Amazon CEO Jeff Bezos speaking at the Economic Club of Washington, D.C. (Economic Club of Washington, D.C. Photo / Gary Cameron)

Federal lawmakers are asking Amazon CEO Jeff Bezos to testify before Congress about the company’s competitive tactics against third-party sellers on its platform — warning that they may compel him to appear if he doesn’t cooperate voluntarily.

Seven members of the House Judiciary Committee, representing Democrats and Republicans, sent a letter asking Bezos to appear before Congress to explain alleged inconsistencies between testimony by one of his deputies last year and a recent Wall Street Journal investigation.

Amazon attorney Nate Sutton said during a 2019 antitrust hearing that Amazon does not use individual seller data when developing products for its private label brand. Amazon has long said that it doesn’t use its advantage as the operator of a marketplace to compete with third-party sellers on that platform. It’s a critical distinction to Amazon critics. As Sen. Elizabeth Warren likes to say, “you can’t be an umpire and own one of the teams that’s in the game.”

The Wall Street Journal reported this month that Amazon’s private label team did, in fact, use information about the pricing and popularity of items sold by third-party retailers to inform its private-label product development, in violation of what Amazon says is company policy.

“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 letter says.

During the antitrust hearing last summer, Rep. Pramilla Jayapal — a Democrat who represents Amazon’s hometown, Seattle — grilled Sutton about the company’s marketplace practices.

“We use data to serve our customers,” Sutton said at the time. “We don’t use individual seller data directly to compete with them.”

Jayapal is a signatory of the letter sent to Amazon this week, along with other members of the House subcommittee on antitrust. They said that they expect Bezos to testify on a voluntary basis but “reserve the right to resort to compulsory process if necessary.”

“If the reporting in the Wall Street Journal article is accurate, then statements Amazon made to the Committee about the company’s business practices appear to be misleading, and possibly criminally false or perjurious,” the letter says.

Amazon declined to comment on the letter but pointed to a previous statement about the Wall Street Journal story.

“As we told the Wall Street Journal and explained in our testimony, we strictly prohibit employees from using non-public, seller-specific data to determine which private label products to launch,” an Amazon spokesperson said. “While we don’t believe these claims made in the Journal story are accurate, we take these allegations very seriously and have launched an internal investigation.”

It’s common practice for retailers to use information about which items are doing well in stores to launch private-label products. It’s the reason you see Kroger-branded tissue next to the Kleenex. Amazon says its behavior is no different, though the company does have access to more vast and granular data than traditional retailers

Amazon is fielding several inquiries about its competitive behavior in the U.S. and abroad. The company was a frequent target of Democrats running for president during the primary debates. But criticism of the company’s dominance has taken a backseat in recent weeks as Amazon became a lifeline to thousands of Americans sheltering at home from the coronavirus pandemic.

Brent Thill, managing director and co-leader of the tech sector, internet research team at investment bank Jefferies, was asked about the regulatory problems now facing Amazon on CNBC this morning. Because of the critical needs Amazon is now filling in the economy, Thill noted that there was a thought that the tech giant might get a “hall pass” on regulatory scrutiny. He added, “that clearly is not happening.”

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