When Jeff Bezos, the Amazon chief executive officer, world’s richest man and retail disruptor extraordinaire, went to Washington, he still managed to do it on his own turf — cyberspace.
But signing in digitally didn’t help him avoid the heat as lawmakers steered their questioning to Amazon’s complicated relationship with third-party sellers.
At least he wasn’t alone.
Bezos’ tech titan cohort — including Apple ceo Tim Cook, Facebook ceo Mark Zuckerberg and the head of Google parent Alphabet Inc.’s ceo Sundar Pichai — were all there, video calling in to the long-awaited House Judiciary Committee hearing looking into whether the industry is simply too big and influential for everybody’s good and should be curtailed under antitrust regulations. That the four men — who repeatedly thanked their interrogators for their questions — took the hearing very seriously was evidenced by their attire. While Cook, Pichai and Bezos are most often seen in T-shirts, turtlenecks and jeans, on this day they were all clad in dark suits, white or, on Cook, very pale blue, shirts and ties — with only Zuckerberg’s slightly loosened.
It was a Washington versus Silicon Valley square-off that’s been brewing for years and, due to the coronavirus, was held digitally, but followed no less breathlessly.
While Pichai and Zuckerberg drew heat early in the hearing, as representatives drilled down on Facebook’s Instagram acquisition and whether Google robs content from competitors, Bezos avoided fire at first.
But Bezos — who has done more than perhaps anyone else to shape the contours of retail this century and is looking to expand more, including in luxury — came under much more sustained fire soon enough.
Rep. Pramila Jayapal (D., Wash.) took her turn for five minutes of questions, as Amazon’s hometown representative put Bezos on the spot and pressed him on whether Amazon uses data on third-party sellers to give its own products a leg up on its marketplace.
Bezos tried to occupy some kind of a middle ground in his answer, noting the company has policies against that, but that he couldn’t be sure that policy hasn’t been violated, as has been alleged.
If competing retailers listening in started feeling any schadenfreude, that feeling probably passed quickly as Bezos added that Amazon goes beyond the industry standard.
“The fact that we have such a policy is voluntary,” Bezos said. “I think no other retailer has such a policy. We should treat that like any internal policy and if we found someone violated that, we would take action.”
In her turn at the mic, Rep. Lucy McBath, (D., Ga.) said the committee’s investigation has turned up a pattern where third-party sellers feel Amazon is a “bully” that induces “panic” and “fear.”
She pointed to a businesswoman who had a growing textbook business on Amazon that suddenly went away and who was then not acknowledged in a meaningful way even after 500 attempts to connect with the web giant and Bezos personally.
“It does not at all seem like the right way to treat her,” Bezos said. “And I’m surprised. It’s not the systemic approach we should take I can assure you. I don’t understand it, but I would like to understand it better.”
But themes emerged during the hearing, as representatives hammered on the third-party seller issue and whether counting marketplace vendors as both customers and competitors was a conflict of interest.
Bezos noted, “The customer is the one who’s ultimately making the decision” of what to buy and at what price and from whom and maintained that the growth of the marketplace was evidence that many third-party sellers were thriving.
The billionaire, when questioned by Hank Johnson, (D., Ga.), also took on the issue of counterfeits on the Amazon platform and described fakes as “a scourge” that the company was working on.
“I would much rather lose a sale than a customer,” said Bezos, noting shoppers could be scared off if they don’t get the real deal when they shop on Amazon.
But Johnson pressed on, touching on Amazon’s scale and might with an example of a company selling PopSockets that was besieged by knockoffs until the seller agreed to pay for advertising on the platform.
“If those are the facts and someone inside Amazon said, ‘Buy X dollars of ads and we’ll help you with your counterfeit problem,’ that’s unacceptable,” Bezos said.
So it went with Bezos, who made sweeping statements on Amazon’s ambitions and ideals and policies, but was confronted repeatedly with specific examples to the contrary.
A company the size of Amazon will have examples of just about everything in its operations, but the effect was that the representatives in the hearing seemed to have more questions rather than fewer (although it’s also not clear many of the representatives came to the hearing prepared to be swayed).
Bezos started off his testimony, seen in a small thumbnail feed on the picture on the committee’s web site, by addressing his enormous fortune, but with a twist.
“I was born into great wealth,” said Bezos, who was referring to his “loving family” rather than his $179.1 billion net worth, which ranks him as the world’s richest person, according to Forbes.
He followed that kind of folksy line in his prepared remarks and his in-person opening statement, which echoed the tone of his shareholder letters, mixing personal anecdote with a rosy take on how the company puts consumers first, builds up small businesses and has pushed retail to become a better version of itself.
He spoke about his mother, who was 17 when she gave birth to him in Albuquerque, N.M., and his father, a Cuban immigrant who adopted him when he was four, and his grandfather, a rancher who, he said, “taught me that you can take on hard problems. When you have a setback, you get back up and try again. You can invent your way to a better place.”
That is very much Bezos’ narrative for Amazon — one of a company that has invented its way to a better way of conducting retail.
Certainly it’s a way that has helped the company grow dramatically, with revenues last year of $233 billion.
While lawmakers tried to chip away at that narrative, pointing to specific areas of concern — which many people in retail fret over — Bezos in his prepared remarks sought to thread the Amazon story into a larger theme.
Bezos talks regularly about nurturing a “Day One” culture at Amazon, where the company, no matter how big, maintains the vitality of an enterprise just starting out.
“It’s still Day One for this country, and even in the face of today’s humbling challenges, I have never been more optimistic about our future,” Bezos said.
And if the sentiment of many of the lawmakers in the hearings ultimately holds sway, it’s still Day One when it comes to viewing tech through the lens of anti-monopoly laws.