A month and a half after US Congressional members called on Jeff Bezos to testify in an antitrust probe, Amazon has said its founder and CEO would be willing to appear at a hearing — under certain conditions. It would be Bezos’s first time testifying before Congress.
The House Judiciary Committee is investigating Amazon, along with Apple, Facebook, and Google, because of the unprecedented power they wield over the way Americans shop, search, and communicate online. Bezos’s willingness to testify is an acknowledgment of the seriousness of the probe, which could result in lawmakers recommending legal action from federal regulators or an overhaul of antitrust laws to rein in Big Tech.
A lawyer representing Amazon told leaders of the House Judiciary Committee in a letter on Sunday that Bezos would be open to testifying if it was alongside the CEOs of the other three tech giants. He added that the company wanted more clarity on the timing and format of such a hearing, and stressed that other Amazon executives, not Bezos, now run the day-to-day businesses at Amazon that the investigation has focused on.
The investigation, led by subcommittee chairman David Cicilline (D-RI), began last summer and has evaluated the ways the tech titans compete against rivals and even their own partners. The goal is to determine whether current antitrust laws are suitable to check their power or whether new laws need to be written. In the case of Amazon, lawmakers have expressed concerns about the data Amazon uses to create its own brands that end up competing against small businesses that sell on Amazon’s platform. The committee has also heard from small businesses that say Amazon gets away with bullying them because of the e-commerce giant’s control over online commerce in the US.
The year-long probe has already included five public hearings, along with massive document requests from the four companies. At its conclusion, the subcommittee will issue a report on its findings, which may include recommendations for updates to antitrust law. These findings, and potential recommendations, could put pressure on regulators such as the Federal Trade Commission to take legal action against Amazon in an effort to change the way it does business or to potentially break up certain parts of its business from one another. They could also lead to new antitrust laws that would more tightly control the practices of the dominant online tech platforms.
It is not yet clear whether the Congressional investigators will try to hold one hearing with all four CEOs or separate hearings for each company — or whether Amazon would make Bezos available in an Amazon-only hearing. Any one of the CEOs testifying in front of lawmakers has the potential to be a huge newsmaker, with crowds of journalists and other interested parties wanting to attend. These hearings are undoubtedly a form of political theater. But they also have the power to attract more political scrutiny of a company while raising awareness among the general public about issues at a given corporation.
A single hearing with all four CEOs present would mark a historic event in the business world. But the ongoing Covid-19 pandemic raises questions about how Congress might pull off a hearing with even one big-time CEO right now, let alone all four. Cicilline’s office did not immediately respond to a request for comment on whether it would consider holding the hearing, or hearings, virtually.
“The testimony of CEOs and the production of internal documents is essential to complete this bipartisan investigation into the state of competition in the digital marketplace,” Cicilline said in a statement to Recode. “The Antitrust Subcommittee will continue to use the tools at our disposal to ensure we gather whatever information is necessary for our work.”
Last week, the Wall Street Journal reported that the European Union was nearing formal antitrust charges against Amazon related to its dealings with its own sellers, which are the small- and mid-sized merchants that sell goods to consumers on Amazon and account for nearly 60 percent of the company’s sales. Some critics say Amazon engages in anti-competitive behavior against these merchants by using their data to unfairly compete against them with its own line of brands, such as Amazon Basics.
The concern is that Amazon profits from these sellers by charging them commissions and advertising fees to access Amazon’s huge customer base, but then uses the data it collects from those same partners to unfairly compete against them.
Likewise, the US Congressional antitrust investigation has also homed in on Amazon’s treatment of these merchants. The original call for Bezos to testify came in the wake of a Wall Street Journal investigation in April that revealed Amazon employees have at times accessed data from individual marketplace sellers to help decide which products Amazon would create and sell under its private-label brands. A top Amazon lawyer, Nate Sutton, had previously testified that Amazon had policies that precluded its own in-house brands from using data from individual sellers to create its own products. Amazon said at the time that it would investigate the matter internally but hasn’t publicly commented on its findings.
Amazon is facing other scrutiny, too. Some US lawmakers, policymakers, and even some of Amazon’s own white-collar employees are concerned the company hasn’t done enough to protect its warehouse workforce during the global health crisis; they’re also questioning why the company fired more than a half-dozen employees who were involved in protests about Covid-19 working conditions. Amazon has said the employee activists were fired for violating company policies and has touted myriad precautions it has taken inside its warehouses that it says show it has done more than many of its e-commerce competitors.
Beyond the antitrust investigations in Europe and by US Congress, the Federal Trade Commission has also been probing Amazon on similar antitrust matters, including how it competes with its merchants, and whether Amazon Prime unfairly undercuts competitors on price. While the Congressional antitrust investigation can’t end in legal action, the FTC’s probe could. And whether the FTC admits it or not, both the EU’s expected antitrust charges and the House investigation could apply more pressure for the commission, which in the past has been slow to act, to do something.