June 16, 2020

California and Washington enter Amazon investigation

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California and Washington state representatives have entered an ongoing investigation of questionable business practices used by Amazon alongside the European Union and federal investigators. Amazon is currently under scrutiny for abusing antitrust regulations that promote (or, rather, don’t promote) market inclusion of third party sellers.

Amazon has recently been brought into question for using information based on their third party sellers to their own brand’s advantage. According to Dana Mattioli at the Wall Street Journal, “employees have used data about independent sellers on the company’s platform to develop competing products.” This information sparked involvement of the European Union, who for two years has been investigating Amazon’s antitrust regulations, as well as California and Washington state officials, now surveying the treatment of independent sellers in Amazon’s Marketplace. Despite increasing pressure from the authorities, Amazon continually opts to avoid confrontation. With more authorities joining the investigation, more eyes on Amazon and similar corporations should help reigning in these unchecked powerhouses.

Much like other tech giants, Google and Facebook, Amazon faces similar concerns regarding abuses of data and overpowering the marketplace. This is absolutely not an isolated occurrence specific to Amazon. The sheer amount of alleged antitrust abuses shrouding big corporations like Amazon’s could mean a reevaluation of their assets as well as fining them for, “as much as 10% of its annual global revenue–or as much as $28 billion based on 2019 figures.”

So where do independent sellers within Amazon’s Marketplace stand? Karen Weise and mid these allegations, Amazon argues their marketplace “has empowered small sellers on its platform and has delivered results to consumers,” yet the credibility of the company’s information has yet to be confirmed. According to Annie Palmer at CNBC, today, Jeff Bezos agreed to testify to the House Judiciary Committee, despite having refused to come forward in the past.

With a hearing slated for later this summer, expect to hear in full earnest Amazon’s commitment to not only their customers, but the independent businesses that occupy their marketplace.

 

 

Andy Dion is an intern at Melville House.

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