Reuters reports this morning that Sen. Josh Hawley (R-Missouri) is urging the US Department of Justice " to open a criminal probe of Amazon.com Inc, saying the online retailer was building a monopoly using 'predatory data practices' on vendors using its platform."
It was reported in the Wall Street Journal last week that Amazon employees have been using sales data for products marketed by independent sellers on its site as a way of deciding what private label items it should make and market, and how much it should charge for them.
Reuters notes that Hawley has long been "critical of big tech platforms like Alphabet’s Google." And, the story points out, "The big four tech platforms — Google, Apple, Amazon and Facebook — are under investigation by the House Judiciary Committee and Justice Department while the Federal Trade Commission is probing Facebook and Amazon. Meanwhile, groups of state attorneys general are looking at Facebook and Google."
- KC's View:
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I continue to believe what I said last week.
If Amazon is assuring third party vendors that it won't use their sales data to make decisions about competitive private label items, and it is doing so, that would be wrong.
If Amazon assured Congress under oath that it doesn't do this, and it does, that could be more than problematic. It could be a crime.
But … Amazon is doing what every retailer does. It looks for high-performing brands and, where it makes sense, knocks them off in a private label version and undercuts them on price. Amazon probably is doing it better and faster and with greater impact, but that's par for the course.
That said, Amazon is a convenient political target in some precincts on both sides of the aisle, so it should expect to see more of this.
