Amazon lawyers don't think former and current CEOs should have to testify in FTC investigation
"[The individual hearings are] calculated to serve no other purpose than to harass Amazon's highest-ranking executives"By Cal Jeffrey 14 comments
In context: It's no secret that FTC Chair Lena Khan does not like Amazon. Her academic article "Amazon's Antitrust Paradox" makes it abundantly clear that she views the company as a monopoly or, at the very least, a potential antitrust fiasco. Amazon has taken issue over her stance on multiple occasions. Its latest legal wrangling says her serving of CIDs to executives and calls for individual hearings are nothing but "burdensome harassment" in the FTC's broad-scoped "open-ended" investigation into Amazon Prime.
This week the Federal Trade Commission (FTC) released an August 5 filing by Amazon that looks to excuse former CEO Jeff Bezos and current CEO Andy Jassy from supplying testimony in an investigation. The legal team calls the probe "burdensome" and says that the civil investigative demands (CIDs) served to Bezos and Jassy were intended to harass the executives.
The motion seeks to quash or limit the "Individual CIDs." Amazon feels that holding individual hearings (IHs) for each executive is unnecessary and would not be conducive to the discovery process. The lawyers contend that Bezos and Jassy have no "unique knowledge" of the matters at hand. That is to say that the FTC would get no useful information from them that it could not gather from other personnel or departments at Amazon.
Furthermore, Amazon counsel feels that the CID's "open-ended" list of questions falls well outside the probe's scope.
"Staff's demand that Mr. Bezos and Mr. Jassy testify at an IH (individual hearing) on an open-ended list of topics on which they have no unique knowledge is grossly unreasonable, unduly burdensome, and calculated to serve no other purpose than to harass Amazon's highest-ranking executives and disrupt its business operations," the filing reads.
The document does not go into specifics, but Bloomberg notes that the investigation started back in March 2021 when the FTC began looking into the enrollment and cancelation processes for Amazon Prime. Then in June 2022, it expanded the probe to include five unrelated subscription services, one of which is operated by a third-party provider but is facilitated through Amazon.
"The June 2022 CID is unworkable and unfair, reflecting less of a responsible effort to collect the facts about a variety of longstanding and highly popular subscription programs than a one-sided effort to force Amazon to meet impossible-to-satisfy demands," the lawyers said. "The June 2022 CID 'goes beyond Prime sign-up and cancellation to sweep in at least five additional subscription programs, each with their own unique facts, history, and personnel."
The broad scope and complexity of the inquiries led the legal team to conclude that no witnesses could be reasonably prepared to help in the discovery process in individual hearings. Thus, the FTC's CIDs only amount to the harassment of staff.
Whether the motion to quash will be granted remains to be seen. These challenges are routine in situations like this and often only buy the defendant more time to prepare.
Last year, Amazon filed a motion demanding that newly appointed FTC Chair Lina Khan recuse herself from any proceedings against Amazon on the grounds that she is biased and seeks to break up the company she views as a monopoly by any means. That petition was denied.