FTC Charges Amazon with Concealing Evidence in Antitrust Investigation

Federal regulators have accused Amazon of systematically concealing incriminating evidence in an antitrust case. The Federal Trade Commission (FTC) claims the company misused privilege claims to shield documents that evidence deceptive practices in favor of its own products and overcharging sellers.

After a federal judge compelled Amazon to reevaluate its claims, the company withdrew 92% of its privilege assertions. It subsequently revealed around 70,000 documents that had been previously withheld. The FTC identified that 75% of these privilege claims—approximately 58,000 documents—were entirely withheld from the court.

The FTC remarked, “Amazon’s privilege log was almost entirely wrong.” The high error rate raises serious doubts about the validity of the company’s claims. In a review of nine withheld documents, the court found only one sentence to be privileged, further complicating Amazon’s position.

The FTC and 17 state attorneys general filed the lawsuit against Amazon in September 2023, alleging that the retailer employed deceptive tactics in its Prime subscriptions. This includes raising prices and manipulating search results to favor paid advertisements or Amazon’s own items. Vermont and Puerto Rico have since joined the legal battle.

Upon reviewing the newly released documents, the FTC highlighted that they were withheld not due to legal privilege, but rather because they contained significant information that could bolster the case. One notable document included remarks from the current CEO of Amazon’s retail division, who referred to subscription tactics as “a bit of a shady world.” He also called former CEO Jeff Bezos the “chief dark arts officer.”

In response, an Amazon spokesperson stated that the cited comment came from a larger discussion about various non-Amazon subscription services. They further emphasized that the company strives to enhance the value of its Prime service.

Some withheld documents indicate that involuntary Prime enrollment became such a known issue that Amazon created a clearer web page in 2018 to address customer mistakes during sign-ups. The FTC alleges that Amazon purposefully shielded these non-privileged documents, some of which were redacted, indicating that legal counsel reviewed them before they were withheld.

The FTC wrote, “The blatant nature of these actions demonstrates that doing so was part of a purposeful plan, not just a series of mistakes.” Additionally, the FTC claims Amazon has an internal protocol for incorrectly marking documents as “privileged and confidential” to block evidence from regulatory scrutiny.

One document included an email from a Vice President directing employees to continue labeling documents and emails, an assertion that contradicts previous testimony denying such practices. The FTC stated that Amazon has deprived them of critical evidence and gained an unfair advantage in the case.

The commission contends that Amazon’s privilege claims lack merit and may indicate an ulterior motive to conceal damaging information. In light of this, the FTC is seeking a 90-day extension for additional discovery and is requesting that Amazon cover any associated costs.

Amazon has vehemently opposed these accusations, framing the FTC’s motions as misrepresentations. They argue that the evidence does not support the “vague and unprecedented legal case.” In March, the FTC also requested a trial delay due to staffing and budget concerns, while Amazon has attempted unsuccessfully to dismiss the antitrust charges.