The Federal Trade Commission has accused Amazon.com Inc. (NASDAQ:AMZN) of concealing key evidence in the antitrust case that claims the retail giant abused its market power. As per a new court filing, the FTC says Amazon withheld thousands of non-privileged documents by incorrectly labeling them as protected.
What Happened: Following an order by a federal judge to re-review its privilege claims, Amazon withdrew 92% of them and presented around 70,000 documents it had withheld earlier, according to the Courthouse News Service.
The FTC discovered that around 75% of those had been completely shielded from view. In a small in-camera review, a single sentence out of nine documents was deemed privileged.
One document quoted a top executive calling founder and former CEO Jeff Bezos Amazon’s “chief dark arts officer” when describing the “shady world” of tactics employed to boost Prime subscriptions, the report noted.
Why It Matters: The FTC says these documents were withheld not because they were legally protected, but because they damaging evidence. “In essence, Amazon’s privilege log — on which the FTC has relied throughout discovery — was almost entirely wrong,” the commission wrote in its motion. “It is impossible to square a 92% error rate across tens of thousands of documents with a mere mistake.”
The commission also said that Amazon has a pattern of falsely labeling routine communications as “privileged” and alleged that the company instructs staff to mislabel documents to sidestep regulatory scrutiny. “The blatant nature and ubiquity of these actions demonstrate… a purposeful plan,” the FTC added.
Calling the withheld records “probative, inculpatory, and entirely nonprivileged,” the FTC has asked the court for another 90 days of discovery and for Amazon to bear the resulting costs.
Amazon denies any wrongdoing. A statement from a spokesperson read: “The FTC wants to distract from the facts because the facts don’t support this vague and unprecedented legal case.”
On the meeting notes that reference “dark arts”, the spokesperson said:
“These notes are from a much longer conversation that included discussion about non-Amazon subscription programs. The way Amazon drives Prime subscribers is by making the service useful and valuable. It is correct that an element of driving that value is an art rather than a science. And our approach works – Prime, with hundreds of millions of members, is among the highest performing subscription programs of any kind, as measured by renewal rates and customer satisfaction.”
Amazon is not the only tech giant locking horns with the FTC. Last month, hearings began as part of the FTC’s antitrust lawsuit against Meta.
Amid these high-profile cases, the FTC is also facing a shortage of resources due to cuts enacted by DOGE.
Image Via Shutterstock
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