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‘The world needs large companies as well’: Jeff Bezos in his prepared congressional testimony

In his first ever appearance before the US Congress, Amazon’s CEO will make a pitch that the world needs big companies like Amazon, as much as it needs smaller ones. “There are things small companies simply can’t do. I don’t care how good an entrepreneur you are, you’re not going to build an all-fiber Boeing 787 in your garage,” Bezos plans to tell a House Judiciary panel Wednesday, according to written testimony. In a prepared testimony, Bezos also argues that Amazon is just another company in an otherwise big retail market, and that it has helped create hundreds and thousands of jobs in the US. However, there is one glaring omission in his testimony —  if Amazon uses third party seller data to compete against them on their platform, which is also the root cause of antitrust scrutiny against the company.

Bezos won’t be alone at the congressional hearing, as CEOs of the other three Big Tech companies: Apple’s Tim Cook, Facebook’s Mark Zuckerberg, and Google’s Sundar Pichai will join him in testifying in front of the House Judiciary Committee’s antitrust panel.

Highlights from Bezos’ prepared testimony

’The global retail market is too big’: Bezos will say that the “global retail market we compete in is strikingly large and extraordinarily competitive”, and that Amazon accounts for less than 1% of the $25 trillion global retail market and less than 4% of retail in the US.

“More than 80 retailers in the U.S. alone earn over $1 billion in annual revenue…Every day, Amazon competes against large, established players like Target, Costco, Kroger, and, of course, Walmart—a company more than twice Amazon’s size,” his prepared testimony says. “We also face new competition from the likes of Shopify and Instacart—companies that enable traditionally physical stores to put up a full online store almost instantaneously and to deliver products directly to customers in new and innovative ways—and a growing list of omnichannel business models,” Bezos will say.

‘We help create jobs’: Another argument that Bezos will put forth is that Amazon is an employment creator in the US, and has hired several people who were laid off amid the pandemic. “The very nature of that business is getting products to customers. Those operations need to be close to customers, and we can’t outsource these jobs to China or anywhere else. To fulfill our promises to customers in this country, we need American workers to get products to American customers. When customers shop on Amazon, they are helping to create jobs in their local communities. As a result, Amazon directly employs a million people, many of them entry-level and paid by the hour,” he’ll say.

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Bezos will also tout the fact that Amazon employees make a minimum of $15 an hour, more than double the federal minimum wage. However, his testimony doesn’t specify that those employees got this salary bump following sustained pressure from progressive senators, including Bernie Sanders.

What’s missing from Bezos’ testimony

As pointed out above, the prepared testimony nowhere mentions whether or not Amazon uses insights from third-party sales to make its own products in popular categories, thereby affecting third-party sellers. This is also the most common question he is going to face. Apart from the US, the EU is also expected to initiate an antitrust investigation against Amazon on similar grounds, and in India, local traders’ lobbies have criticised the “malpractices” and “unethical” policies of American e-commerce companies. Besides, a Wall Street Journal report had found out that Amazon’s earlier claim of not looking into third-party seller data for gaining insights was untrue.

Bezos’ testimony is also silent on accusations about its treatment of warehouse workers. While Bezos tom toms Amazon’s job creation, his testimony doesn’t offer any counter to previous claims that it treats its warehouse workers as “robots”.

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