U.S. lawmakers are up in arms over accusations that Amazon abuses its position as an online platform by producing copycat products, which then compete against the sellers who offer their own products on the eCommerce giant’s site.
Renewed scrutiny of Amazon was sparked by a Wall Street Journal report that cited former employees who alleged widespread use of sellers’ data.
Now, Senator Josh Hawley of Missouri has sent a letter on Tuesday (April 28) asking the federal Department of Justice (DOJ) to open a criminal probe, per a WSJ report.
In addition, House Judiciary Committee Chairman Jerrold Nadler said in a statement last week that the “report raises deep concerns about Amazon’s apparent lack of candor before the committee regarding an issue that is central to our investigation.”
David Cicilline, chairman of the House Antitrust Subcommittee, said Amazon may have lied to Congress about its business practices regarding the third-party sellers.
Amazon officials had testified before Cicilline’s committee that the company only uses aggregated data from the private sellers on its eCommerce platform. The Journal’s report, however, said Amazon employees could easily figure out the identities of the sellers for some categories of products.
In his letter, Hawley charges that “Amazon abuses its position as an online platform and collects detailed data about merchandise so Amazon can create copycat products under an Amazon brand.”
As reported by PYMNTS, Amazon insists that it restricts staff from accessing the data of its millions of sellers. But 20 former employees told the Journal that they accessed sellers’ information to determine which products Amazon itself should make under its so-called “private labels.” These products include about four dozen brands and as many as 243,000 products. Ex-employees said that rules regarding the use of sellers’ data were often not enforced.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More