US Senate panel investigates Amazon over alleged Chinese influence

A US Senate Small Business Committee investigation is examining whether Amazon allowed Chinese influence over its online marketplace, adding to the company's mounting regulatory challenges

By Spencer Soper

 

Amazon.com Inc. is being investigated by the Senate Small Business Committee for allegedly letting China influence the company’s online marketplace, according to a document reviewed by Bloomberg and two people interviewed as part of the investigation. 

Republican committee staff have been probing “Amazon negligence related to Chinese influence and have found compelling evidence,” according to an email a committee researcher sent to a small business owner from Staten Island who provided information to the investigators. The email didn’t cite any specific evidence of Chinese influence.

 

The latest investigation adds to the company’s regulatory challenges, including allegations of antitrust violations and deceptive business practices, which Amazon has denied. The new probe also expands scrutiny of Amazon’s e-commerce business beyond its home market. 

 

 

The committee’s correspondence with the Amazon seller followed a Bloomberg News story about an international bribery market that involves Amazon employees working in China selling favors to merchants who market products on the company’s online store.

 

Jack Nekhala, a Staten Island inventor of a product that keeps sheets on mattresses, spoke with committee researchers after the story was published, he said. He had recorded multiple conversations with an intermediary who offered to have her Amazon employee connections in China do favors for Nekhala in exchange for payment. Nekhala said the committee researcher was particularly interested in how Amazon employees in China could manipulate its online marketplace.

 

Sellers like Nekhala account for about 60% of the products sold on Amazon. Those merchants have complained for years about arbitrary suspensions and other mistreatment by Amazon and say it’s hard to get the e-commerce giant to take their complaints seriously. That’s why some sellers over the years have sought to pay company insiders to help them overturn suspensions and other punishments meted out by Amazon. 

 

An Amazon spokesperson declined to immediately comment. A communications staff member for the Small Business Committee didn’t immediately respond to requests for comment.

 

Another person who commonly works with Amazon sellers said committee researchers contacted him seeking referrals to other merchants who could be interviewed. The person asked to not be identified because they aren’t authorized to discuss the committee’s business.