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Amazon threatened with criminal probe over reported search and product discrimination

Amazon threatened with criminal probe over reported search and product discrimination


Amazon denies using seller data to copy products

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Illustration by Alex Castro / The Verge

House lawmakers are giving Amazon one last chance to correct the record on whether it uses seller data to copy popular third-party products and manipulate marketplace search results in light of recent reporting.

In the Monday letter addressed to Amazon chief executive Andy Jassy, lawmakers called on the company to provide “exculpatory evidence” to corroborate congressional testimony that directly conflicts with recent reporting regarding the use of third-party seller data. Specifically, lawmakers called out Amazon founder Jeff Bezos for statements made in a 2020 hearing, claiming that the ecommerce giant “prohibits the use of anonymized data, if related to a single seller, when making decisions to launch private brand products.”

That claim was contradicted by a series of recent reports from Reuters and The Markup, which found that Amazon used data from independent sellers to copy popular products and manipulate search results favoring their own house brand items.

“At worst, it demonstrates that they may have lied to Congress.”

“At best, this reporting confirms that Amazon’s representatives misled the Committee,” a bipartisan group of House Judiciary Committee lawmakers wrote. “At worst, it demonstrates that they may have lied to Congress.”

Third-party sellers have accused Amazon of this behavior for years, and the company’s alleged discriminatory behavior was part of a yearslong House antitrust investigation into the company and other lawmakers last year.

In a statement to The Verge on Monday responding to the letter, an Amazon spokesperson said that the company “did not mislead the committee.” The spokesperson reiterated Amazon’s internal policy banning employees from using seller data to make private label products; the same policy Bezos mentioned in his testimony last year.

“We investigate any allegations that this policy may have been violated and take appropriate action,” the spokesperson said. “In addition, we design our search experience to feature the items customers will want to purchase, regardless of whether they are offered by Amazon or one of our selling partners.”

The lawmakers have given Amazon until November 1st to provide additional evidence supporting these claims.

Amazon sent along additional statements specifically addressing each report from last week. Regarding The Markup story, Amazon pointed out that its house brand ad placements are “clearly labeled to distinguish them from search results,” and that results are tailored to “the customer’s query, the product the customer is shopping for, and whether the customer is shopping on desktop, mobile browser, or in our app.”

The Amazon spokesperson also went on to say “private label products are a common retail practice, and are good for customers.”

Last Thursday, a bipartisan group of senators, led by Sen. Amy Klobuchar (D-MN), put out a new bill that would prevent companies like Amazon, Apple, and Google from using their dominance to disadvantage their competitors. The measure, The American Choice and Innovation Online Act, was approved out of the House Judiciary Committee last week. 

In response to the bill, an Amazon spokesperson said that the measure would “jeopardize” the company’s ability to run a marketplace for the third-party sellers lawmakers argue the company hurts in search results.

As of publication, the Democrat-led bill has garnered bipartisan support from Republicans like Sen. Cynthia Lummis (WY), Josh Hawley (MO), and Lindsey Graham (SC).

Amazon did not comment on whether it plans to issue new evidence to the committee before the end of the month. In the letter, House lawmakers encouraged the company “to correct the record” while they consider whether to refer the alleged false testimony to the Justice Department “for criminal investigation” if appropriate.