Amazon CEO Andy Jassy says online sellers should consider the implications of U.S. antitrust legislation that could force the company to divest its third-party marketplace — warning that there could be “very serious unintended consequences” for their own businesses.
“I’d be a little concerned, and I would pay attention to it,” Jassy said this week during an online event hosted by Amazon for third-party sellers — attempting to marshal support from the same partners that lawmakers contend need to be protected from the company’s tactics.
Jassy, who succeeded Jeff Bezos as Amazon CEO in July, was responding to a question from Dharmesh Mehta, Amazon vice president of worldwide customer trust and partner support, about how sellers should think about a series of pending bills in Congress that seek to rein in big tech companies.
One of those bills, the “Ending Platform Monopolies Act,” sponsored by U.S. Rep. Pramila Jayapal (D-WA) from Amazon’s home district in Seattle, would make it illegal for large companies to compete in marketplaces that they operate, effectively forcing Amazon to choose between its first- and third-party retail platforms.
In advance of its Accelerate seller conference this week, Amazon released new data about the growth and economic impact of its marketplace, saying that third-party sellers “have created an estimated 1.8 million U.S.-based jobs managing, operating, and supporting their Amazon-related businesses.”
“What really has made a big difference for our sellers has been having access to the hundreds of millions of Amazon customers and all the traffic that we’re able to create because of that community,” Jassy said. “You don’t want a situation where you meaningfully hurt small, medium-sized businesses, like I think a bill like that would. And I think it would also hurt consumers.”
Jassy’s comments cap a week in which lawmakers ratcheted up the pressure on Amazon over its third-party marketplace. The latest developments show that scrutiny of Amazon hasn’t diminished even as a whistleblower’s revelations have intensified the focus on Facebook in recent weeks.
Did Amazon execs lie to Congress? On Monday, Jayapal and a bipartisan group of colleagues on the House Judiciary Committee wrote to Jassy, citing news reports indicating that Amazon gamed its marketplace to favor its own products over those from third-party sellers.
They wrote that they were giving the company “a final opportunity” to explain discrepancies between the reports and past statements by Amazon executives before referring the matter to the U.S. Department of Justice.
- Reuters reported last week that Amazon used internal data to create knockoffs based on seller products and then manipulated search results to boost its own product lines in India.
- A separate report by The Markup said Amazon “places products from its house brands and products exclusive to the site ahead of those from competitors—even competitors with higher customer ratings and more sales, judging from the volume of reviews.”
Amazon’s response: “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 company said in a statement this week.
The company cited “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.”
Addressing antitrust questions two weeks ago at the GeekWire Summit, Jassy said it’s “important for Congress or lawmakers to really be thoughtful about what they’re trying to accomplish and not emotional.”
Jassy called the global retail market a “wildly competitive space” and reiterated Amazon’s frequent point that it has 1% of that global market, which the company contends is a more relevant figure than its estimated 40% of U.S. online commerce.
In an interview published by CNBC this week, Amazon VP Mehta addressed the latest news reports: “Every now and then you see speculation around short-term, profit-driven actions and Amazon would not do that,” he said. “It just doesn’t make sense because we’re in this for the long haul with our selling partners.”
Latest legislation: Also this week, U.S. Sens. Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) introduced a bill that would “prohibit dominate platforms from abusing their gatekeeper power by favoring their own products or services, disadvantaging rivals, or discriminating among businesses that use their platforms in a manner that would materially harm competition on the platform.”
Known as the American Innovation and Choice Online Act, the bill would also prevent big platforms from requiring a business to buy its goods or services for preferred placement on a platform, and prohibit platforms from misusing another company’s data to compete against them.
In an interview at a Wall Street Journal conference this week, Klobuchar cited Amazon as an example of misusing seller data, despite its denials. She didn’t rule out the possibility of breaking up big tech companies but described the bill as “one way to go at it where we’re going to get a lot of bipartisan support.”
Jassy on marketplace benefits: In his remarks at the Accelerate conference this week, Jassy called Amazon’s third-party marketplace a rare “win-win-win” situation in business — benefitting customers, sellers, and Amazon.
The best relationships and communities “are ones where we’re really in it together, long-term,” and the Amazon marketplace is an example, he said.
“We realize that we may not have everything right,” Jassy added. “And by the way, we don’t get everything right, here or anywhere, frankly, in our Amazon business. And that’s OK, because the world’s changing fast. As long as we know about things we have to work on together, and we keep working on them together, we can solve those customer problems.”
Amazon reports its third-quarter financial results next Thursday, Oct. 28, including its own retail sales and revenue from services that it offers to third-party sellers.
