Why Amazon's Jeff Bezos Must Testify Before Congress
By Zach Brown
Our lives are built around relationships. They help communities grow, impact how we shape and view the world, all while providing a sense of security. While relationships come in all different forms and types, we can all agree the bedrock of any good relationship is trust.
Some might say, Amazon and third-party sellers have a special relationship. In theory, third-party sellers are given the opportunity to sell their products on the platform, and in exchange, Amazon is given a small portion of the sales–a relationship certainly worth investing in keeping strong, right?
Of course, with Amazon nothing is ever that simple. The company also markets and produces its own versions of popular goods and products under their “Amazon Private Label” distinction. These products are oftentimes similar to, and in direct competition with, the products of third-party sellers. Which begs the question: how does Amazon decide which products to create and sell under their own label?
Obvious concerns arise when considering the sheer wealth of information about third-party sellers Amazon has at its disposal. This information could range from product sales and profits, all the way to advertising expenses, shipping models, and a product’s overall cost structure. Indisputably, Amazon’s use of this data for its own purposes would be an unfair advantage in the marketplace and could negatively impact third-party sellers.
These concerns haven’t gone unaddressed. When Amazon was questioned by Congress last July as to its use of private seller information to fuel their product decisions, Nate Sutton, General Counsel of Amazon, emphatically denied this assertion stating, “We don’t use individual seller data directly to compete.” But Nate Sutton didn’t stop there even further declaring, “Our incentive is to help the seller succeed because we rely on them,” a bold statement to say the least. However, bold statements aren’t always true statements.
Last week, the betrayal of trust in the relationship between Amazon and third-party sellers became abundantly clear. Gathering information from more than 20 former or current Amazon employees, the Wall Street Journal detailed that Amazon not only used seller information to benefit its own products, but also that the practice was so commonplace that it was openly discussed in meetings. This revelation not only shows that Amazon actively harms its third-party sellers, but also directly calls into question the truthfulness of Nate Sutton’s previous testimony to Congress.
While the details, specifics, and moving parts behind Amazon’s marketplace shopping system is admittedly complex, the concept of needing more transparency from Amazon is not. In any relationship, when trust is broken, there’s a price to pay. Someone must be held accountable and questions must be answered.
For this reason, Public Citizen (as a part of the Athena Coalition) on April 29th, called for the CEO of Amazon, Jeff Bezos, to testify in front of Congress and answer for the actions of his company. We are happy to report that our requests for answers look to have been heard. Last week, the U.S. House of Representatives Judiciary Committee sent a letter to Jeff Bezos informing him that Amazon has not adequately cooperated with the Committee’s investigation of the company’s role in the digital marketplace and demanding that he come forward to testify on the concerns raised by the recent revelations about using third-party sellers’ data to benefit its private label products and “other critical questions concerning competition issues.”
While this letter to Bezos from the Judiciary Committee is a significant first step, it is now up to Public Citizen and our allies to continue to push for Congress to use the full extent of its subpoena power to ensure that Jeff Bezos actually complies with this request. No more testimony from Bezos’ representatives, staff members, or directors. If Jeff Bezos wants Amazon to have a positive relationship with consumers, we demand answers from Bezos himself.
After all, it’s a matter of trust.