At Wednesday’s major tech antitrust hearing in the House Judiciary Committee—featuring the CEOs of Amazon, Apple, Facebook, and Google—Amazon CEO Jeff Bezos said he couldn’t promise that the company hasn’t violated its own policies on fair competition with third-party sellers.
At Wednesday’s major tech antitrust hearing in the House Judiciary Committee—featuring the CEOs of Amazon, Apple, Facebook, and Google—Amazon CEO Jeff Bezos said he couldn’t promise that the company hasn’t violated its own policies on fair competition with third-party sellers. Some context: There’s several ways customers get products through Amazon. In some cases, Amazon purchases products in bulk from suppliers at wholesale rates, after which the merchandise is shipped to Amazon warehouses for resale to customers (“first-party” sales). Other third-party merchants instead use Amazon as a digital storefront; some ship the merchandise themselves, while others ship it to the warehouses, after which Amazon fulfills sales, logistics, and customer service. Then there are in-house Amazon brands like Amazon Basics sourced entirely from the company’s own supply chain. Bezos has pointed to the proliferation of third-party sellers on Amazon as evidence that the company isn’t trying to suppress competition in the e-commerce market. That could be a major factor in any antitrust case, as Amazon controls an estimated 38 percent of U. S. e-commerce sales. In April 2019, he said that first-party sales had declined to 42 percent of gross merchandise sales, while third-party sales were 58 percent and increasing every year. However, that defense only works if Amazon is playing fair with independent sellers rather than, say, using underhanded tactics to undercut their businesses. The company says it has a prohibition on collecting anything but aggregated data from third-party sales, but interviews with over 20 former employees by the Wall Street Journal published in April 2020 suggested that it was common practice for Amazon employees to bend or break those rules to gain a competitive edge on the company’s own in-house offerings.
