Prosecutors Are Investigating Amazon's Treatment of Third-Party Sellers

According to Bloomberg, attorneys general from New York and California are partnering with the FTC to investigate Amazon's online marketplace, in what may be the beginnings of a formal antitrust enforcement action. From a report: The agencies are going to interview witnesses jointly on conference calls over the next few weeks. The news comes after intense questioning over Amazon's Marketplace practices during [last week's landmark Big Tech antitrust hearing]. Rep. Lucy McBath (D-GA) asked CEO Jeff Bezos whether its actions toward Marketplace sellers was a pattern of behavior. She played testimony from a third-party bookseller who believed Amazon had blocked their store, without providing an explanation why, effectively destroying her business. Bezos responded that "third-party sellers in aggregate are doing extremely well on Amazon." The Marketplace platform allows third-party sellers to peddle their wares to Amazon's massive online customer base, accounting for more than half of all of the company's e-commerce sales. Marketplace products are often less expensive -- and sometimes of lower quality -- than other products sold on Amazon. But consumers don't always understand the difference between buying something from a third-party seller versus buying directly from Amazon or one of the company's private-label brands. Amazon's Marketplace has been in the spotlight over the past few months, following a bombshell report in The Wall Street Journal exposing how the e-commerce giant secretly used data it gathered from third-party sellers to launch its own branded products, a practice Amazon executives have denied in the past. At the hearing, Bezos said the company maintains a policy against using seller-specific data but said he could not guarantee that the policy had never been broken.

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