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Senator Urges Justice Department to Investigate Amazon.com's "Predatory" Methods

By Eric Volkman – Updated Apr 28, 2020 at 5:39PM

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Josh Hawley, a Missouri Republican, is concerned about the retailer's relationships with the third-party sellers on its site.

Amazon.com (AMZN -3.01%) has attracted the wrong kind of attention from a Republican lawmaker who is concerned about its business practices. Sen. Josh Hawley of Missouri on Tuesday sent a formal letter to the Department of Justice (DOJ) requesting that it launch a criminal antitrust investigation of what he terms the retailer's "predatory and exclusionary data practices to build and maintain a monopoly."

Hawley's request comes on the heels of a report in The Wall Street Journal alleging that Amazon culls data from the independent sellers that list products on its site, using it to develop and price Amazon-branded goods it subsequently sells.

An Amazon Go store.

An Amazon Go store. Image source: Amazon.com.

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

A spokesman for the DOJ told Reuters that it was in receipt of the letter, and was reviewing it.

Last year, the DOJ opened a broad investigation into the market positions of the top technology companies. Amazon was one of the targets of the probe.

Addressing the original Journal report, Amazon responded by writing: "[L]ike other retailers, we look at sales and store data to provide our customers with the best possible experience. However, we strictly prohibit our employees from using nonpublic, seller-specific data to determine which private label products to launch."

Nevertheless, the company has started an internal investigation into the matter.

On Tuesday, Amazon's 2.6% share price decline exceeded the slump of the overall stock market, and of numerous other consumer goods companies. 

 

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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