Amazon flagged to Justice Department for possible criminal obstruction of Congress

A U.S. congressional committee is asking the Justice Department to investigate Amazon.com Inc. and some of its executives for what lawmakers say is potentially criminal obstruction of Congress, according to people familiar with the matter and a letter containing the request.

The letter, dated March 9 and viewed by The Wall Street Journal, was sent to U.S. Attorney General Merrick Garland by Democratic and Republican members of the House Judiciary Committee.

The letter accuses the Seattle-based tech giant of refusing to provide information that lawmakers sought as part of an investigation by the body’s Antitrust Subcommittee into Amazon’s competitive practices. The letter alleges that the refusal was an attempt to cover up what it calls a lie that the company told lawmakers about its treatment of outside sellers on its platform.

Amazon couldn’t immediately be reached for comment. In the past, a spokesman has denied that the company or its executives misled the committee and has said that internal policy prohibits using individual seller data to develop Amazon products. Amazon investigates any allegations that the policy might have been violated, the spokesman has said.

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The Justice Department couldn’t immediately be reached for comment.

Throughout the investigation, "Amazon repeatedly endeavored to thwart the Committee’s efforts to uncover the truth about Amazon’s business practices," the congressional letter says. "For this, it must be held accountable." The letter says it is alerting the Justice Department to "potentially criminal conduct by Amazon and certain of its executives," though it doesn’t specify which individuals.

The letter escalates tensions between Amazon and lawmakers who conducted a 16-month antitrust investigation into it and three other tech giants: Apple Inc., Google parent Alphabet Inc. and Facebook, now known as Meta Platforms Inc.

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The investigation produced an October 2020 report that criticized all four companies and has fueled legislative proposals aimed at curbing their power. But the lawmakers’ interaction with Amazon has been particularly contentious, according to people involved, and the new letter makes it the only one of the four companies that Judiciary Committee members have accused of illegal obstruction.

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.

Amazon executives repeatedly told members of the House committee in testimony and written responses that it doesn’t use the data of individual third-party sellers to inform the vast lines of its own brands, and doesn’t privilege its own products in the search results on its platform.

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A Journal investigation published in April 2020, citing internal documents and interviews with former Amazon staffers, found the company’s employees routinely used such seller data to develop products for its own brands. Subsequent reporting from Reuters, Politico and the Markup showed employees using this data and Amazon preferencing its own products in search results. Lawmakers have said they also gained similar information through their own interviews with people including former Amazon employees.

When he appeared before the House Antitrust Committee in July 2020, in what was his first time testifying before Congress, Amazon founder and executive chairman Jeff Bezos said he couldn’t guarantee that its policy was always followed. He agreed to share with members of the panel the results of an internal investigation Amazon was conducting following the Journal article.

Committee members asked Amazon to produce evidence to support its denials, including a report from the investigation Mr. Bezos had referenced. In meetings with congressional staff and written testimony, Amazon or its lawyers refused to produce the investigation report and other documents, according to the letter and people familiar with the matter. Instead, the letter says, Amazon representatives provided broad denials without supporting evidence.

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In October, committee members sent a letter to Amazon Chief Executive Andy Jassy urging the company to provide "exculpatory evidence" surrounding its private-label business practices. Lawyers representing Amazon met with legal counsel for the committee following the letter but didn’t produce the requested evidence, saying the investigation Amazon had conducted was privileged information between attorney and client, according to people familiar with the matter.

Amazon "has refused to turn over business documents or communications that would either corroborate its claims or correct the record," the letter says. "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 was signed by House Judiciary Committee Chairman Jerrold Nadler (D., N.Y.), Antitrust Subcommittee Chairman David Cicilline (D., R.I.) and committee members Reps. Ken Buck (R., Colo.), Matt Gaetz (R., Fla.) and Pramila Jayapal (D., Wash.).

Click here to read more on The Wall Street Journal.