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Has been facing DC for many years

Amazon CEO Jeff Bezos 2019 October 02

Eliph Ozturkas Anadolu Agency Getty images

Amazon CEO Jeff Bezos will finally meet with lawmakers who want to question his company’s growing influence in Wednesday’s antitrust hearing.

A hearing in the House’s Antitrust Subcommittee on the video conference on the coronavirus pandemic will give lawmakers a rare opportunity to find out directly to Amazon’s CEO about Amazon’s market power and business practices and other hot-button, e.g. treatment of warehouse workers during a pandemic.

The CEOs of Apple, Google and Facebook, who will appear on Wednesday, have previously tried to turn around politicians who questioned the power or policy of their companies by appearing on the mountain or, in the case of Apple CEO Tim Cook. , having found common ground with President Trump.

However, Amazon has mostly announced other top executives in previous antitrust hearings with lawmakers, allowing Bezos to stay out. Dave Clark, Amazon̵

7;s senior vice president of retail, Jeff Wilke, Amazon’s general manager of consumer business, and Jay Carney, Amazon’s chief executive and former press secretary to President Barack Obama, press interviews and Twitter sold critics of the company to the company. .

President Trump, meanwhile, angry at Beza-owned Washington Post’s critical reports, has repeatedly criticized the company, accusing it of everything from local tax evasion to fraudulent use of the U.S. postal service. The conflict culminated in January when Amazon filed a formal complaint against the Department of Defense’s decision to award a $ 10 billion cloud computing contract to rival Microsoft. Andy Jassy, ​​head of Amazon Web Services at the time, told CNBC’s John Forttu: “When you have a seated president who wants to be very determined not to like a company and that company’s CEO, it makes it difficult for government agencies, including the DoD, to make objective decisions without fear of retribution.” .

Wednesday’s session will mark Bezos ’first appearance before Congress. But he has steadily increased his presence in the nation’s capital over the years.

2013 After buying the mail, Bezos bought a $ 23 million mansion in the California neighborhood. Over the years, Amazon has chosen the National Landing Site in Arlington, Virginia, a Washington suburb, as the HQ2 location for its second headquarters. Amazon remains one of the best lobbyists among technology companies, and the public policy team has grown in recent years.

Lawmakers follow ‘easy target’

Wednesday’s meeting is likely to draw new attention to the antitrust scrutiny surrounding Amazon, but people familiar with the company’s business practices are still skeptical about whether lawmakers will ask the right questions.

Amazon is facing probes from the Federal Trade Commission, the Department of Justice and state attorneys general, as well as possible antitrust charges in the EU over its treatment of third-party sellers, The Wall Street Journal reported in June.

Amazon’s relationship with third-party vendors has emerged as a major research topic. These vendors fly their products in the Amazon marketplace, which accounts for more than half of the company’s annual revenue, and some have complained about inconsistent policies and unclear company communications over the years.

An earlier WSJ report this year found that Amazon employees used undisclosed or easily identifiable third-party vendor data to develop their competing products, and the Home Antitrust Subcommittee pressured Amazon to respond to data it collects from third-party vendor transactions. what employees have access to transaction data, as well as determining who won each sale and at what price.

The report’s findings appear to contradict the testimony of Amazon general counsel Nate Sutton heard during 2019. July. The hearing. Sutton said Amazon does not use third-party vendor data to help create its own branded goods, but that it takes aggregate data from merchants into account.

David Cicillin, chairman of the House’s antitrust subcommittee, said the report raised suspicions that Amazon may have lied to the committee. The committee then called on Bezos to testify on the matter.

Jason Boyce, a former Amazon seller who is now a consultant to third-party merchants, says he has experienced some of the strategies currently being considered by regulators. Based on information he gathered from meetings with Amazon executives, Boyce said he began to question whether Other teams examined Amazon third-party vendor data. About a decade later, his worries became more personal when Amazon released the private label bocce ball, which turned out to be strikingly similar to his, to a “unique color scheme” designed by the Boyce brand.

Often grocery stores and department stores create their own brands and advertise them to customers. In addition, Amazon claims that private label products account for about 1% of its sales.

Boyce said Bezos will come to a court hearing to compile statistics to try to downplay the importance of Amazon’s private label products on the platform, as well as concerns that they prioritize third-party products in search and rating.

“Bezos will follow Amazon’s standard party line,” Boyce said. “They like to focus on the numerator rather than the denominator of where they are or what they’re doing in the market.”

Ads and “shopping cart”

At Wednesday’s meeting, more complex issues affecting third-party vendors are likely to fly under the radar, given time constraints and the fact that lawmakers may not have all the knowledge they need to understand all the nuances of certain technologies used in the market, Boyce said. For example, he said lawmakers may not be aware of Amazon’s “box-in-refueling” algorithms, which offer customers a one-click button so they can add a list to their shopping cart or make a purchase. This is an important sales engine, but not all third-party traders can get a box in their auctions.

James Thomson, a former Amazon executive and now a partner at Buy Box Experts, said Amazon’s private label business is an “easy target” for lawmakers, but other issues need to be addressed, such as Amazon’s use of customer data. to target ads. also considered.

Thomson said Amazon’s targeted ads were like a “virtual grocery store where you only see the aisles where you bought the product.” He acknowledged that it was unclear whether this access to detailed customer data gave Amazon an advantage over other vendors in the market.

Nevertheless, he said: “It would be interesting to know more about what Amazon’s patented marketing is. It provides itself, but does not give anyone else access to the data, email. Postal campaigns and free advertising space. “

Melissa Burdick, a 10-year-old Amazon veteran who now heads Amazon’s ad-buying technology provider, reiterated that researchers should not forget Amazon’s advertising practices. “Amazon has become a pay-per-game platform because the game needs to appear on the first page of search results,” she added.

In October last year, the Home Antitrust Subcommittee asked Amazon about ad placement on the site and asked if its algorithms favored third-party merchants who purchased ads and other services, whether its private label business paid for sponsored ads, and whether it resulted in advertising space above the purchase box. which can be purchased by third party vendors.

In its responses, Amazon said it is reserving space for more than just private label goods, adding that it “depends on many variables” such as what customers are looking for and the device they are visiting.

“Manufacturers will never publicly say they are upset about Amazon, but when Amazon offers a private label product as a cheaper product, I think that’s the question,” Burdick said. “I think we need to look at what’s fair and then come up with some consistent and standardized rules.”

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