Amazon is pressuring third-party sellers to lobby against a bill that would increase their sales and make it harder for the retail giant to dominate its online marketplace.
Part of a bipartisan legislative package, the American Innovation and Choice Online Act would prohibit Amazon from promoting its own versions of products over other, similar products available on its platform. But in emails to third-party sellers, Amazon claims the legislation would make it impossible to sustain a marketplace, essentially threatening to boot hundreds of thousands of sellers from the platform. The company requests sellers sign up for email updates that will give them "opportunities to communicate directly" with lawmakers.
Amazon has a rocky relationship with its third-party sellers. In February, Orthodox Jewish sellers objected to new rules that would force them to ship products on the Sabbath. Amazon ignored their complaints and pressed through with the changes, forcing some sellers off the platform entirely. Internal documents show Amazon copies third-party products and rigs search results to promote their versions.
In an email to sellers, Amazon claimed the legislation "would jeopardize Amazon's ability to operate a marketplace for sellers, potentially resulting in hundreds of thousands of American small and medium-sized businesses losing access to Amazon’s customers and services." More than 60 percent of products on Amazon are sold by third parties.
It is unclear why Amazon says a move to protect third-party sellers would actually destroy their businesses. The Online Merchants Guild said Amazon's communications were intended to send "an immediate chill throughout the online community."
Rep. Ken Buck (R., Colo.), one of the bill’s cosponsors, told the Washington Free Beacon that the legislation "would not mandate that Amazon kick small businesses off their platform," and would curtail "anticompetitive behavior." Buck called Amazon's attempt to lobby third-party sellers "a gaslight campaign."
Rep. David Cicilline (D., R.I.), the other main House cosponsor, accused Amazon of "conducting a scorched-earth campaign against its own sellers." Sen. Chuck Grassley (R., Iowa), who cosponsored a similar bill in the Senate, told the Free Beacon that claims the bill would hurt third parties were "simply self-serving hogwash."
The American Innovation and Choice Online Act is part of a broader legislative package designed to curtail the power of big tech companies. The package would also bar dominant companies from buying off their smaller rivals and allow users of some social media platforms to take their data to other platforms.