The world’s richest man, Jeff Bezos, testified before US Congress members for the first time on Wednesday, July 29, 2020.
Much of the questioning from lawmakers focused on how Amazon competes against the 1.7 million small and mid-sized merchants who sell over Amazon’s e-commerce platform. Amazon boasts that 60 percent of its retail sales now come courtesy of these sellers rather than from Amazon stocking and reselling goods itself.
A big concern has been the data Amazon uses from its own merchants to help inform what products to develop under its own private-label brands, such as Amazon Basics. In April, the Wall Street Journal published a report stating that Amazon employees have used data from individual sellers to help Amazon decide which private-label products to pursue. That contradicts what a top Amazon lawyer, Nate Sutton, told Congress earlier this year when he said that Amazon’s policy is to only use data on a product when there are at least two sellers selling it.
One day after CEO Jeff Bezos testified before Congress, Amazon reported second quarter earnings that beat Wall Street’s expectations. Amazon’s sales hit $88.9 billion, up 41% from the same time last year and beating analyst projections of $81.5 billion. Its earnings per share of $10.30 was nearly $9 higher than analysts’ expectations of $1.46 EPS.
“This was another highly unusual quarter, and I couldn’t be more proud of and grateful to our employees around the globe,” said Jeff Bezos, Amazon founder and CEO. “As expected, we spent over $4 billion on incremental COVID-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand–purchasing personal protective equipment, increasing cleaning of our facilities, following new safety process paths, adding new backup family care benefits, and paying a special thank you bonus of over $500 million to front-line employees and delivery partners. We’ve created over 175,000 new jobs since March and are in the process of bringing 125,000 of these employees into regular, full-time positions. And third-party sales again grew faster this quarter than Amazon’s first-party sales. Lastly, even in this unpredictable time, we injected significant money into the economy this quarter, investing over $9 billion in capital projects, including fulfillment, transportation, and AWS.”
Lawmakers came out swinging against Amazon, Apple, Alphabet and Facebook at Wednesday’s historic antitrust hearing. Notably, it was Amazon CEO Jeff Bezos’ first time testifying to Congress. CNBC’s Deirdre Bosa breaks down his testimony.