FTC Claims Amazon Destroyed Two Years of Communication Related to Investigation




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The Federal Trade Commission accused Amazon executives of destroying two years of communications in an effort to impede the agency’s investigation into its monopolistic powers, according to details in the complaint that were made public on Thursday.

While the FTC and 17 state attorneys general sued the online retail giant in September, the original complaint included several redacted sections. One such detail included a charge that Amazon leaders used the messaging app Signal’s “disappearing message” feature to delete internal communications despite the FTC instructing Amazon not to do so.

The extra details brings the spotlight back on the investigation, which accuses Amazon of abusing the power of its massive retail platform to manipulate prices and give it an unfair advantage over third-party retailers.

“Plaintiffs (the FTC and state AGs) now ask this Court to put an end to Amazon’s illegal course of conduct, pry loose Amazon’s monopolistic control, deny Amazon the fruits of its unlawful practices, and restore the lost promise of competition,” the complaint read.

Amazon, meanwhile, called the claim “baseless.”

“The FTC’s claim that Amazon and its executives failed to preserve evidence is baseless and irresponsible,” said Amazon spokesman Tim Doyle. “Amazon voluntarily disclosed employee Signal use to the FTC, painstakingly collected Signal conversations from its employees’ phones, and allowed agency staff to inspect those conversations even when they had nothing to do with the FTC’s investigation.”

The unredacted complaint also includes details about “Project Nessie,” an algorithm that the FTC alleges was used by Amazon to manipulate prices. The Wall Street Journal reported on the algorithm last month before the details were revealed to the public. The complaint alleged Amazon used Project Nessie to test how much it could raise prices on products in a way that competitors could follow, making things more expensive than consumers. The FTC called Nessie “a covert operation” that generated more than $1 billion in excess profit for Amazon.

Amazon has previously said that the FTC’s allegations “grossly mischaracterize this tool.”

“Project Nessie was a project with a simple purpose—to try to stop our price matching from resulting in unusual outcomes where prices became so low that they were unsustainable,” said Amazon spokesman Tim Doyle. The project ran for a few years on a subset of products, but didn’t work as intended, so we scrapped it several years ago.”

Amazon has also previously disputed the FTC charges, and has vowed to fight them.

“If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers, and reduced options for small businesses—the opposite of what antitrust law is designed to do,” said David Zapolsky, senior vice president and general counsel for Amazon, back in September. “The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”

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