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Amazon may have lied to Congress, five U.S. lawmakers say

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The Amazon emblem is seen exterior its JFK8 distribution middle in Staten Island, New York, U.S. November 25, 2020. REUTERS/Brendan McDermid

LONDON, Oct 18 (Reuters) – 5 members of the U.S. Home Judiciary committee wrote to Amazon.com Inc’s chief govt Sunday, and accused the corporate’s prime executives, together with founder Jeff Bezos, of both deceptive Congress or presumably mendacity to it about Amazon’s enterprise practices.

The letter additionally states that the committee is contemplating “whether or not a referral of this matter to the Division of Justice for felony investigation is suitable.”

Addressed to Amazon CEO Andy Jassy, the letter adopted final week that confirmed that the corporate had performed a scientific marketing campaign of copying merchandise and rigging search ends in India to spice up gross sales of its personal manufacturers – practices Amazon has denied participating in. Jassy, a longtime Amazon govt, succeeded Bezos in July.

The letter states that “credible reporting” within the Reuters story and up to date articles in a number of different information retailers “immediately contradicts the sworn testimony and representations of Amazon’s prime executives – together with former CEO Jeffrey Bezos.”

“At finest, this reporting confirms that Amazon’s representatives misled the Committee. At worst, it demonstrates that they could have lied to Congress in attainable violation of federal felony legislation,” the letter states. Reuters reviewed a replica of the letter.

In response, an Amazon spokesperson issued an announcement that mentioned: “Amazon and its executives didn’t mislead the committee, and we now have denied and sought to right the document on the incorrect media articles in query.”

It added: “As we now have beforehand said, we now have an inside coverage, which works past that of another retailer’s coverage that we’re conscious of, that prohibits the usage of particular person vendor knowledge to develop Amazon personal label merchandise. We examine any allegations that this coverage could have been violated and take acceptable motion.”

Since 2019, the Home Judiciary Committee has been investigating competitors in digital markets, together with how Amazon makes use of proprietary vendor knowledge from its platform, and whether or not the corporate unfairly favors its personal merchandise.

In sworn testimony earlier than the Judiciary Committee’s antitrust subcommittee final yr, Bezos mentioned the corporate prohibits its workers from utilizing knowledge on particular person sellers to profit its personal private-label product strains. In one other listening to in 2019, Nate Sutton, Amazon’s affiliate common counsel, testified that the corporate doesn’t use such knowledge to create its personal branded merchandise or alter its search outcomes to profit them.

Requested through the 2019 congressional listening to whether or not Amazon alters algorithms to direct shoppers to its personal items, Sutton replied: “The algorithms are optimized to foretell what prospects wish to purchase whatever the vendor.”

The lawmakers’ letter offers Jassy “a ultimate alternative” to supply proof to corroborate the corporate’s prior testimony and statements. It additionally notes that “it’s criminally unlawful to knowingly and willfully make statements which are materially false, conceal a cloth reality, or in any other case present false documentation in response to a congressional investigation.”

It offers the CEO till Nov. 1 to supply a sworn response to make clear “how Amazon makes use of private particular person vendor knowledge to develop and market its personal line of merchandise” and the way Amazon’s search rankings favor these merchandise.

It additionally requests copies of all paperwork talked about within the Oct. 13 Reuters investigation.

“We strongly encourage you to utilize this chance to right the document and supply the Committee with sworn, truthful, and correct responses to this request as we think about whether or not a referral of this matter to the Division of Justice for felony investigation is suitable,” the letter states.

The Reuters probe was based mostly on 1000’s of pages of inside Amazon paperwork – together with emails, technique papers and enterprise plans. They confirmed that, not less than in India, Amazon had a proper, clandestine coverage of manipulating search outcomes to favor Amazon’s personal merchandise, in addition to copying different sellers’ items – and that not less than two senior firm executives had reviewed it.

In response to the Reuters report, Amazon mentioned, “We consider these claims are factually incorrect and unsubstantiated.” The corporate didn’t elaborate. The corporate mentioned the best way it shows search outcomes does not favor private-brand merchandise.

The lawmakers’ letter additionally cites different latest tales within the Markup, the Wall Road Journal and the Capitol Discussion board about Amazon’s private-brand merchandise and use of vendor knowledge.

The letter’s sharp wording ratchets up the rhetoric between Washington and Large Tech. Firms together with Amazon, Fb Inc, Apple Inc and Alphabet Inc’s Google have been beneath rising scrutiny in Washington, Europe and different elements of the world, fueled by issues amongst regulators, lawmakers and client teams that the companies have an excessive amount of energy and are participating in unfair practices that harm different companies.

The lawmakers’ letter was signed by a bipartisan group, and included the judiciary committee’s chairman, Democrat Jerrold Nadler, and 4 members of the antitrust subcommittee – its chair, Democrat David Cicilline, vice chair Pramila Jayapal and Republicans Ken Buck and Matt Gaetz.

On Wednesday, following publication of the Reuters investigation, U.S. Democratic Senator Elizabeth Warren, a distinguished critic of Amazon, known as for breaking apart the corporate. In India, a gaggle representing tens of millions of brick-and-mortar retailers urged Prime Minister Narendra Modi’s authorities to take motion in opposition to Amazon.

Reporting by Steve Stecklow in London, Aditya Kalra in New Delhi and Jeffrey Dastin in Palo Alto. Enhancing by Peter Hirschberg.

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