Amazon has a “bullying” problem.
So insisted PopSockets CEO and inventor David Barnett today while describing his company’s relationship with the e-commerce and logistics giant. Barnett was addressing members of the House Subcommittee on Antitrust, Commercial, and Administrative Law and, over the course of the hearing, laid out how the Jeff Bezos-helmed corporate behemoth had pressured his smartphone accessory company in a manner best described as incredibly shady.
Barnett was joined by executives from Sonos, Basecamp, and Tile, who all took turns airing a list of grievances against major tech players such as Amazon, Apple, Facebook and Google. They all recounted, in manners specific to their respective companies, how the major tech players have used their market dominance to squeeze smaller competitors in allegedly anticompetitive ways.
The CEO of PopSockets, however, appeared to have a personal beef with Jeff Bezos (which he pronounced “Bey-zoo”).
“Multiple times we discovered that Amazon itself had sourced counterfeit product and was selling it alongside our own product,” he noted.
Barnett, under oath, told the gathered members of the House that Amazon initially played nice only to drop the hammer when it believed no one was watching. After agreeing to a written contract stipulating a price at which PopSockets would be sold on Amazon, the e-commerce giant would then allegedly unilaterally lower the price and demand that PopSockets make up the difference.
Colorado Congressman Ed Perlmutter asked Barnett how Amazon could “ignore the contract that [PopSockets] entered into and just say, ‘Sorry, that was our contract, but you got to lower your price.'”
Barnett didn’t mince words.
“With coercive tactics, basically,” he replied. “And these are tactics that are mainly executed by phone. It’s one of the strangest relationships I’ve ever had with a retailer.”
Barnett emphasized that, on paper, the contract “appears to be negotiated in good faith.”
However, he claimed, this is followed by “… frequent phone calls. And on the phone calls we get what I might call bullying with a smile. Very friendly people that we deal with who say, ‘By the way, we dropped the price of X product last week. We need you to pay for it.'”
Barnett said he would push back and that’s when “the threats come.”
He asserted that Amazon representatives would tell him over the phone: “If we don’t get it, then we’re going to source product from the gray market.”
In other words, as with so many things Amazon, it’s either play ball or get bent according to Barnett.
An Amazon spokesperson reached for comment, unsurprisingly, framed the issue differently.
“We sought to continue working with PopSockets as a vendor to ensure that we could provide competitive prices, availability, broad selection and fast delivery for those products to our customers,” read the statement in part. “Like any brand, however, PopSockets is free to choose which retailers it supplies and chose to stop selling directly through Amazon.”
Essentially, in Amazon’s view, PopSockets chose to get bent. We should all be so lucky to be offered such a choice.