House to Amazon Correct the record or face criminal referral. Yup it’s that simple

Antitrust Subcommittee Members Provide Amazon with Final Chance to Correct the Record Following a Series of Misleading Testimony and Statements

Good Morning… I wanted to let my readers know that I’m going to be in and out for the majority of the week. So this might result in hit or miss publication of articles. For the record the required follow up doctors/surgeon appointments are a total PITA. Mainly because I can’t procrastinate or wait until next month when we return to DC.

Amazon is in the Congressional Crosshairs (again)

Last week this damning report was published, I highly recommend that you take a moment and read their report. As it disclosed that Amazon likely engaged in an “unfair” competitive behavior which put numerous third party companies products lower on a users Amazon Search.

Insofar as “free market” equates to better product quality and at times at a far more reasonable price point. A free market requires a level playing field. It is clear that Amazon used its immense power to push their in-house brand products over those offered by a third party. Conversely the newly released report —which reads in part:

We found that knowing only whether a product was an Amazon brand or exclusive could predict in seven out of every 10 cases whether Amazon would place it first in search results. These listings are not visibly marked as “sponsored” and they are part of a grid that Amazon identifies as “search results” in the site’s source code. (We only analyzed products in that grid, ignoring modules that are strictly for advertising.)  

In 2019 Amazon Executives, testified as to Amazon’s algorithms, third party issues, inventory and product rating — lying or misleading Congress - that’s a one way ticket to the DOJ’s Anti-Trust unit popping your hood and poking around. That said a “free market” doesn’t ameliorate Amazon aggressively pushing its own in house products, which statistically show they are were inferior to the nearly identical products offered by third party partners.

In non-technical/non-legalese -Amazon engaged in behavior that one could view as product manipulation, market manipulation by utilizing Amazon’s algorithms with the expressed goal of stymying the market place in favor of their own products. But lying about it to Congress, repeatedly —that is a whole different discussion…

..If customers are disappointed in the offerings at Amazon, they will quickly turn to other stores to find the best selection, prices, and convenience…

In the October 2019 “Responses to Questions for the Record following the July 16, 2019, Hearing of the Subcommittee on Antitrust, Commercial, and Administrative Law, Committee on the Judiciary, Entitled “Online Platforms and Market Power, Part 2: Innovation and Entrepreneurship” -Amazon’s 69 page written response to various Congressional Questions - Congress point blank asked Amazon the following (and pertinent) question:

Does Amazon’s algorithm take into account any of the following factors:

a. Whether a merchant is enrolled in Fulfillment-by-Amazon;

b. Whether a merchant has purchased ads on Amazon; or

c. Whether a product is private label sold by Amazon?

Amazon’s response to Question # 7

Note the bold text of Amazon’s response, which is problematic in part and as a whole because you can’t lie to Congress all while intentionally deceiving your Customers trust. One thing about trust is, it’s easy to obtain but almost impossible to regain once it’s lost.

Amazon designs its shopping and discovery experience to feature the items customers will want to purchase, regardless of whether they are offered by Amazon or one of its selling partners. Amazon’s algorithms do not take into account the factors described in a, b, and c above when ranking shopping results.

Note the massive growth in Amazon branded products:

This is kind of important because the percentage of growth (105% increase in just under four years) is a clear indication that Amazon seized the massive revenue growth and Amazon manipulated its algorithms to put their (sometimes inferior products) ahead of third party providers. Greed apparently is not as good as you think and it becomes problematic when you repeatedly lie to Congress about your company’s in-house branded products

• $140.2 billion in net sales in Amazon’s stores worldwide in 2018,

• $114.2 billion in 2017,

• $91.4 billion in 2016,

• $76.9 billion in 2015, and

• $68.5 billion in 2014.

The Mark-Up’s Report examined various records lawfully obtained by the US Patent and Trademark Office. Researcher identified more than 150 distinct patents or trademarks. However based on recent data by Statisa - from 2010 thru 2020 Amazon’s explosive growth…

• 2010 Amazon only obtained 118 patents

• 2020 —Amazon Technologies was granted a total of 2,373 patents by the U.S. Patent & Trademark Office

Then in July of 2020 Amazon’s CEO Jeff Bezos appeared before the House Judiciary SubCommittee - this quote is…interesting given that same month the National Association of Wholesaler-Distributors (NAW). This trade association currently represents more than 30,000 distributors…sent Congress this letter -I’d like to draw your attention to the following paragraph:

Amazon Business (the company’s B2B unit) has taken the B2B marketplace, in which NAW members operate, by force. Analysts expect Amazon Business to surpass $50 billion in sales by 2023. In 2019, analysts report that gross sales at Amazon’s B2B marketplace grew by 60% year-over-year – more than triple Amazon’s overall growth rate, including B2C and Amazon Web Services. At this rate, Amazon’s B2B is projected to surpass the size of the core B2C segment. Over 200,000 independent sellers and over 2 million customers are already captive to this increasingly dominant B2B platform.

It’s not an overstatement to say that lawmakers came out of the gate swinging as the leaders of various technology companies faced a public shellacking by lawmakers. Both Democrats & Republicans decried the companies less than competitive business practices. Hence anti-trust violations, which typically lock in a behemoth giant like Amazon to nearly suffocate small businesses and/or forces them into onerous one-sided contracts.

July 2020 Amazon’s Jeff Bezos testimony:

…Just like the world needs small companies, it also needs large ones…There are things small companies simply can’t do. I don’t care how good an entrepreneur you are, you’re not going to build an all-fiber Boeing 787 in your garage.”

October 18, 2021 Congressional Letter

Lawmakers are demanding that Amazon correct the record, provide the documents (of which Reuters recently published a months long investigation into Amazon’s practices) and other evidence to corroborate Amazon’s prior testimony and statements to the Committee by no later than Monday, November 1, 2021. Today’s letter is a follow up this September 13, 2019 letter to Jeff Bezos concerning Amazon’s unfair and likely unlawful business practices …as further elucidated in today’s letter

...or face a referral of this matter to the DOJ for criminal investigation… because lying to Congress is criminal…

…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. In light of the serious nature of this matter, we are providing you with a final opportunity 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."

And lastly the House Committee is not messing around -I now refer you to page 5 of today’s letter —this paragraph is -akin to “shots fired”…read what I highlighted carefully - because that’s a pretty unequivocal salvo…

Again you can read today’s letter and/or the press release which was signed by both Democrats and Republicans. Apparently bipartisanship in DC isn’t actually extinct and occasionally both parties voice outrage..

A few months ago I published this article which detailed Amazon’s unethical conduct as it relates to Collective Bargaining. Which was a follow up of this July 2021 JEDI article -I can actually detail the amount of Twitter hate I received for saying the Trump Admin had improperly used its power to punish Amazon.

Back in July 2019 - I (properly) made the prediction that the JEDI contact would be voided. It took nearly two years for this to happen. But as you’ll note my prediction was grounded in actual first hand knowledge of Government Contracting (TINA and/or FAR and/or FITARA), Legality (or in this case the illegality and incredibly anti-competitive actions by Amazon.

And let’s not forget Pegasus — how MbS managed to hack into Mr Bezos’ phone. The point of reminding of these past articles is to show you that I’m not really in the tank for Amazon. I’m in the tank for facts that can be proven with numerous documents. And I’m certainly not paid in any form for my reporting. Facts man just give me the facts…

Relevant Links regarding Amazon;

• October 18, 2021 Letter -either fix your misleading statements or the House will send a criminal referral

• The Mark-Up October 14, 2021 investigative report on Amazon’s duplicitous business practices

• The Jungle Scout’s October 2021 report -which is highly problematic for Amazon -on a variety of fronts

• May 1, 2020 letter from the House Judiciary SubCommittee to Amazon’s Jeff Bezos, demanding his testimony

• July 29, 2020 Mr. Jeff Bezos Chief Executive Officer, Amazon.com, Inc.

  • Jeff Bezos Statement

  • Jeff Bezos Truth in Testimony

• September 13, 2019 House letter to Amazon’s Jeff Bezos

Again as a reminder I’ll be in and out for most of the week because the plastic surgeon is trying to convince me that my broken nose requires surgery and it can’t wait until next month. Apparently if I wait until we return to DC, it will require them to rebrake my nose. And I am trying to negotiate with both my primary care doctor (located in the DC area) and my dental surgeon that it’s fine —until my primary care doc saw me during today’s virtual appointment and noted that the two black eyes are indicative of a “gnarly brake and that being stubborn is dumb”

Also it’s starting to feel like Fall on the Island. The air temperature and humidity are way down (thanks to a Canadian cold front) but the upside to cooler temps usually mean glorious sunrises. This was taken this morning during my daily sunrise beach walk which is currently hampered by an annoying air cast (stupid car accident -stupid broken foot)…

-be well - Filey