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House Panel Calls on Bezos to Testify on Amazon Third-Party Practices

Amazon has been accused of using sensitive data from third-party sellers to develop competing products. The House has called on CEO Jeff Bezos to address the issue.
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The House Judiciary Committee on Friday called on Amazon.com  (AMZN) - Get Amazon.com, Inc. Report Chief Executive Jeff Bezos to testify about the online retail giant’s private-label practices.

"On April 23, the Wall Street Journal reported that Amazon used sensitive business information from third-party sellers on its platform to develop competing products, contradicting representations that Amazon made to the House Judiciary Committee in sworn written and oral testimony at a hearing on July 16, 2019," the panel said in a statement.

And in a letter to Bezos, the panel said, "if the reporting in the Wall Street Journal article is accurate, then statements Amazon made to the Committee about the company's business practices appear to be misleading, and possibly criminally false or perjurious.”

Former Amazon employees told the Journal that they had regularly accessed data about individual sellers, skirting the company’s policy, and used the information to launch competing products with similar features.

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One specific product that arose from this practice was a popular car-trunk organizer made by a small company called Fortem. Amazon ultimately created its own private-label version based on detailed information about Fortem's sales and expenses, according to the Journal's report.

The practice was referred to internally as “going over the fence,” and employees speaking to the Journal said it happened regularly.

The committee indicated in its letter to Bezos that an appearance before it isn’t optional. “Although we expect that you will testify on a voluntary basis, we reserve the right to resort to compulsory process if necessary.”

Amazon shares recently traded near $2,290, down about 7.5%, amid disappointment with its earnings report from Thursday.