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The U.S. Federal Trade Commission on Monday rejected Amazon.com Inc’s AMZN bid to quash demands for testimonies from founder Jeff Bezos and CEO Andy Jassy in the federal agency’s probe into unfair practices at the company.
What Happened: The FTC had called for Bezos and Jassy to testify as part of the civil investigative demands issued in June as it probes whether Amazon engaged in “unfair or deceptive acts or practices” in its use of recurring or negative option subscriptions to Prime and other services.
The tech giant dubbed the demands to testify “unduly burdensome and vague” and called for them to be quashed, in an instant petition.
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Rejecting this bid, FTC in its response on Monday said Amazon failed to establish grounds for dismissal of the demands for testimony.
“Amazon provides no reason why the Commission must accept anything less than all the relevant testimony it can obtain from these two witnesses,” the FTC said. “Moreover, the suggestion that the staff must first show a reasonable basis for an investigation or otherwise seek approval to proceed with an investigation has been soundly rejected by the courts.”
“We’re disappointed but unsurprised the FTC largely declined to rule against itself, but we’re pleased that the agency walked backed (sic) its broadest requests and will allow witnesses to choose their own counsel,” an Amazon spokesperson told Benzinga in a written statement.
“Amazon has cooperated with the FTC throughout the investigation and already produced tens of thousands of pages of documents. We are committed to engaging constructively with FTC staff, but we remain concerned that the latest requests are overly broad and needlessly burdensome, and we will explore all our options.”
Why It Matters: The FTC said it started an investigation into whether Amazon violated the Restore Online Shoppers’ Confidence (ROSCA) Act, with the Prime subscription offering — and further expanded the probe in June this year.
The federal agency pointed to a Business Insider article from March that quoted an Amazon employee saying the company has been “deliberately confusing” when allegedly tricking people into signing up for Prime subscriptions.
Bezos founded Amazon in 1994 and, exactly 27 years later, stepped down as the CEO in July 2021.
Price Action: Amazon shares closed nearly 3% lower at $118.54 on Wednesday, according to data from Benzinga Pro, and slumped another 1% in the after-hours session, as markets were disheveled by the Federal Reserve’s rate hike.
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Image and article originally from www.benzinga.com. Read the original article here.