The Wall Street Journal: Amazon CEO Jeff Bezos Called to Testify Before Congress

May 1, 2020
In The News

Lawmakers on the House Judiciary Committee called on Amazon.com Inc. Chairman and CEO Jeff Bezos to testify on its private-label practices, citing a Wall Street Journal investigation that found Amazon employees used data about independent sellers on its platform to develop competing products.

The House panel has been investigating the market power of Amazon and other large technology firms.

“On April 23, the Wall Street Journal reported that Amazon employees used sensitive business information from third-party sellers on its platform to develop competing products,” lawmakers from both parties said in a letter to Mr. Bezos on Friday. “The report was based on interviews with over 20 former or current Amazon employees and the company’s internal documents.”

“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 said.

Testimony by Mr. Bezos would give lawmakers a public forum to interrogate him on the private-label practices as well as other subjects. Bipartisan concerns about the company stretch across a range of issues, from its market power and its impact on small businesses to the safety of its workers and sales of counterfeit products on its platforms.

Amazon has been providing documents to the House panel, but has resisted the idea of Mr. Bezos personally testifying, according to a person familiar with the matter. Amazon has said it is cooperating with lawmakers.

Amazon declined to comment on the House request, referring instead to its response to the Journal’s story last month. At that time, Amazon said that employees using data to inform private-label decisions in the way described in the story would violate its policies, and that the company has launched an internal investigation.

Mr. Bezos hasn’t previously testified before Congress.

In response to previous antitrust scrutiny, Amazon has said it follows all laws and has emphasized that it accounts for less than 4% of the U.S. retail market.

After the Journal report, Sen. Josh Hawley (R., Mo.) pushed the Justice Department to open a criminal antitrust investigation into the company.

Last week, Democrats on the judiciary panel questioned whether Amazon misled Congress in sworn testimony from July. At the time, an Amazon associate general counsel told Congress: “We don’t use individual seller data directly to compete” with businesses on the company’s platform.

Amazon will have difficulty refusing the lawmakers’ request that Mr. Bezos testify. The judiciary committee has subpoena power, which the committee’s chair, Rep. Jerrold Nadler (D., N.Y.) can exercise unilaterally even if other members of the panel don’t agree.

“Although we expect that you will testify on a voluntary basis, we reserve the right to resort to compulsory process if necessary,” said the letter from Mr. Nadler and six others—including Reps. David Cicilline (D., R.I.) and Jim Sensenbrenner (R., Wis.), the top members of the judiciary panel’s subcommittee on antitrust issues.

Rep. Jim Jordan of Ohio, the ranking Republican on the judiciary committee, didn’t sign the letter. He issued a statement Friday questioning whether Democrats want to break up tech companies “simply because they are large successful businesses.” Democrats have said they aren’t prejudging the outcome of the investigation.

The timing of a future hearing isn’t clear and will be complicated by the coronavirus pandemic. Congressional committees haven’t held in-person hearings since mid-March. This week the House Sergeant at Arms extended until at least May 16 restrictions on access to the House’s office buildings, where hearing rooms are located.

Mr. Bezos is a regular presence in the nation’s capital, just not typically a public one. He owns the Washington Post and has a mansion in northwest Washington, and Amazon is a major government contractor.

The House panel has been investigating the market power of Amazon and other technology giants since last summer, asking the company to turn over reams of documents that included some of Mr. Bezos’ emails. Amazon has joined other firms in turning over millions of pages of documents, officials said, though the nature of those documents hasn’t been made public.

Lawmakers said on Friday Amazon hasn’t fully responded to requests for information about its relationship to sellers. “Seven months after the original request—significant gaps remain,” the letter said.

Mr. Bezos might receive a more welcoming reception in some quarters. After an Amazon executive finished testifying before the House panel last summer, Rep. Kelly Armstrong (R., N.D.) told a second panel of witnesses about the benefits of e-commerce. “At no point in time, from my house in Dickinson, N.D., have I had more access to more diverse and cheap consumer products,” he said.

Mr. Bezos founded Amazon in his home garage in 1994 and has since grown it into one of the world’s biggest companies. As of Friday morning, Amazon had a $1.2 trillion market capitalization. Its size—and role operating a marketplace while competing with it—has drawn the attention of regulators.

The Amazon chief executive has a contentious relationship with President Trump, who has criticized Mr. Bezos for what the president called unfavorable coverage in the Washington Post. The Post has said its coverage is independent of Mr. Bezos. Amazon also has contended that it lost out on a Pentagon cloud-computing contract worth as much as $10 billion to Microsoft Corp. because of improper pressure from Mr. Trump. A Pentagon inspector general report released last month concluded that available evidence suggests Microsoft’s selection last year didn’t appear to stem from White House pressure.

Earlier this week, the U.S. trade representative’s office put Amazon’s web domains in Canada, France, Germany, India and the U.K. on its “notorious markets” list of platforms that are believed to facilitate intellectual-property violations. Amazon said the action was politically motivated by the Trump administration.

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