Dive Brief:

• The Securities and Exchange Commission has been investigating Amazon's disclosures of some business practices, including around how it uses Marketplace seller data in its own private label business, for more than a year, according to a Wall Street Journal report that cited anonymous sources.
• The SEC's enforcement division, according to the Journal, has sought emails and other communications from "several" senior executives at the company. Amazon did not immediately respond to request for comment.
• A Wall Street Journal investigation from 2020 found that Amazon employees have used third-party seller data from its platform to benefit its own private label products, a practice the company has denied engaging in.

Dive Insight:

Amazon's potential legal and regulatory headaches have been multiplying this year. The Journal's report of an SEC investigation comes just weeks after the House of Representatives' judiciary committee referred Amazon to the Department of Justice for potential criminal investigation. 

In that instance as well, how Amazon and executives talked about use of seller-data from its mammoth e-commerce platform was a main focus. In a letter to the DOJ, committee members cited the Journal's 2020 report to suggest Amazon executives may have lied to Congress during the House's investigation into Amazon and other tech giants' market power and business practices.

Amazon denied those allegations. At the time of the referral, a spokesperson said that there was "no factual basis for this, as demonstrated in the huge volume of information we've provided over several years of good faith cooperation with this investigation."

The original Journal report found that Amazon employees "have used data about independent sellers on the company's platform to develop competing products, a practice at odds with the company's stated policies." The company since has launched an internal investigation but has not shared findings, according to the Journal.

Media reporting on Amazon going back several years has suggested that Amazon in individual instances launched its own products that competed with those of successful sellers. A paper in the Yale Law Journal from early 2017 pointed to that reporting and described the potential antitrust issues in Amazon's dual role as platform and retailer on its online store.

The paper, titled "Amazon's Antitrust Paradox", argued: "In using its Marketplace this way, Amazon increases sales while shedding risk. It is third-party sellers who bear the initial costs and uncertainties when introducing new products; by merely spotting them, Amazon gets to sell products only once their success has been tested. The anticompetitive implications here seem clear: Amazon is exploiting the fact that some of its customers are also its rivals."

The author of that paper, Lina Khan, was an attorney for the House's investigation of Amazon and today sits at the head of the Federal Trade Commission, which reportedly has its own investigation of Amazon going back to the Trump Administration. 

Amazon has denied that there is a conflict of interest present in its platform. Last year, around when some in Congress suggested Amazon Chairman Jeff Bezos (then CEO) and other executives may have lied under oath, Amazon touted the 1.8 million jobs tied to its third-party sellers. When a House subcommittee released a report finding Amazon abused its market power, the company said at the time that the report was flawed and relied on "the false narrative that Amazon's interests are not aligned."