US Lawmakers Accuse Amazon Of Lying; Deadline Is 1 November To Clarify Sworn Testimony On Business Practices

by Bhaswati Guha Majumder - Oct 19, 2021 03:02 PM +05:30 IST
US Lawmakers Accuse Amazon Of Lying; Deadline Is 1 November To Clarify Sworn Testimony On Business PracticesAmazon CEO Jeff Bezos (David McNew/Getty Images)
Snapshot
  • A letter which was signed by five American lawmakers from both the parties accused Amazon of possibly lying to Congress about its business practises through testimony from the company's top officials.

    The company has time until 1 November to update the record or offer documents and other proofs to back up its previous testimony.

In a letter released on 18 October, the United States House Antitrust Subcommittee questioned if Amazon misled or lied to Congress about its business practises through testimony from the company's top officials, including the founder of the e-commerce giant Jeff Bezos.

The Committee is also examining “whether a referral of this matter to the Department of Justice for criminal investigation is appropriate," stated the letter.

The letter, addressed to now Amazon CEO and the successor of Bezos, Andy Jassy, came after a Reuters investigation revealed that Amazon had engaged in a systematic campaign of duplicating products and rigging search results in India to increase sales of its own brands. But the company has denied such practices.

According to the letter, the House Antitrust Subcommittee stated that the report contradicts sworn evidence from the company's officials during its inquiry into the company's business practices.

"At best, this reporting confirms that Amazon's representatives misled the Committee. At worst, it demonstrates that they may have lied to Congress in possible violation of federal criminal law," noted the letter which was signed by five American lawmakers from both the parties.

Additionally, it said: "We strongly encourage you to make use of this opportunity to correct the record and provide the Committee with sworn, truthful, and accurate responses to this request as we consider whether a referral of this matter to the Department of Justice for criminal investigation is appropriate."

Now Amazon has time until 1 November to update the record or offer documents and other proofs to back up its previous testimony.

However, following the letter, an Amazon spokesperson issued a statement that said: "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."

The spokesperson stated: "As we have previously stated, we have an internal policy, which goes beyond that of any other retailer's policy that we're aware of, that prohibits the use of individual seller data to develop Amazon private label products."

“We investigate any allegations that this policy may have been violated and take appropriate action,” the spokesperson noted as reported by Reuters.

The Testimony

The House Judiciary Committee has been looking into digital market competition since 2019, including how Amazon uses private seller data from its platform and if the corporation favours its own products unfairly.

In 2020, Bezos said in a sworn testimony that the firm prevents its employees from utilising data on individual sellers to enhance its own private-label product lines.

Before that, in 2019, Amazon's associate general counsel, Nate Sutton, testified at another hearing that the e-commerce behemoth does not utilise such data to construct its own branded items or manipulate its search results to benefit them.

When asked whether Amazon modifies its algorithms to direct customers to its own products during a congressional hearing in 2019, Sutton responded, "The algorithms are optimised to predict what customers want to buy regardless of the seller."

The latest letter provides Amazon CEO Jassy "one last chance" to provide evidence to back up the company's previous testimony and comments.

The lawmakers are now seeking clarity on "how Amazon uses non-public individual seller data to develop and market its own line of products" and how the company's search rankings favour such products.

However, India is one of Amazon's most important markets. Even though Amazon refuted the allegations based on thousands of pages of internal records, Indian retailers demanded a government probe.

Additionally, following the publication of the Reuters report , the United States Democratic Senator Elizabeth Warren called Amazon a “monster” and urged for the firm to be broken up.

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