One of Amazon’s first employees says the company should be broken up

Paul Davis literally helped build Amazon.com from scratch. Now he says it’s time to tear it apart. Davis, a computer programmer who was Jeff Bezos’ second hire in 1994 before the shopping site even launched, told Recode on Friday that the company should be forced to separate the Amazon Marketplace, which allows outside merchants to sell goods to Amazon customers, from the company’s core retail business that stocks and sells products itself. His reasoning? He’s troubled by reports of Amazon squeezing and exploiting the merchants who stock its digital shelves in ways that benefit Amazon, the company, above all else. Davis’ concerns come as Bezos’ company has come under increased scrutiny from politicians, regulators, and its own sellers, in part over the power it wields over small merchants who depend on the tech giant for their livelihoods. “There’s clearly a public good to have something that functions like the Amazon Marketplace. … If this didn’t exist, you’d want it to be built,” Davis said. “What’s not valuable, and what’s not good, is that the company that operates the marketplace is also a retailer. They have complete access to every single piece of data and can use that to shape their own retail marketplace.” Davis is referring to how Amazon uses data from its third-party sellers to benefit its core retail business, whether it be by scouring these merchants’ best-sellers and then choosing to sell those brands itself, or to create its own branded products through similar means. “They’re not breaking any agreements,” he added. “They’re just violating what most people would assume was how this is going to work: ‘I sell stuff though your system [and] you’re not going to steal our sales.’” Davis’ comments appear to be one of the first times that an early Amazon employee has called for the company to be broken up. Earlier this year, US presidential candidate Elizabeth Warren argued for the same.

And both the US House of Representatives and the Federal Trade Commission are scrutinizing Amazon’s business practices to determine if they are anticompetitive, including its dealings with the hundreds of thousands of merchants who are the backbone of Amazon’s unmatched product catalogue. An Amazon spokesperson sent Recode a statement, which read in part: “Sellers are responsible for nearly 60% of sales in our stores. They are incredibly important to us and our customers, and we’ve invested over $15 billion dollars this year alone—from infrastructure to tools, services, and features—to help them succeed. Amazon only succeeds when sellers succeed and claims to the contrary are wrong. Sellers have full control of their business and make the decisions that are best for them, including the products they choose to sell, pricing, and how they choose to fulfill orders.” Davis’ comments to Recode came after he posted an online comment alongside a New York Times article earlier this week about the challenges sellers face while doing business on Amazon. “For nearly 2 decades Amazon has used its control of its marketplace to strengthen its own hand as a retailer,” Davis wrote. “This should not be allowed to continue.” The Times article highlighted various ways that Amazon allegedly puts pressure on the merchants who are responsible for nearly 60 percent of all Amazon physical product sales, including burying their listings if they are selling the same product for less elsewhere and making it hard for brands that don’t advertise on the site from showing up at the top of search results. (Recode spotlighted similar complaints from sellers in an episode of the Land of the Giants podcast series this summer.)