Documents unearthed by Congress offer new window into Amazon’s war against one-time rival

Amazon CEO Jeff Bezos. (GeekWire File Photo / Kevin Lisota)

Amazon’s aggressive strategy to beat out a competitor a decade ago came back to haunt the company Wednesday in a Congressional hearing with CEO Jeff Bezos and other tech leaders.

Members of the House subcommittee on antitrust grilled Bezos on a heated price war Amazon fought with Diapers.com — and internal documents released by the panel Wednesday provide a window into the e-commerce giant’s strategy at the time.

Amazon viewed Diapers.com parent Quidsi as a top competitor, fearing new parents would be lured in by baby supplies and then become customers of the company’s other verticle, Soap.com.

“These guys are our #1 short term competitor … [W]e need to match pricing on these guys no matter what the cost,” said Amazon executive Doug Herrington in an email released by the committee.

As detailed in Brad Stone’s 2013 book about Amazon, “The Everything Store,” Bezos reportedly threatened to eat massive losses and drive diaper prices to zero in order to win. The company also rolled out a new Prime-like subscription for moms and used other tactics to attract new parents.

“We had already initiated a more aggressive ‘plan to win’ against diapers.com in the diaper/baby space, which includes market-leading pricing on diapers … a free PRIME offering for new Moms, and a structured and marketed ‘Amazon Mom’ program … To the extent this plan undercuts the core diapers business for diapers.com, it will slow the adoption of soap.com,” another email from Herrington says.

Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/Ypvxhm7asA

— House Judiciary Dems (@HouseJudiciary) July 29, 2020

Amazon was willing to lose $200 million in one month, Rep. Mary Gay Scanlon said during Wednesday’s hearing.

Scanlon asked, “Mr. Bezos how much money was Amazon willing to lose on this campaign to undermine Diapers.com?” Bezos said he didn’t recall.

Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/Ucg2RbuATb

— House Judiciary Dems (@HouseJudiciary) July 29, 2020

“They expect to lose lots of money over the txt few yrs-this will make it worse,” said Peter Krawiec, another Amazon VP, in an email released by the subcommittee. “They also expect a lot of their growth to come from soap.com which is unproven and less growth from diapers.”

Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/YAzsU0nq1P

— House Judiciary Dems (@HouseJudiciary) July 29, 2020

Amid the price war, Amazon acquired Quidsi for $545 million only to shut the company down less than seven years later.

“After buying your leading competitor here Amazon cut promotions like Amazon.Mom and the steep discounts it used to lure customers away from Diapers.com and then increased prices of diapers for new moms and dads,” Scanlon said during the hearing. “Mr. Bezos did you personally sign off on the plan to raise prices after Amazon eliminated its competition?”

“I don’t remember that at all,” Bezos replied. “What I remember is we matched competitor prices.”

Though the documents and incident in question date back more than a decade, they’re relevant today as federal lawmakers and regulators consider whether antitrust laws are sufficient in the digital era.

Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg, and Google CEO Sundar Pichai testified alongside Bezos during a hearing that capped off a year-long inquiry into the companies. It’s one of several investigations into the market dominance of Big Tech that could lead to new laws if Congress takes action or penalties by enforcers like the FTC and DOJ.

View the original article here

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Watch: Amazon, Apple, Facebook and Google CEOs testify before Congress in historic antitrust hearing

The top executives at four of the world’s largest and most powerful technology companies are testifying Wednesday before Congress in the culmination of a year-long antitrust inquiry.

The House Judiciary Committee’s antitrust arm will grill Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg, and Google’s Sundar Pichai on the power their companies wield in the tech sector.

“Our founders would not bow before a king nor should we bow before the emperors of a digital economy,” said Rep. David Cicilline, chair of the antitrust subcommittee, in opening remarks.

The executives are testifying remotely due to the ongoing coronavirus threat, creating a different dynamic than the blockbuster hearings of the past, like Zuckerberg’s testimony on election interference in 2018. Cicilline reminded the CEOs that they are not allowed to take input from their teams during testimony, but it isn’t clear how or if the committee is enforcing that rule.

Early questioning focused on Facebook’s acquisition of Instagram, Apple’s treatment of third-party app developers, and Google’s dominance in search. More than an hour into the hearing, lawmakers still hadn’t posed any questions to Bezos, even though it is the Amazon chief’s first time testifying before Congress.

After nearly two hours, the first question for Bezos came from Rep. Pramila Jayapal, a Democrat from Washington who represents Amazon’s hometown, Seattle.

“The issue that we’re concerned with here his very simple,” she said. “You have access to data that far exceeds the sellers on your platform with whom you compete … you have access to the entirety of sellers’ pricing and inventory — information past, present, and future — and you dictate the participation of third-party sellers on your platform, so you can set the rules of the game for your competitors but not follow those rules yourself. Do you think that’s fair to the mom and pop businesses who can sell on your platform?”

Underlying Jayapal’s line of questioning is a Wall Street Journal investigation from April that found Amazon uses detailed data on third-party sellers in its marketplace to inform the development of in-house products.

Bezos said Amazon has a policy prohibiting such use of seller data but, “I can’t guarantee you that that policy has never been violated.”

Jayapal was following up on testimony that Amazon attorney Nate Sutton gave one year ago before the same committee claiming the company does not use individual seller data to inform its private-label product strategy.

Jayapal also grilled Zuckerberg on its acquisition strategy, accusing Facebook of threatening to copy Instagram and Snapchat while in discussions about buying them.

“You’ve used Facebook’s power to threaten smaller competitors and ensure that you always get your way,” she said. “These tactics increase your dominance … Facebook’s model makes it impossible for new companies to flourish successfully.”

Zuckerberg said he did not remember threatening competitors and defended the practice of developing features that consumers were demanding at the time.

Rep. Mary Gay Scanlon raised a controversial price war between Amazon and Diapers.com that ultimately ended in Amazon acquiring the competitor’s parent company and then shutting it down. Scanlon claimed Amazon lowered prices on diapers to drive the competitor out of business and then raised them when the competitive threat was eliminated.

“I don’t remember that at all,” Bezos said. “What I remember is that we matched competitor prices.”

The long-awaited hearing comes as the companies in question field investigations into alleged anti-competitive behavior from regulators in the United States and abroad.

The Federal Trade Commission and Department of Justice have divvied up the four companies as they investigate whether antitrust law has been violated. The House began its own inquiry a year ago and several states are also looking into the dominance of the nation’s largest tech companies.

We’ll be following along and updating this story throughout the day. Check back for highlights and analysis from the historic hearing and read prepared remarks from Bezos, Cook, Zuckerberg, and Pichai.

View the original article here

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Documents unearthed by Congress offer new window into Amazon’s war against one-time rival

Amazon CEO Jeff Bezos. (GeekWire File Photo / Kevin Lisota)

Amazon’s aggressive strategy to beat out a competitor a decade ago came back to haunt the company Wednesday in a Congressional hearing with CEO Jeff Bezos and other tech leaders.

Members of the House subcommittee on antitrust grilled Bezos on a heated price war Amazon fought with Diapers.com — and internal documents released by the panel Wednesday provide a window into the e-commerce giant’s strategy at the time.

Amazon viewed Diapers.com parent Quidsi as a top competitor, fearing new parents would be lured in by baby supplies and then become customers of the company’s other verticle, Soap.com.

“These guys are our #1 short term competitor … [W]e need to match pricing on these guys no matter what the cost,” said Amazon executive Doug Herrington in an email released by the committee.

As detailed in Brad Stone’s 2013 book about Amazon, “The Everything Store,” Bezos reportedly threatened to eat massive losses and drive diaper prices to zero in order to win. The company also rolled out a new Prime-like subscription for moms and used other tactics to attract new parents.

“We had already initiated a more aggressive ‘plan to win’ against diapers.com in the diaper/baby space, which includes market-leading pricing on diapers … a free PRIME offering for new Moms, and a structured and marketed ‘Amazon Mom’ program … To the extent this plan undercuts the core diapers business for diapers.com, it will slow the adoption of soap.com,” another email from Herrington says.

Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/Ypvxhm7asA

— House Judiciary Dems (@HouseJudiciary) July 29, 2020

Amazon was willing to lose $200 million in one month, Rep. Mary Gay Scanlon said during Wednesday’s hearing.

Scanlon asked, “Mr. Bezos how much money was Amazon willing to lose on this campaign to undermine Diapers.com?” Bezos said he didn’t recall.

Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/Ucg2RbuATb

— House Judiciary Dems (@HouseJudiciary) July 29, 2020

“They expect to lose lots of money over the txt few yrs-this will make it worse,” said Peter Krawiec, another Amazon VP, in an email released by the subcommittee. “They also expect a lot of their growth to come from soap.com which is unproven and less growth from diapers.”

Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/YAzsU0nq1P

— House Judiciary Dems (@HouseJudiciary) July 29, 2020

Amid the price war, Amazon acquired Quidsi for $545 million only to shut the company down less than seven years later.

“After buying your leading competitor here Amazon cut promotions like Amazon.Mom and the steep discounts it used to lure customers away from Diapers.com and then increased prices of diapers for new moms and dads,” Scanlon said during the hearing. “Mr. Bezos did you personally sign off on the plan to raise prices after Amazon eliminated its competition?”

“I don’t remember that at all,” Bezos replied. “What I remember is we matched competitor prices.”

Though the documents and incident in question date back more than a decade, they’re relevant today as federal lawmakers and regulators consider whether antitrust laws are sufficient in the digital era.

Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg, and Google CEO Sundar Pichai testified alongside Bezos during a hearing that capped off a year-long inquiry into the companies. It’s one of several investigations into the market dominance of Big Tech that could lead to new laws if Congress takes action or penalties by enforcers like the FTC and DOJ.

View the original article here

from WordPress https://cybersonday689753477.wordpress.com/2020/08/03/documents-unearthed-by-congress-offer-new-window-into-amazons-war-against-one-time-rival/

Watch: Amazon, Apple, Facebook and Google CEOs testify before Congress in historic antitrust hearing

The top executives at four of the world’s largest and most powerful technology companies are testifying Wednesday before Congress in the culmination of a year-long antitrust inquiry.

The House Judiciary Committee’s antitrust arm will grill Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg, and Google’s Sundar Pichai on the power their companies wield in the tech sector.

“Our founders would not bow before a king nor should we bow before the emperors of a digital economy,” said Rep. David Cicilline, chair of the antitrust subcommittee, in opening remarks.

The executives are testifying remotely due to the ongoing coronavirus threat, creating a different dynamic than the blockbuster hearings of the past, like Zuckerberg’s testimony on election interference in 2018. Cicilline reminded the CEOs that they are not allowed to take input from their teams during testimony, but it isn’t clear how or if the committee is enforcing that rule.

Early questioning focused on Facebook’s acquisition of Instagram, Apple’s treatment of third-party app developers, and Google’s dominance in search. More than an hour into the hearing, lawmakers still hadn’t posed any questions to Bezos, even though it is the Amazon chief’s first time testifying before Congress.

After nearly two hours, the first question for Bezos came from Rep. Pramila Jayapal, a Democrat from Washington who represents Amazon’s hometown, Seattle.

“The issue that we’re concerned with here his very simple,” she said. “You have access to data that far exceeds the sellers on your platform with whom you compete … you have access to the entirety of sellers’ pricing and inventory — information past, present, and future — and you dictate the participation of third-party sellers on your platform, so you can set the rules of the game for your competitors but not follow those rules yourself. Do you think that’s fair to the mom and pop businesses who can sell on your platform?”

Underlying Jayapal’s line of questioning is a Wall Street Journal investigation from April that found Amazon uses detailed data on third-party sellers in its marketplace to inform the development of in-house products.

Bezos said Amazon has a policy prohibiting such use of seller data but, “I can’t guarantee you that that policy has never been violated.”

Jayapal was following up on testimony that Amazon attorney Nate Sutton gave one year ago before the same committee claiming the company does not use individual seller data to inform its private-label product strategy.

Jayapal also grilled Zuckerberg on its acquisition strategy, accusing Facebook of threatening to copy Instagram and Snapchat while in discussions about buying them.

“You’ve used Facebook’s power to threaten smaller competitors and ensure that you always get your way,” she said. “These tactics increase your dominance … Facebook’s model makes it impossible for new companies to flourish successfully.”

Zuckerberg said he did not remember threatening competitors and defended the practice of developing features that consumers were demanding at the time.

Rep. Mary Gay Scanlon raised a controversial price war between Amazon and Diapers.com that ultimately ended in Amazon acquiring the competitor’s parent company and then shutting it down. Scanlon claimed Amazon lowered prices on diapers to drive the competitor out of business and then raised them when the competitive threat was eliminated.

“I don’t remember that at all,” Bezos said. “What I remember is that we matched competitor prices.”

The long-awaited hearing comes as the companies in question field investigations into alleged anti-competitive behavior from regulators in the United States and abroad.

The Federal Trade Commission and Department of Justice have divvied up the four companies as they investigate whether antitrust law has been violated. The House began its own inquiry a year ago and several states are also looking into the dominance of the nation’s largest tech companies.

We’ll be following along and updating this story throughout the day. Check back for highlights and analysis from the historic hearing and read prepared remarks from Bezos, Cook, Zuckerberg, and Pichai.

View the original article here

from WordPress https://cybersonday689753477.wordpress.com/2020/08/01/watch-amazon-apple-facebook-and-google-ceos-testify-before-congress-in-historic-antitrust-hearing/

Rep. DelBene forms medical technology caucus in Congress

Rep. Suzan DelBene and Sen. Maria Cantwell speak with Peter Nelsen, a Harborview patient recovering from a stroke, at a telemedicine event in Washington in 2019. (GeekWire Photo / Monica Nickelsburg)

Rep. Suzan DelBene — a Washington Democrat representing a region renowned for its biotech sector — formed a new medical technology caucus this week.

The caucus, launched in partnership with Rep. Fred Upton, will educate Congress on medical technologies to inform policymaking.

“Washington state is home to over 600 medical technology start-ups and businesses making us a powerhouse for the discoveries of tomorrow,” DelBene said in a statement. “This sector not only helps Americans live longer but also live better lives and creates good-paying jobs across the country.”

Throughout her career, DelBene has advocated for modern technology policy, including data privacy regulations and broadband access programs. Last year, DelBene, Sen. Maria Cantwell, and FCC commissioner Jessica Rosenworcel held an event in Washington highlighting the importance of net neutrality and internet access for the future of telemedicine.

Watch DelBene discuss her efforts to expand access to medical technology below.

Address By U.S. Congresswoman Suzan Delbene from Life Science Washington on Vimeo.

View the original article here

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