Amazon defends business practices toward third-party sellers at antitrust hearing

A top Amazon executive pushed back on criticism of the e-commerce giant’s policies toward third-party sellers on Tuesday during a heated exchange with the chairman of a House antitrust panel.

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House Rep. David Cicilline, D-R.I., pressed Amazon associate general counsel Nate Sutton on whether the e-commerce giant engaged in a “conflict of interest” in hosting third-party sellers in its marketplace while also selling its own branded products. Amazon has faced allegations of anti-competitive practices in recent months amid concerns that it could use sales data from its third-party platform to develop target product offerings.

Sutton argued that Amazon’s practice of hosting third-party vendors while selling its own products “has been common in the retail industry for decades." He added that Amazon does not use third-party data to push its own products or alter its algorithms to ensure that Amazon products appear higher in the platform’s search function.

“We don’t use individual seller data to directly compete with [third-party sellers],” Sutton said.

Amazon Associate General Counsel Nate Sutton testifies during a House Judiciary subcommittee hearing, Tuesday, July 16, 2019, on Capitol Hill in Washington. (AP Photo/Patrick Semansky)

Sutton resisted the notion that Amazon has a monopoly among U.S. retailers, noting that the company holds a 1 percent share of the global retail market and a 4 percent share of the U.S. retail market. He declined to specify Amazon’s market share in the U.S. e-commerce sector.

Members of the House Judiciary Committee’s antitrust panel questioned whether third-party vendors have a legitimate alternative to Amazon to list their products. Sutton said Amazon views Walmart, eBay and Target as direct competitors for third-party vendors, adding that business owners could also choose to sell their products at brick-and-mortar stores or directly to consumers on their own websites.

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House Rep. Lucy McBath, D-Ill., referenced third-party sellers in her district who had raised concerns that Amazon gave preferential treatment to vendors that utilized “Fulfillment by Amazon,” the company’s packaging and shipping service, for an additional fee. Sutton denied that sellers who opt into the service are treated differently than those who do not.

“It’s an optional service that sellers can use if they want to,” he said.

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Representatives for Amazon, Apple, Facebook and Google testified before the House antitrust panel as it assesses the tech industry’s business practices. U.S. authorities are said to be considering antitrust probes into each of the companies.

Regulators in the European Union are reportedly set to launch an expanded probe into Amazon’s treatment of third-party vendors.