Senator Josh Hawley (R., Mo.) asked attorney general Bill Barr to open a criminal antitrust probe into Amazon following reports that the tech giant was illicitly accessing third-party seller data, a violation of official company policy designed to boost its own products.
“Amazon abuses its position as an online platform and collects detailed data about merchandise so Amazon can create copycat products under an Amazon brand,” Hawley writes in the letter, a copy of which was obtained by National Review. “Internal documents and the testimony of more than 20 former Amazon employees support this finding.”
Last week, the Wall Street Journal reported that Amazon regularly breaks its own policy of not accessing independent seller data to conduct market research or inform product design for its private labels — contradicting the sworn testimony of the company’s own associate general counsel, who told the House during a hearing last July that the company does not “use any of that specific seller data in creating our own private brand products.”
“Brick-and-mortar stores collect data, such as how often third-party products are purchased, when they are purchased, and whether they are purchased in combination with other products. Online retailers like Amazon can collect so much more data,” Hawley explains in the letter. “. . . Amazon’s capacity for data collection is like a brick-and-mortar retailer attaching a camera to every customer’s forehead.”
The Missouri Republican also dismisses Amazon’s policy of accessing aggregated data, which it defines as the data of products with multiple independent sellers — even if a single seller produces 99.95 percent of the sale volume.
“Amazon’s aggregate data technically covered two sellers, but it was functionally seller-specific. In any event, aggregate data can still enable Amazon to create or solidify monopoly power,” Hawley argues. “Using aggregate data just means that, when Amazon uses data to create copycat products, it harms multiple small businesses instead of just one.”
Hawley told National Review in a statement last week that the unofficial practice demonstrated the need for an “overhaul” of the Federal Trade Commission (FTC), a move he called for in February. Hawley’s proposal includes shrinking the FTC’s authority, while beefing up the DOJ’s Antitrust Division to effectively police the tech sector.
Barr has signaled skepticism toward tech companies, including an initial broad antitrust investigation that was announced last summer. In February, Barr told a DOJ “workshop” on Section 230, which shields online platforms from liability for content published by third parties — that the law cannot address “the myriad online harms” posed by the current field.
“No longer are tech companies the underdog upstarts; they have become titans of US industry. Given this changing technological landscape, valid questions have been raised on whether Section 230’s broad immunity is still necessary, at least in its current form,” Barr said. “ . . . Technology has changed in ways that no one, including the drafters of Section 230, could have imagined.”
Hawley closed his letter by pointing out the small firms’ added reliance on online platforms like Amazon amid the coronavirus pandemic, saying the situation was “especially concerning now.”
“Thousands of small businesses have been forced to suspend in-store retail and instead rely on Amazon because of shutdowns related to the coronavirus pandemic,” he writes. “Amazon’s reported data practices are an existential threat that may prevent these businesses from ever recovering.”