Congressional Committee Asks Justice Department To Open Amazon Criminal Investigation

Misleading information on business practices and misused third-party data fuel investigation.

March 10, 2022, Los Angeles, CA – A U.S. congressional committee asked the Justice Department for a criminal investigation of Amazon, claiming “Amazon repeatedly endeavored to thwart the Committee’s efforts to uncover the truth about Amazon’s business practices” and “For this, it must be held accountable.”

An exclusive report by The Wall Street Journal's Dana Mattioli identifies the March 9, 2022 letter sent to U.S. Attorney General Merrick Garland by Democratic and Republican members of the House Judiciary Committee. At issue are Amazon’s responses to lawmakers’ inquiries about how it uses the data of third-party sellers on its platform when creating private-label products and how it treats those Amazon brands in its search results.

The letter further identifies that Amazon “has refused to turn over business documents or communications that would either corroborate its claims or correct the record. And it appears to have done so to conceal the truth about its use of third-party sellers’ data to advantage its private-label business and its preferencing of private-label products in search results -- subjects of the Committee’s investigation.”

The letter is the second such call for the Justice Department to investigate Amazon.com Inc. since lawmakers initiated their 16-month antitrust investigation into Amazon and three other tech giants. Sen. Josh Hawley, R-Mo., asked the Department of Justice to open a criminal antitrust investigation into Amazon in April 2020, focusing on Amazon using private data to push competitors out of business.

The House Judiciary Committee's published bipartisan investigation examined whether these dominant firms engage in anti-competitive conduct, anti-competition practices, and whether existing antitrust laws, competition policies, and current enforcement levels are adequate to address these issues.

Dharmesh M. Mehta, Vice President of Worldwide Customer Trust and Partner Support, represented Amazon before the United States House of Representatives Subcommittee on Consumer Protection and Commerce on March 4, 2020. Mehta is responsible for and leads the team dedicated to preventing fraud, counterfeits, fake reviews, and other forms of abuse from harming Amazon customers, brands, and selling partners. His testimony about Amazon's business practices and behavior is a shocking confirmation of Amazon's reprehensible and manipulative global system of counterfeits, fraud, deception, misrepresentation, and false advertising.

The Subcommittee concluded that Amazon exercises monopoly power over its third-party sellers, bullies its retail partners, and improperly uses third-party data for its strategy for developing and selling its own private-label products. "Our economy and democracy are at stake." Although the companies provided substantial information and numerous documents* to the Subcommittee, they declined to produce certain critical information and crucial documents requested. Their answers were often evasive and non-responsive, raising fresh questions about whether they believe they are beyond the reach of democratic oversight, wrote the chairman.

An Amazon spokeswoman responded to the WSJ, “There’s no factual basis for this, as demonstrated in the huge volume of information we’ve provided over several years of good-faith cooperation with this investigation.”

Several market participants told the Subcommittee that they "live in fear" of the platforms. One said, "It would be commercial suicide to be in Amazon's crosshairs . . . If Amazon saw us criticizing, I have no doubt they would remove our access and destroy our business." Before and concurrent with the Subcommittee's investigation, international and U.S. enforcement authorities also opened antitrust investigations into Amazon's business practices.

There is no doubt that we now live in a time where the law lags far behind technology. As a result, Amazon enables and fosters a marketplace reaching millions of customers, where anyone, including Amazon, can sell just about anything, while at the same time taking little responsibility for their actions and ignoring consumer and seller complaints.

*Editors note: The Subcommittee record includes: 1,287,997 documents and communications; testimony from 38 witnesses; a hearing record that spans more than 1,800 pages; 38 submissions from 60 antitrust experts from across the political spectrum; and interviews with more than 240 market participants, former employees of the investigated platforms, and other individuals, totaling thousands of hours.