US investigators interview small businesses as part of Amazon competition inquiry

Investigation suggests scepticism at claims that shoppers and suppliers have real alternatives to Amazon

 

A team of US investigators has begun interviewing small businesses that sell products on Amazon. com to determine whether the e-commerce giant is using its market power to hurt competition.

Several lawyers and at least one economist from the federal trade commission have been conducting interviews that typically last about 90 minutes and cover a range of topics, according to three merchants. All were asked what percentage of revenue their businesses derive from Amazon versus other online marketplaces like Walmart and EBay, suggesting regulators are sceptical about Amazon’s claims that shoppers and suppliers have real alternatives.

The interviews indicate the agency is in the early stages of a sweeping probe to learn how Amazon works, spot practices that break the law and identify markets dominated by the company.

The length of the interviews and the manpower devoted to examining Amazon point to a serious inquiry rather than investigators merely responding to complaints and going through the motions, antitrust experts say.

Amazon shares dropped over 1 per cent in pre-market trading in New York.

“Early in an investigation, that’s a sign of staff doing a serious job,” said Michael Kades, who spent 20 years at the FTC. “They’re spending lots of time with witnesses and trying to really understand what they’re saying.”

Amazon hasn’t disclosed an investigation by the FTC, and the agency rarely confirms scrutiny of individual companies. But chairman Joe Simons told Bloomberg in August that he welcomed hearing from third-party merchants, who now sell more than half of products on Amazon.

Amazon declined to comment and pointed to a statement Consumer Business chief Jeff Wilke made in June when asked about reports that the FTC was looking into Amazon. “We believe that most substantial entities in the economy deserve scrutiny,” he said. “Our job is to build the kind of company that passes that scrutiny with flying colours.” The FTC declined to comment.

The probe is part of a broader examination of the control companies like Amazon, Google and Facebook have over the US economy. The FTC is also investigating Facebook while the justice department is probing Google. Separately, 50 state attorneys general have announced an antitrust probe of Google.

The house judiciary committee is also probing big technology companies. One area of interest is whether Amazon has an unfair advantage over third party merchants when it competes with them to sell similar products on its own platform. – Bloomberg