A bipartisan group of lawmakers on the House Judiciary Committee on Friday called on Amazon CEO Jeff Bezos to answer questions about reports that the company has been using data gleaned from the platform’s third-party sellers to create its own competing products. In sworn testimony before Congress, one of the online retail giant’s top attorneys said the online retail giant does use individual seller data to directly compete.
The letter to Bezos came in response to last week’s Wall Street Journal investigative report which said that Amazon has been using such data to “decide how to price an item, which features to copy or whether to enter a product segment based on its earning potential.”
Lawmakers specifically noted that the Journal’s reporting was sourced from both current and former Amazon employees, several of whom said they were directly involved in the practice.
“If these allegations are true, then Amazon exploited its role as the largest online marketplace in the U.S. to appropriate the sensitive commercial data of individual marketplace sellers and then used that data to compete directly with those sellers,” the panel wrote. “Amazon has responded to this report by describing the Amazon employees’ conduct as a violation of its formal policy against the use of non-public, individual seller data.”
The report, however, details that Amazon employees described pulling competitors’ data as “’standard operating procedure’ when making products such as electronics, suitcases, sporting goods or other lines.’ Other employees noted that Amazon’s rules against this conduct ‘weren’t uniformly enforced,” and that “using such data was a common practice that was discussed openly in meetings.’”
Referring to Amazon general counsel David Zapolsky’s July 26 letter to the Committee in which he claimed the data-stealing practice was prohibited by Amazon’s private brands, lawmakers said those statements now “appear to be misleading, and possibly criminally false or perjurious.”
The committee also said they expect Bezos to himself to testify before the committee about Amazon’s business practices, making clear they would subpoena him if necessary.
“In light of our ongoing investigation, recent public reporting, and Amazon’s prior testimony before the Committee, we expect you, as Chief Executive Officer of Amazon, to testify before the Committee,” the letter stated. “Although we expect that you will testify on a voluntary basis, we reserve the right to resort to compulsory process if necessary.”
See below for the full letter.
[image via Drew Angerer/Getty Images]
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