At the “Online Platforms and Market Power” virtual antitrust hearing today, Amazon CEO Jeff Bezos spoke about a policy that is meant to prevent the company from using seller specific data to help it determine what products it should manufacture and sell itself. “What I can tell you is, we have a policy against using seller specific data to aid our private label business,” Bezos said. “But I can’t guarantee you that that policy has never been violated.”
Antitrust investigations matter to the companies being scrutinized, of course, but also all the businesses that depend on them. In this case, that includes any business that sells physical goods online. The question of whether Amazon uses data from merchants on its platform to help launch competing products is a contentious one. In July 2019, an Amazon lawyer told the subcommittee that the company didn’t tap data from individual third-party merchants to determine what new products to create. In April, the Wall Street Journal reported that Amazon did just that. Rep. Pramila Jayapal (D-WA), who was the first to question Bezos at the hearing, cited the article.
“I’m familiar with the Wall Street Journal article that you’re talking about,” Bezos said. “And we continue to look into that very carefully. I’m not yet satisfied that we’ve gotten to the bottom of it, and we’re going to keep looking at it. It’s not as easy as you would think because some of the sources in the article are anonymous, but we continue to look into it.”
Bezos then tried to play up the fact that Amazon didn’t have to have such a policy. “The fact that we have such a policy is voluntary,” Bezos said. “I think no other retailer even has such a policy. We would treat that like any internal policy, and if we found that someone violated it, we would take action against them.”
“Well, there’s numerous reports, and the committee has conducted interviews with former employees who confirm that there are employees who do have access to that data and are using it,” Jayapal responded. “So my next question was going to be: If you thought you were actually enforcing these rules, do you think that that’s working? And again, I would just say that there’s credible reporting that’s documented breaches of these rules that you have put into place. And the committee has interviewed employees that typically say that these breaches typically occur.”
Later in the hearing, Kelly Armstrong (R-ND) asked whether Amazon allows the use of aggregate data to inform its private label brands when there are only three sellers for a product and then again when there are only two competitors. Bezos said “yes, sir” to both. Armstrong then asked about Amazon’s internal investigation on the use of third party data. “We’re basically trying to understand some of the anecdotes that we saw in the Wall Street Journal article,” Bezos responded. He committed to informing the committee on the outcome of that investigation.
Bezos today also answered questions about whether Amazon prices Echo devices below cost (yes, if they’re on promotion), whether HBO Max is coming to Fire TV (eventually, Warner Bros. and Amazon are negotiating the details), and whether Amazon has monopolistic power (no, he rejects “the premise of the questions”). But the main topic was about merchants trying to sell their products on Amazon.
Bezos was joined by Facebook CEO Mark Zuckerberg, Google CEO Sundar Pichai, and Apple CEO Tim Cook today on Webex. That in and of itself is a rare sight. But this is a rare appearance particularly for Bezos, who speaks the least in public out of the four CEOs (he does not even participate in Amazon’s quarterly earnings calls) and unlike the other three has never sat before Congress.
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