(Bloomberg) Amazon.com Inc. is touting the success of the independent merchants on its site, previewing arguments CEO Jeff Bezos is expected to make next week to a congressional committee.
The Amazon founder is scheduled to testify on Monday, July 27, before a House of Representatives panel probing competition in tech, alongside the top executives at Apple Inc., Alphabet Inc. and Facebook Inc. It will be Bezos’s first appearance before Congress.
Small- and medium-sized U.S.-based sellers averaged more than $160,000 in product sales on Amazon in the year ended May 31, up from about $100,000 during the prior period, the company said in a report released Tuesday. These merchants sold 3.4 billion products during the period, up from 2.7 billion a year earlier.
More products amid the pandemic
A periodic disclosure detailing Amazon’s small-business offerings from seller support to cloud-computing software, the report didn’t offer specific explanations for U.S. merchants’ rapid sales gains. But a spokesman said sellers continue to broaden their product offerings and take advantage of tools Amazon built to help reach customers. Amazon, like many online sellers, also was inundated with orders earlier this year from people sheltering at home as the coronavirus pandemic spread.
Amazon’s positioning as a friend of small business may help blunt criticism that the company abuses its market power. Bezos last year used his closely watched letter to shareholders to highlight the success of third-party sellers. And on Tuesday, global consumer chief Jeff Wilke talked up Amazon’s support for small businesses. “Our success depends on their success,” he said.
But critics say Amazon has used its trove of data on merchants to identify best-sellers and then gin up copycat products. The company says use of data from individual sellers isn’t allowed, but the Wall Street Journal reported earlier this year that Amazon teams found a way around the prohibition. Some merchants also say Amazon uses its clout as the world’s largest ecommerce company to charge ever-rising fees to list and advertise on the site.
In addition to the scrutiny from Congress, Amazon faces probes by the U.S. Federal Trade Commission, the European Commission and the state of California, which are all said to be examining the digital marketplace.
A record $4.38 million spent on lobbying
Amid all the scrutiny, Amazon spent a record $4.38 million on lobbying during the second quarter, according to a spokeswoman, as the ecommerce giant faced increasing antitrust scrutiny in Washington and the challenges of delivering goods to Americans stuck at home during the coronavirus pandemic.
The spending for the three months ending June 30 was up more than 9% from the same period a year ago, and represented a slight increase from its previous record in the first quarter, according to lobbying disclosures filed with Congress.
Amazon—alongside Alphabet Inc.’s Google, Apple Inc. and Facebook Inc.—is facing investigations into whether it abuses its power to stifle competition. At the same time, people increasingly rely on the services that big tech companies provide, such as Amazon’s delivery of essentials, in the midst of lockdown orders. Early during the pandemic, with online sales jumping, Amazon faced holiday-level surges as the company tried to get products to customers and avoid coronavirus outbreaks at its warehouses.