The US Senate Small Business Committee is conducting an investigation into Amazon.com Inc. regarding allegations that the company allowed Chinese influence over its online marketplace. According to reports from Bloomberg, Republican committee staff have been probing 'Amazon negligence related to Chinese influence' and have found 'compelling evidence' of these concerns. The investigation follows a Bloomberg News story about an international bribery market involving Amazon employees working in China who sell favors to merchants marketing products on the company's online store. Amazon stock dropped about 2% after-hours on Wednesday following the revelation of the Senate investigation.
Jack Nekhala, a Staten Island inventor who sells products on Amazon, spoke with committee researchers after the Bloomberg story was published. As reported by Bloomberg, Nekhala had recorded multiple conversations with an intermediary who offered to have Amazon employee connections in China perform favors for him in exchange for payment. The committee researcher was particularly interested in how Amazon employees in China could manipulate its online marketplace, according to Nekhala's account. Investigating staff reached out to independent merchants, including Jack Nekhala, who shared recordings of conversations with a broker offering access to Amazon employees in China who could manipulate seller accounts for a fee. Committee researchers showed particular interest in how internal staff in China could sway marketplace dynamics.
Sellers account for approximately 60% of products sold on Amazon, and these merchants have complained for years about arbitrary suspensions and mistreatment by the e-commerce giant. According to Bloomberg reports, these merchants say it's difficult to get Amazon to take their complaints seriously. As a result, some sellers have sought to pay company insiders to help them overturn suspensions and other punishments meted out by Amazon over the years. Due to difficulty resolving issues through official channels, some merchants have turned to third-party intermediaries to bribe company insiders to lift suspensions or restore listings, the report stated. Retail sentiment on Amazon was 'bullish' with 'high' message volumes, though retail investors are closely tracking hyperscaler spending amid Alphabet's Q2 results.
The Senate investigation adds to Amazon's mounting regulatory challenges, including allegations of antitrust violations and deceptive business practices that the company has denied. As reported by Bloomberg, the new probe also expands scrutiny of Amazon's e-commerce business beyond its home market. An Amazon representative declined to provide immediate comment, while press officers for the Senate Small Business Committee did not immediately respond to requests for comment. The congressional inquiry gained momentum following the Bloomberg report detailing an international illicit network where Amazon workers based in China allegedly accepted bribes from merchants in exchange for administrative favors and competitive advantages on the site. The retail giant is already defending itself against separate regulatory challenges, including antitrust lawsuits and enforcement actions over deceptive business tactics.
