Wednesday’s threat by Amazon to be investigated criminally was carried out by lawmakers. They asked the Justice Department to investigate if Amazon and its senior executives conspired to obstruct Congress or violated federal laws during testimony about its competition practices.
With a letter to Attorney General Merrick Galrland, the House Judiciary Committee escalated their bipartisan fight against the largest online retailer in the world and referred the case for criminal investigation.
The letter states that Amazon committed misleading conduct to “influence, obstruct, or impede” 2019-20 antitrust subcommittee investigation into Big Tech’s market dominance.
It cited testimony from a senior Amazon representative, which stated that Amazon doesn’t use data collected on third-party merchants to make them more competitive. Also, Amazon doesn’t list its products in search results prior to third-party listings. The letter states that credible news reports have refuted these assertions.
Amazon is accused of undercutting businesses selling on its platform through “knock-offs” or very similar products and increasing their visibility on the site.
The lawmakers stated that Amazon tried to correct the incorrect testimony by shifting explanations of its internal policies, and denials in the investigative reports. The committee found evidence from Amazon employees and sellers who were former or current that supported the claims in the reports.
The letter states that Amazon was caught in a liar and made repeated misrepresentations. It then stonewalled efforts by the committee to discover the truth. The Judiciary Committee Chairman Jerrold Ndler, D.N.Y. and the Democratic- and Republican leaders of antitrust subcommittee signed it.
Seattle-based company previously denied that its executives had misled the panel during their testimony.
Amazon released a statement Wednesday stating that “there’s not any factual basis” to the committee’s decision. This was “as shown in the large volume of information we have provided over many years of good-faith cooperating with this investigation.”
Amazon’s third party marketplace is an important part of its business. Independent merchants can list millions of their products on Amazon.com. Amazon claims that over half of the products sold on Amazon.com are from third-party sellers. It boasts about 2 million sellers. It makes money by charging third party sellers fees and generating tens of millions in revenue.
The antitrust subcommittee threatened to subpoena Jeff Bezos, Amazon founder and former CEO in a May 2020 email. If Bezos did not agree to appear before them, the subcommittee would have to issue a subpoena.
The Wall Street Journal reported that Amazon used sensitive and confidential information about sellers, their products, and transactions to create its own products. In statements to a subcommittee hearing held in July 2019, an Amazon executive said that such practices are not allowed and stated that the company has a policy against them.
Amazon claims it investigates allegations of violations of its policies, and takes the appropriate action when necessary.
Bezos, together with Apple CEO Tim Cook, Google CEO Sundar Pichai, and Facebook CEO Mark Zuckerberg, testified to the matter at a July 2020 hearing about Big Tech’s alleged monopolistic practice. Bezos stated that Amazon could not accept claims that it used data from independent sellers to make its products more competitive.
Andy Jassy replaced Bezos as executive chairman last July. Bezos became executive chairman.
Amazon.com has received complaints from some independent merchants that sell their products there. For example, contract provisions prohibit sellers from selling their products at lower prices on other platforms, or with better terms, even their own websites.
Amazon defended itself by stating that sellers can set their own prices on the products they sell through its platform.
Amazon was sued by the District of Columbia last year in antitrust proceedings. The District accused Amazon of using anticompetitive tactics in its treatment of sellers via its platform. According to the lawsuit, these practices led to higher prices for consumers and limited choice in online retail markets.
According to the suit, Amazon has set online retail prices by enforcing contract provisions that prohibit merchants from selling their products on Amazon.com at lower prices or with better terms on other online platforms. Amazon has denied the allegations.
Amazon was one of few retailers to have prospered in the COVID-19 epidemic. It reported profits of $33.36 Billion in 2021, an increase of $21.33 Billion from the previous year.
It announced that its board approved a 20-for-1 stock split on Wednesday, closing the day at $2785.58. This split would make it easier for average investors to purchase one share of Amazon stock.
The board approved a $10 billion stock purchaseback program.
