Amazon says that its CEO Jeff Bezos will bow to pressure and appear before the House Judiciary Committee, which is investigating anticompetitive behavior in tech. Even though the world's wealthiest man owns a palatial mansion right in the District and thus making an appearance would hardly be inconvenient, his company has thus far pushed back against requests for Bezos to appear before Congress.
Politico reported on Monday the company had agreed to send its CEO to testify if necessary, assuming timing and other demands are met. The lengthy antitrust investigation has already demanded appearances from the CEOs of other major companies in tech, including Facebook, Apple, and Google, all of which willingly sent their leaders to DC.
Amazon is expected to face scrutiny for a range of behavior that has drawn criticism, including the control it wields over independent sellers in its marketplace and the recent revelation that it was using sales data on third-party merchants' products to create its own, lower-cost alternatives that it can promote to customers ahead of competitors, despite previously claiming that wasn't the case.
They'll probably screw it up — Congress has faced its own scrutiny for coming off as unprepared for previous interviews with tech sector leaders. Members' inquiries have included asking Facebook CEO Mark Zuckerberg how the company makes ads, to which he responded, "Senator, we run ads," prompting a clip of the incident to go viral. Another Congressman complained about his Apple iPhone to Google CEO Sundar Pichai.
One hopes that, given the chance to challenge Bezos, members will be better prepared, and display a better grasp of the machinations involved in online retail than displayed when it comes to social media or online advertising.
Amazon warrants scrutiny more than ever — There are plenty of reasons to be concerned about Amazon's concentration of power, especially as the coronavirus has shut down brick and mortar retail and prompted even more people to buy ever more things online, where Amazon is king. The company often likes to note that it only accounts for about 4 percent of overall U.S. retail sales, but online it dominates, accounting for 50 percent of sales. That dominance gives it a huge amount of power, including, in some instances, the ability to decide which third-parties using its platform succeed or fail.
And, of course, Amazon manages to make profit in part by paying its hourly workers the bare minimum while keeping overheads as low as possible. Warehouse workers have been dying from COVID-19 as the company drags its feet on offering better protections and the sick leave it previously promised.
Break it up — Critics have suggested that Amazon's massive e-commerce business should be separated from its highly profitable Amazon Web Services (AWS) cloud storage unit. Amazon would then have to be more competitive and offer its merchants better terms because it wouldn't be able to subsidize its growth with money from AWS.
Another suggestion is splitting off Amazon's global logistics network from its e-commerce website so that any e-commerce website could offer the same next-day delivery services it does. Of course, Amazon will fight any such suggestions aggressively. Investing in its delivery network is part of what's made it the unstoppable force it is today. If that sort of change is going to come, it's going to need to be mandated by Congress. Amazon never makes concessions that could nurture competition voluntarily.
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