Tuesday, 19 October 2021 10:10

Amazon accused of lying to House panel over business practices Featured

Amazon accused of lying to House panel over business practices Pixabay

Online retail giant Amazon has been accused of misleading the government's Committee on the Judiciary about its business practices, in the wake of a Reuters report that the company was copying Indian products and manipulating search results to favour its own products over private Indian brands.

Five members of the Judiciary Committee of the US House of Representatives made the accusation in a letter sent to Andy Jassy, the president and chief executive of Amazon on Monday. The company has not made any public statement about the accusations.

"We write in response to recent, credible reporting that directly contradicts the sworn testimony and representations of Amazon’s top executives — including former CEO Jeffrey Bezos — to the Committee about their company’s business practices during our investigation last Congress," the letter said.

"At best, this reporting confirms that Amazon’s representatives misled the Committee. At worst, it demonstrates that they may have lied to Congress in possible violation of federal criminal law."

The five are Jerrold Nadler, chairman of the Judiciary panel; David Cicilline, chairman of the Sub-committee on Anti-trust, Commercial and Administrative Law; and Ken Buck, Pramila Jayapal and Matt Gaetz, all ranking members on the same sub-committee.

The five said the matter was "serious" and gave Jassy until 1 November "to provide exculpatory evidence to corroborate the prior testimony and statements on behalf of Amazon to the Committee".

"We strongly encourage you to make use of this opportunity to correct the record and provide the Committee with sworn, truthful, and accurate responses to this request as we consider whether a referral of this matter to the Department of Justice for criminal investigation is appropriate."

The Reuters report, by Aditya Kalra in New Delhi and Steve Secklow in London, examined thousands of internal documents from the company. It said the copying and rigging of search results was systematic and part of a formal strategy employed by the company.

"...thousands of pages of internal Amazon documents examined by Reuters — including emails, strategy papers and business plans — show the company ran a systematic campaign of creating knockoffs and manipulating search results to boost its own product lines in India, one of the company’s largest growth markets," Kalra and Secklow wrote.

"The documents reveal how Amazon’s private-brands team in India secretly exploited internal data from Amazon.in to copy products sold by other companies, and then offered them on its platform.

"The employees also stoked sales of Amazon private-brand products by rigging Amazon’s search results so that the company’s products would appear, as one 2016 strategy report for India put it, 'in the first 2 or three … search results' when customers were shopping on Amazon.in."

The Judiciary Committee's letter cited the Reuters report as providing "one example, [where] Amazon replicated a popular brand of shirts, copied the measurements of the shirt 'down to the neck circumference and sleeve length', and then partnered with the manufacturer of the product to produce a version of similar quality".

"As Amazon’s internal document noted, 'It is difficult to develop this expertise across products and hence, to ensure that we are able to fully match quality with our reference product, we decided to only partner with the manufacturers of our reference product'," the five US politicians said.

They emphasised that this was not a rogue report, saying that similar stories had appeared in The Wall Street Journal, The Markup and The Capitol Forum.

Jassy was ordered to produce the following by 1 November:

  • A sworn response to clarify the record as to how Amazon uses non-public individual seller data to develop and market its own line of products;
  • A sworn response to clarify the record as to how Amazon advantages its own products over products from other sellers in its search rankings, including through sponsored results that are undisclosed;
  • All documents and communications relating to Amazon’s internal inquiry into violations of its Seller Data Protection Policy as detailed in Amazon’s 4 October 2020 letter which claimed “Amazon’s policy does not permit private brands employees to look at the number of sales made by a single seller”;
  • All documents referred to in the Reuters report entitled “Amazon copied products and rigged search results to promote its own brands, documents show;” and
  • A response to The Markup report entitled “Amazon Puts Its Own “Brands” First Above Better-Rated Products,” including an explanation as to why Amazon does not publicly label search results for its brand-product listings as advertisements.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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