Dive Brief:
- The Federal Trade Commission last week said Amazon must hand over its litigation holds and ephemeral messaging instructions so it can see how much of the company’s internal communication about the agency’s antitrust case against it has been lost to spoliation and whether that spoliation was deliberate.
- “Plaintiffs need these documents to assess whether Amazon failed to take reasonable steps to preserve documents and to map out what information has been destroyed,” the agency says in an April 25 filing with a federal district court in Washington.
- Last year, the agency and 17 state attorneys general sued the company, accusing it of wielding monopoly power to keep prices high while lowering service quality. Amazon is seeking to get the case dismissed.
Dive Insight:
The spoliation issue is crucial because executives talked among themselves about the company’s potentially anticompetitive business practices using the messaging app Signal, which has an auto-delete setting, the FTC says.
“Executives turned on Signal’s ‘disappearing message’ feature, which irrevocably destroys messages, even after Amazon was on notice that Plaintiffs were investigating its conduct,” says the agency, headed by Lina Khan. Khan has made the fight with Amazon a key test of the agency’s antitrust enforcement posture.
It took the company 15 months after it learned of the investigation – and 10 months after it was sent its first preservation letters – to issue notices to employees about preserving their communications.
“It is highly likely that relevant information has been destroyed as a result of Amazon’s actions and inactions,” the agency says.
Company founder and then-CEO Jeff Bezos was “a heavy Signal user” and he wasn't sent a notice to preserve his communications for almost a year after the company was sent its first preservation letters, the agency says.
“Mr. Bezos’ documents and communications were clearly within the scope of the investigation,” the FTC says. “As Amazon’s founder and CEO, he was the ultimate decision-maker.”
In its filing, the FTC suggests the company wasn’t forthright in its response to the preservation letters.
“Amazon claims that it did not learn about its employees’ use of Signal until the summer of 2020, even though Amazon’s top executives, including its General Counsel [David] Zapolsky, had been using Signal since 2019,” the agency says.
Almost three years after Amazon received its first preservation letters, employees were told to switch to an internally created app, Wickr, that enables messages to be saved centrally for individuals on legal hold. But the ephemeral conversations didn’t stop.
“Amazon executives continued to use Signal’s disappearing message feature to destroy records of their internal communications,” the agency says.
In the filing, the agency is asking for all of the company’s litigation holds and preservation notices as well as the instructions it sent to employees about use of the ephemeral messaging apps during the investigation.
The company has pushed back against previous attempts by the agency to get its litigation holds and messaging instructions, saying they’re privileged, but the FTC says it only needs to make a preliminary showing that spoliation has occurred to overcome the privilege defense.
“A preliminary showing of spoliation means only that ‘there is reason for concern that evidence has been lost,’” the FTC says. “Such ‘reason for concern’ can be shown where potentially relevant evidence has been destroyed or where a party failed to take adequate steps to preserve information.”
In a statement, Amazon says the FTC is asking for too much. "The FTC has a complete picture of Amazon’s decision-making in this case,” says Tim Doyle, a company spokesperson.
Doyle says the company has provided some 1.7 million documents, including those involving conversations that were held on messaging apps. In all, the company has provided more than “100 terabytes of data.”
If the court finds the spoliation was deliberate, it can impose severe sanctions on the company.
