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Senator Asks DOJ to Open a Criminal Investigation Into Amazon's Algorithmic Monopoly

Illustration for article titled Senator Asks DOJ to Open a Criminal Investigation Into Amazons Algorithmic Monopoly
Photo: Getty

Of all the pundits currently on the warpath against Big Tech, Republican Senator Josh Hawley might not be the most coherent, but he’s certainly one of the loudest voices on the field. Recent weeks have seen him launch criticism—misplaced or otherwise—on the likes of Apple and Google, TikTok, and at least one federal agency. Now, it looks like he’s set his sights on Amazon.

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In a memo filed by Hawley to Attorney General William Barr earlier today, the Missouri senator asked for a “criminal” case to be opened against the e-commerce giant. The Senator quoted a recent Wall Street Journal investigation that found the ex-Amazon employees admitting to sucking third-party data in order to beef up the company’s own private label products—despite oft-parroted assertions otherwise to lawmakers and reporters alike. According to Hawley, these practices are worthy of an antitrust investigation at best, and some sort of criminal penalty at worst.

The kind of data Amazon can access poses a much greater threat to competition than the data accessible to ordinary retail stores. Brick-and-mortar stores collect data, such as how often third-party products are purchased, when they are purchased, and whether they are purchased in combination with other products.

But online retailers like Amazon can collect so much more data. 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. Amazon’s capacity for data collection is like a brick-and mortar retailer attaching a camera to every customer’s forehead.

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To be fair, these antitrust assertions against Amazon’s use of third party data are nothing new. Back in November, the company admitted to this sort of data collection in right front of the House Antitrust Subcommittee—albeit in its own half-assed way, saying that it uses aggregated data from the platform’s millions of sellers, rather than picking and choosing data from individual sellers at any given time. But when it comes to data—especially in cases like this—distinctions between individuals and aggregate don’t really hold water, since Amazon’s still gutting its marketplace either way. As Hawley writes, “using aggregate data just means that, when Amazon uses data to create copycat products, it harms multiple small businesses instead of just one.”

Hawley’s memo calls Amazon’s data practices an “existential threat,” but the truth is that his claims don’t scratch the half of it. The company’s anticompetitive nature isn’t just happening within its own marketplaces, but across the internet writ large. Thanks to its reams of data on the who, what, and why when it comes to consumer buying, Amazon’s quickly become a challenger to the Facebook and Google-dominated digital ecosystem, pulling in nearly $10 billion dollars in ad revenue last year alone, all built on the collective backs of the consumers who shop on the platform. And those earnings are only going to continue bumping upwards as we do more and more of our shopping online, ceding more and more of our data in the process.

Put another way, the company isn’t just trying to dominate its own economy of on-platform buyers and sellers, but increasingly the economy of our attention and eyeballs once we navigate elsewhere online as well. As far as existential threats go, it’s not the most popular talking point currently being brought against Amazon, but that doesn’t mean it’s one that should slip through regulatory scrutiny.

I cover the business of data for Gizmodo. Send your worst tips to swodinsky@gizmodo.com.

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DISCUSSION

I recently needed to buy some replacement computer parts. Literally the only place that had all (or even most) the parts I needed in stock was Amazon.

I checked Best Buy, NewEgg, B&H, Microcenter, Frys... all the usual suspects... they were just plain out of almost everything I needed. I can usually trust that Amazon will have what I need, at a competitive price, and if I have a problem I don’t worry about getting screwed on the return/exchange.

Also, nothing comes close to AWS in terms of hosting and infrastructure. All their “competitors” are still playing catch-up by copying what they think Amazon is doing. Pro-customer policies work... if other companies took that to heart, they might see similar success.