Senator pushes DOJ to open criminal investigation into Amazon

A senator is pushing the Justice Department to open a criminal antitrust investigation into Amazon.com Inc. after a Wall Street Journal report detailed the company's use of third-party seller data to develop its products.

In a letter addressed to Attorney General William Barr, Sen. Josh Hawley (R., Mo.) urged the Justice Department to probe Amazon's business practices, saying recent reports suggest the company "has engaged in predatory and exclusionary data practices to build and maintain a monopoly." Mr. Hawley said the department should look at Amazon's position as an online platform that also creates products that compete with its third-party sellers.

Last week, on the day the Journal's report ran, a top congressional committee investigating technology companies questioned whether Amazon misled Congress in sworn testimony from July. At the time, an Amazon associate general counsel told Congress: "We don't use individual seller data directly to compete" with businesses on the company's platform.

"Amazon abuses its position as an online platform and collects detailed data about merchandise so Amazon can create copycat products under an Amazon brand. Internal documents and the testimony of more than 20 former Amazon employees support this finding," Mr. Hawley said in the letter Tuesday.

AMAZON SAYS IT DOESN'T USE SELLERS' DATA AFTER WALL STREET JOURNAL STORY

The Journal found that Amazon employees accessed proprietary data about individual sellers on its site to research and develop competing Amazon-branded products, according to documents and interviews with more than 20 employees of the company's private-label business.

Amazon has launched an internal investigation into the matter, and the company said employees using such data to inform private-label decisions would violate its policies. In response to previous antitrust scrutiny, Amazon has said it follows all laws and has emphasized that it accounts for less than 4 percent of the U.S. retail market.

AMAZON SCOOPED DATA FROM ITS OWN SELLERS TO LAUNCH COMPETING PRODUCTS

The Justice Department last year launched a broad investigation of the market power of large technology companies, including Amazon. The Federal Trade Commission, the other agency that enforces U.S. antitrust laws, has also dedicated a team of lawyers in its antitrust office to focus on tech firms.

Officials in both departments have met with Amazon's retail competitors, with the FTC more actively keeping tabs on the company, people familiar with the matter have said. But probes into other tech firms appear to be more advanced. Amazon hasn't disclosed receiving formal investigative inquiries from either the Justice Department or the FTC, as have both Facebook Inc. and Google parent Alphabet Inc.

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An antitrust case, if Mr. Barr decided to launch one, might take years to run its course and would surely meet stiff opposition from the company. Most antitrust enforcement actions are civil, with criminal actions generally limited to overtly anticompetitive actions such as price-fixing. A criminal case could in theory lead to monetary penalties or even jail time for individuals if the government proved they intentionally violated antitrust laws.

Mr. Hawley took office in 2019 and has distinguished himself as one of Washington's harshest critics of large technology firms. During President Trump's "Social Media Summit" bashing Google, Facebook and others at the White House last year, Mr. Trump praised Mr. Hawley and invited him on stage.

Mr. Trump often takes aim at Amazon, questioning the taxes it pays, the rates it pays the U.S. Postal Service and its efforts to win a multibillion-dollar Pentagon cloud-computing contract. He has blamed Amazon founder Jeff Bezos for articles published by the Washington Post, which Mr. Bezos owns. The Post has said its editorial decisions are independent.

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Write to Dana Mattioli at dana.mattioli@wsj.com and Ryan Tracy at ryan.tracy@wsj.com