Amazon accused by Congress of 'potentially criminal' lies about data use

Amazon is accused of lying to Congress, when the company said it didn’t use data from its third-party sellers to compete with them.

Those allegations were made in a letter from the bipartisan House Judiciary Committee on Wednesday, accusing Amazon executives of “potentially criminal activity.”

An inventor created a unique "car trunk organizer." It sold well on Amazon.

Amazon then allegedly copied it, producing an almost identical version under one of its own brands.

That's one instance of the conflict of interest the House Judiciary Committee says is at the heart of the allegations against the company.

The committee's letter offers more examples like this, drawn from reporting by the Washington Post, Reuters, The Markup, The Capitol Forum, and the Wall Street Journal.

A former employee told the committee that employees had free access to seller data — data that allows Amazon to identify promising products and copy their most important details.

In testimony to the House Judiciary Committee, a former Amazon employee said third-party seller data was like “a candy shop. Everyone can have access to anything they want. There’s a rule, but there’s nobody enforcing or spot-checking."

KUOW reported extensively on these issues in a 2019 episode of the podcast Primed.

Amazon found itself in especially hot water with Congress when the company denied using third-party seller data in this manner, and failed to provide key documents the House Judiciary Committee requested.

The committee called Amazon’s statements misleading and possibly criminally false, or perjurious, and recommended that the Justice Department investigate the company for obstruction of Congress, or violation of other applicable federal laws.

The letter was signed by Democrats and Republicans from across the political spectrum, from Washington State Representative Pramila Jayapal to Florida Representative Matt Gaetz.

In a statement, Amazon officials said, “There’s no factual basis for this, as demonstrated in the huge volume of information we've provided over several years of good faith cooperation with this investigation.”

Amazon's argument, and the committee's rebuttal

When the House Judiciary Committee first leveled its allegations, Amazon sought to draw a distinction between the way it handles data from individual sellers verses its use of aggregate data, representing multiple sellers. Amazon insisted it did not allow the use of individual seller data.

But the committee asserts that these distinctions are in practice, meaningless.

For example, in the case of the car trunk organizer, a single company’s product “accounted for 99.95% of total sales in the car trunk organizer product category.”

But, the committee wrote, because “Amazon resells returned or damaged versions of the product through its Amazon Warehouse Deals program," the original sellers' sales did not represent 100% of sales. Therefore, the committee wrote, Amazon "considers the sales for that product to be aggregate,” and the company allowed itself to look at the data and use that data to come up with its own knock-off version.

The committee confronted Amazon with these allegations, but was stonewalled, the committee argues.

At first, the committee says Amazon gave misleading information. Then, after further reporting, congressmembers called Amazon’s testimony into question. Amazon walked back its claims about how it uses data, and then refused to provide the committee with results from an internal investigation conducted by a law firm, citing attorney client privileges — even though attorney client privileges do not apply to this committee’s work, the letter states.