Amazon’s hardware sector not escaping congressional scrutiny – TechCrunch

While much of the congressional consultation on the anti-competitive practices of the big tech giants focused on their core businesses, Amazon’s hardware was also closely inspected during the hour-long interrogation. .

It was a modest but important exchange, as it focused on the scope of the company’s services and how dominance in one area can lead to potentially anti-competitive behavior in another part of the tech giant’s business.

For Jamie Raskin, representative of Maryland, the two bestsellers of Amazon Echo and the Fire TV devices have become targets thanks to recent reporting on the company’s business practices and negotiations for the two devices.

The Echo is the company’s foray into the smart home market, widely regarded as the next major battleground for consumer technology. It’s one of the most widely adopted pieces of Amazon technology and has captured around 60% of the smart home market, according to Raskin.

The congressman hammered Bezos on two points regarding the Echo. The first was the company’s pricing system, where the price of the Echo was much lower than the cost of producing the device, making it almost impossible for other tech companies to compete.

The wide-scale adoption of the Echo has also led Amazon to engage in other anti-competitive behavior, said Raskin, some of which had been described in a previous interview with Colorado representative Ken Buck. citing a Wall Street Journal report that Amazon had used its investment unit focused on its Echo product and its Alexa voice assistant to copy technology from small start-ups.

But beyond its appropriation of the intellectual property of another company, Amazon also used the Echo platform to promote its own products over its competitors when customers used its voice services.

“Is Alexa trained to promote Amazon products?” Raskin asked.

Bezos responded that he wasn’t sure whether Amazon had specifically trained Alexa to use Amazon services by default or to promote the company’s own brand of products, but that he wouldn’t be surprised. “It wouldn’t surprise me if Alexa sometimes promotes our own products,” Amazon CEO said.

Raskin has also taken Bezos to task for the company’s recent negotiations with WarnerMedia, the production studio, streaming service, and network giant. Specifically, he was concerned how negotiations around the distribution of WarnerMedia’s HBO Max service to the company’s Fire TV devices included discussions about Amazon’s access to WarnerMedia productions.

“You are not only asking for financial terms, but also content from Warner Media,” Raskin said. “Is it fair to use your role as gatekeeper in the streaming device market to promote your competitive position in the video streaming market when it comes to content?”

Bezos responded that the negotiations were ‘normal trade’, but Raskin tried to argue that the fire access negotiations were yet another way the company’s influence in a market was affecting its ability. to exert an unfair advantage against a competitor in a different industry.

“You’re basically using your control over people’s lounge access, ”Raskin said. “You use it to get the leverage to get the creative content you want. Are you essentially converting the power of one domain to the power of another domain to which it does not belong? “

Raskin’s comments and line of inquiry were part of an intense questioning that appeared to focus on the so-called topic of the hearings about the anti-competitive and potentially monopolistic power wielded by four of the country’s largest tech companies. Facebook, Apple and Alphabet were all raked in the coals of Congress during question periods, but it seemed that the most sustained criticism of anti-competitive behavior was reserved for Bezos and Amazon.