Amazon Shares Tumble 6.4% As House Launches Perjury Probe, Calls Bezos To Testify

After a report in the Wall Street Journal appeared to show that Amazon used data gleaned from third-party transactions and used it to for the company’s own competitive advantage on its platform, the House Judiciary Committee on Friday announced that it was launching an investigation into the company over whether it committed perjury during a Congressional hearing.

Seven bipartisan members of the committee said Friday in a letter to Bezos that if the WSJ’s reporting is accurate, then it would appear that Amazon intentionally misled Congress.

Shares were off 6.4% on the news, adding to the market’s woes during a session where traders are scrambling to cash out on last month’s propulsive gains before the next shoe drops.

The probe will require Amazon CEO Jeff Bezos to testify before Congress, something he has previously resisted.

Bezos is the only CEO of the American Tech “big four” (Amazon, Apple, Google and Facebook) who has never before testified in front of Congress.

Last night, Bezos told Amazon investors to “take a seat”, and insisted that the company would continue to invest in its vast expansion plans despite posting disappointing results.

The WSJ article, which relied on interviews with dozens of former, and a few current, Amazon employees, explains how Amazon illegally used data from third-party sellers to outmaneuver them and take a larger share of sales on its platform – which is supposed to treat all sellers equally in accordance with anti-trust law – for itself. Instead, WSJ’s reporting found that the company regularly used “non-aggregated public data” – ie specific data about rivals’ sales – to inform the company’s own product strategy. In essence, Amazon would copy its most successful competitors then outmaneuver them on its platform. Amazon, to be sure, has denied the reporting. Its PR team is known for vigorously rebutting investigations into the company, especially its workplace culture.

In its statement, the House said this behavior may qualify as “criminal” and also appears to contradict testimony delivered by a senior Amazon lawyer that the company didn’t engage in such activities.

Of course, Amazon is still responsible for a huge percentage of the broader market rebound last month, even if investors didn’t exactly take to the earnings.

But the fact that Democrats are opening this investigation suggests that the bipartisan antipathy toward Amazon is gathering pace more quickly than the public – and perhaps even Mr. Bezos himself – truly understands.

Read the letter below:

2020-05-01 Letter to Amazon… by Zerohedge Janitor on Scribd