have denied and sought to correct the record on the inaccurate media articles in question.” They added that Amazon’s internal policy “prohibits the use of individual seller data to develop Amazon private label products” and that Amazon investigates potential violations.

Last year, two U.S. lawmakers accused Amazon of lying to Congress after a Wall Street Journal report found that documents and employee interviews confirmed that the company tapped third-party sellers’ data, which is considered private, for its own gain. The Journal noted that Amazon could use that data to identify the most desirable product features or set its price points.

That contradicted a 2019 testimony from Nate Sutton, Amazon’s associate general counsel, who said that “we do not use any seller data for — to compete with them.” After that hearing, the lawmaker letter sent this week notes, Amazon general counsel David Zapolsky sent a letter doubling down, writing that Amazon “prohibit[s] in our private label strategy the use of data related specifically to individual sellers” and aggregated store data on total sales and search volume for categories and products.”

The lawmakers’ letter notes that knowingly lying in a congressional investigation and making perjurious statements under oath before Congress are federal crimes. Amazon is also facing antitrust probes in the EU and India. Both have agreements with the U.S. allowing them to share evidence related to potential antitrust violations.