Amazon Calls For Support From Third-Party Sellers Against Antitrust Legislation

Amazon.com, Inc AMZN is urging its third-party sellers to oppose an antitrust bill, which it says could “jeopardize” the company’s ability to operate its service.

What Happened: Dharmesh Mehta, Amazon’s vice president of worldwide selling partner services, wrote a letter to the company’s third-party sellers and elaborated on the company’s opposition to the American Innovation and Choice Online Act. 

Mehta wrote that the bill could “jeopardize Amazon’s ability to operate a marketplace service and, as a result, your business’s ability to sell in our store.”

The Amazon vice president encouraged the Amazon sellers to read a company blog titled, “Antitrust legislation and the unintended negative consequences for American consumers and small businesses.” 

The blog post enunciated Amazon’s opposition to the bill sponsored by Sen. Amy Klobuchar (D-Minn.) in detail. The Jeff Bezos founded company said the proposed legislation “targets'' a handful of companies such as Amazon, Apple Inc AAPL, Meta Platforms Inc FB and Google parent Alphabet Inc GOOGL GOOG.

“In reality, Amazon’s Consumer business (which this proposed legislation is largely aimed at) has much more in common with thousands of other retailers, like Walmart, Target, and Costco, all of which would be mysteriously excluded from the bill’s proposed regulations.”

Mehta asked third-party sellers to join Amazon in opposing the bill and encouraged them to send emails to Senators. He said the Senate leadership ntends to vote on the legislation later in June.

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Why It Matters: The antitrust bill is also backed by Judiciary Committee Ranking Member Rep. Chuck Grassley (R-Iowa). The legislation is aimed at targeting companies who allegedly rank their products higher than rivals in their marketplace to generate more profit. 

Amazon said in the blog that Target Corporation TGT, headquartered in Klobuchar’s home state of Minnesota, is excluded from the provisions of the bill even though it operates an online marketplace for sellers.

The e-commerce giant said it pursued opening up its virtual retail shelves to third-party sellers even though they would compete with its own direct retail business — Amazon called it a bold decision.

The company said there are over half a million U.S. selling partners on Amazon and they are responsible for 1.8 million jobs in the country.

In 2020,  Wall Street Journal reported that Amazon restricted the ability of its large competitors to purchase advertising when their products competed with its own.

Price Action: On Tuesday, Amazon shares closed 1.4% lower at $123 in the regular session and fell 0.5% in the after-hours trading, according to data from Benzinga Pro.

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