Amazon

Sen. Josh Hawley Wants a Bogus Criminal Investigation Into Amazon

The lawmaker says that the company's data practices violate antitrust law. They do not.

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Sen. Josh Hawley (R–Mo.) has made opposition to tech companies a hallmark of his tenure on Capitol Hill. Now he has sent a letter to Attorney General William Barr requesting a criminal investigation into Amazon, which the senator claimed is using "predatory and exclusionary data practices to build and maintain a monopoly."

Hawley's renewed ire toward Amazon stemmed from a Wall Street Journal report that the tech behemoth is using data from its third-party sellers to create private-label Amazon brands. The senator calls that proof the company has breached criminal antitrust laws.

Others call it standard operating procedure. 

"It's an extremely common practice," says Alec Stapp, director of technology policy at the Progressive Policy Institute. "When major retailers are developing their own brands, they use all the data available they have. That includes sales data for individual suppliers in their stores or third parties, to see what's selling well and which features customers seem to enjoy." 

Frequent any major department or drug store and you'll find a slew of private-label "off-brand" products developed by the retailer and put in direct competition with the name-brand third-party seller. Trader Joe's has "Trader Jose's" and "Trader Giotto's" meal options. CVS sells private-label hygiene products, makeup, and vitamins, among other items. Nordstrom has its own brand for just about everything, from shoes to handbags to accessories. The list goes on.

Amazon doesn't use the practice particularly prolifically—certainly not when compared to other retail giants. When it comes to retail revenue generated by private labeling, Walmart clocks in at 15 percent, Macy's at 20 percent, and U.S. grocery stores around 19 percent. For Amazon, it's 1 percent.

So why is Hawley zeroing in on the latter? The senator has an explanation, but it's not sufficient: "Brick-and-mortar stores collect data," his letter acknowledges, "but online retailers like Amazon can collect so much more… They can track how long a person's attention lingers on a product, which features attract a person's attention, which images a person views and for how long, and what reviews a person reads." He likens that to a physical store "attaching a camera to every customer's forehead."

Yet many of those same stores have lucrative online marketplaces. Walmart, for instance, spent about $1.18 billion on information technology in 2018—far higher than actual IT companies like Microsoft and Facebook. Amazon spent more, shelling out about $1.37 billion. But that difference is hardly the stuff of which monopolies are made, considering that Amazon's marketplace consists almost entirely of online interaction.

While Hawley's antitrust accusations don't hold water, Amazon isn't necessarily guilt-free. The company's terms of service stipulate that it doesn't scoop information from individual sellers, instead analyzing only aggregate data. There is no legal requirement for it to have such a rule, but it does, and the Journal claims that the company broke that promise. If so, Amazon may have engaged in misrepresentation. Such possible breaches should be investigated—but for the relevant reasons. Allegations of criminal antitrust behavior do not meet that criteria, however, and are grounded more in partisan interests than in reality.

NEXT: Trump's 'National Security' Steel Tariffs Are Just Old Fashioned Protectionism. Here's the Data To Prove It.

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  1. If you can’t use your office to reward your friends, punish your enemies and line your own pockets, what’s the point of even bothering to get elected in the first place?

    1. Hey, giving and taking money from politicians is just like talking to them. Why do you hate the 1st Amendment?

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  2. If Amazon wants to be a distributor, it’s pretty shady to also be a competitor. Other ventures take the risk, they measure it with their analytics internally as distributor, know what works, then take it.

    But yeah, hardly new. Not so sure I’d call them an honest partner though.

    1. As said in TFA, all sorts of retailers are both distributors and competitors. That’s what store brands are — competitors to the other brands they buy wholesale and sell retail. Nothing at all shitty or underhanded about it.

      1. I’m fully aware. There’s a whole documentary about Hershey out there.

        I’m not accusing Amazon of anything specific, and it seems Hawley is having a hard time coming up with something himself.

  3. “Sen. Josh Hawley (R–Mo.) has made opposition to tech companies a hallmark of his tenure on Capitol Hill.”

    See? Another example of what I’ve been saying for the past couple years. The Democrats are now the pro-corporate, pro-billionaire party, while the Republicans have embraced the dumb “eat the rich” attitude that Democrats used to promote back in the 1960s or whenever. This Hawley clown fits right in with the modern GOP.

    I mean, attacking Amazon is especially idiotic. The fact that Jeff Bezos is now worth $143,000,000,000 is one of the very few pieces of good news in this Drumpf economy.

    #LeaveJeffBezosAlone

    1. “Bring in the next one,” Jeff Bezos ordered in a monotone, emotionless voice. OBL entered, their hands trembling with nervousness, clutching a pristine silken towel.
      “Commence,” Bezos ordered.
      OBL swallowed the lump forming in their throat, and approached from behind, to gingerly start polishing Bezos’ head with the silken towel. OBL worked silently, fastidiously, gently, their mind focused only one one thing: picturing wiping urine dribble from the head of Charles Koch’s wrinkly glans.
      “Hmmm, yes,” mused Bezos. “Alexa, hire this one.”

      1. polishing Bezos’ head with the silken towel

        Silk is terrible as a polishing material. Too smooth, no absorption, and what absorption does take place destroys the fabric.

        Synthetic microfiber is pretty standard and some use old cotton cloth diapers but, IMO, brushed fine wool (sheep or alpaca) flannel is the best.

        AFAIK, SF still contributes over at glibertarians.com, maybe he could give you a few tips.

  4. Another illustration of why victim prosecution, and only victim prosecution, is the way to go. Government prosecution leads to victimless crimes and crony protectionism.

  5. What a fucking retard

    1. Couldn’t have said it better myself. I want this guy out of a job like I wanted Harry Reid out of a job.

      1. Agree. Josh Hawley is the Richard Blumenthal of the Republican party. In fact they seem to be in bed together with all their co-sponsored legislation, which tells you all you need to now about him.

  6. Is anyone else experiencing Amazon regulating themselves out of the retail space? Anymore it seems like when I go to Amazon for stuff that’s trademarked I get 2 pages of Chinese crap (cheaper or not) that, even if I did order it, wouldn’t arrive in the next 1-6 mos., if it arrived at all. At this point, Amazon’s more of a ratings site. I browse or make/review shopping lists there but then go buy somewhere else. Like a retail version of del.icio.us or alternativeto.net.

    1. What I have experienced is Amazon selling Chinese knock off products. I think they are commingling the real with the 3rd party items in their warehouses. Then you sometimes get the junk even if Amazon sells it to you. And 3rd party folks are dumpster diving for shit to sell on Amazon. You may have literally bought trash. Finally Amazon puts returned items back for sale as new. I have bought books that were previously read for example. If you complain, they will offer you a discount to avoid the return.

      Basically their practices are shady, their labor management is terrible, and they went right to the bottom in my estimation of quality. And their data practices are not great and they may be violating laws in certain places for data privacy.

    2. Sorta yes I noticed. But I also noticed that during the pandemic they didn’t step up. They slowed down everything. Maybe it’s out of their control so maybe someone can enlighten me. What I don’t like is they completely shut down their customer service office. I had a problem with an order but luckily I reached out to the seller and they made good on it.

      Meanwhile Bezos continues to make money. Amazing.

      1. Louis Rossmann, internet right-to-repair personality seemingly stuck in his home in New York, did a Youtube episode highlighting how CDC-recommended humidifiers were in stock but couldn’t be delivered in less than 7 days, masks were out of stock, sanitizer was out of stock, washing machines couldn’t get delivered in less than 15 days, but if you ordered a dildo, it would get there in 5 days or less for free.

        1. A lot of it has to do with demand. Amazon achieves their fast delivery by having stuff in warehouses all over the country. But when the New York warehouses are all sold out of humidifiers they have to shipped from another warehouse farther away, or even have to come from the manufacturer, taking longer to arrive.

          Since no one is panic-hoarding dildos, however, they are in stock and ready to go

          1. There are more dildos in D.C. than anyone could want. If I don’t want to go that far, there are also plenty in Lansing, and even in City Hall just a couple of miles away.

  7. “Allegations of criminal antitrust behavior do not meet that criteria”

    SAVE OUR LANGUAGE. “Criteria” is the plural of “criterion”. It’s either “do not meet that criterion” or “do not meet those criteria”.

  8. Hawley has shown himself to be a posturing idiot pretty quickly, even for a Senator.

  9. SAVE OUR LANGUAGE. “Criteria” is the plural of “criterion”. It’s either “do not meet that criterion” or “do not meet those criteria”.

    Not that I disagree but you do realize the language you’re talking about saving died ~200 yrs. before ‘our language’ was created, right?

    1. Gee, I dunno. I’m only 72 and MY English teachers taught me “criterion” vs “criteria”. They taught me also “datum” vs “data” and “medium” vs “media”, but I’ve given up on those.

      1. I learned “who” vs. “that” in 4th grade. But my teacher had returned to work late in life, and this battle bothered her because it was already getting lost back then in the 60s.

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