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`IN THE SUPERIOR COURT OF WASHINGTON FOR KING COUNTY
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`MICHELE ROSATI,
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`Plaintiff,
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`NO.
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`COMPLAINT FOR RELIEF PURSUANT
`TO 8 DELAWARE GENERAL
`CORPORATION LAW CODE SECTION
`220 TO COMPEL INSPECTION OF
`BOOKS AND RECORDS
`
`v.
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`AMAZON.COM, INC., a Delaware
`corporation,
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`
`Defendant.
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`
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`Plaintiff Michele Rosati ("Plaintiff") herein alleges, upon knowledge as to herself and
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`her own actions, and upon information and belief as to all other matters, as follows:
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`I.
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`NATURE OF THE ACTION
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`1.1
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`In this action, Plaintiff seeks to enforce her right to inspect certain corporate
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`books and records of defendant Amazon.com, Inc. ("Amazon" or the "Company"), a Delaware
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`corporation, pursuant to title 8, section 220 of the Delaware General Corporation Law Code
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`("Section 220"). Plaintiff is a beneficial stockholder of the Company.
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`1.2
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`On September 22, 2020, Plaintiff sent an inspection demand to the Company (the
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`"Inspection Demand"). The Inspection Demand complied with all the form and manner
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`requirements of Section 220, including that it was accompanied by a power of attorney, an oath,
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`COMPLAINT - 1
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`FILED
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`2021 MAR 18 02:26 PM
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`KING COUNTY
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`SUPERIOR COURT CLERK
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`E-FILED
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`CASE #: 21-2-03591-1 SEA
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`

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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 2 of 46
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`and proof of Plaintiff's current ownership of Amazon stock. The Company received the letter
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`on September 23, 2020.1
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`1.3
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`In the Inspection Demand, Plaintiff explained that she wishes to investigate
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`potential wrongdoing occurring at the Company, including potential breaches of fiduciary duty.
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`Plaintiff has legitimate concerns as to whether Amazon violated the Illinois Biometric
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`Information Privacy Act ("BIPA") and whether the Company was engaging in antitrust
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`violations.
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`1.4
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`The Inspection Demand provided ample evidence of such possible wrongdoing
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`and mismanagement at Amazon. Concerning BIPA, the Inspection Demand explained that
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`Amazon had been developing facial recognition software for years and purchased International
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`Business Machines Corporation's ("IBM") "Diversity in Faces" dataset in 2019 to improve this
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`software. In developing this facial recognition software, Amazon collected, stored, and used
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`individuals' biometric identifiers without ever informing those before, a direct violation of
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`BIPA.
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`1.5
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`Regarding Amazon's anticompetitive violations, the Inspection Demand again
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`contained detailed information how the Company uses third-party seller data it has access to as
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`an effective middleman to develop its own competing suite of products. The Company then
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`undercuts the third-party on price. Amazon's anticompetitive actions have led to investigations
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`by, at a minimum: (i) the U.S. Congress; (ii) the European Union; (iii) the State of California;
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`and (iv) the State of Washington. Accordingly, Plaintiff has ample reason to suspect
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`wrongdoing at Amazon, more than satisfying the credible basis standard necessary to justify the
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`inspection.
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`1 True and correct copies of the Inspection Demand and proof of delivery are attached hereto as Exhibit A and B, respectively.
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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 3 of 46
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`1.6
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`On October 19, 2020, the Company's counsel responded to Plaintiff's Inspection
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`Demand with a short perfunctory two-and-a-half-page rejection. The rejection letter did;
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`however, state Amazon was willing to discuss making a production to Plaintiff.
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`1.7
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`Over the next three months, Plaintiff attempted to reach a resolution with the
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`Company. Unfortunately, Amazon steadfastly insisted on including in a nondisclosure
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`agreement draconian terms that would prevent Plaintiff from bringing certain of her claims
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`derivatively and otherwise waiving her rights. Despite providing directly on point authority that
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`Amazon's position was untenable and contrary to the law, it did not move. Further, Amazon
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`never stated what documents it was willing to allow Plaintiff to inspect.
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`1.8
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`On February 1, 2021, Amazon stated that it would "follow up" with Plaintiff that
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`week about her Inspection Demand. Instead, she has been met with silence. It has now been
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`approximately six months since Plaintiff sent the Inspection Demand and she is apparently no
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`closer to reviewing the demanded books and records. Amazon's actions have effectively denied
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`Plaintiff her statutory rights.
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`1.9
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`In light of Amazon's effective refusal, Plaintiff now respectfully asks the Court
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`to order Amazon to produce the demanded books and records that she is entitled to review as a
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`stockholder of the Company.
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`II.
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`JURISDICTION AND VENUE
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`2.1
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`This Court retains general jurisdiction over each named defendant who is a
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`resident of Washington. Additionally, this Court has specific jurisdiction over each named
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`nonresident defendant because these defendants maintain sufficient minimum contacts with
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`Washington to render jurisdiction by this Court permissible under traditional notions of fair play
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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 4 of 46
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`and substantial justice. Amazon is headquartered in Washington. Finally, exercising
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`jurisdiction over any nonresident defendant is reasonable under these circumstances.
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`2.2
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`Venue is proper in this Court because defendant Amazon maintains executive
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`offices in this County, a substantial portion of the transactions and wrongs complained of
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`herein, including the defendant's primary participation in the wrongful acts detailed herein
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`occurred in this County, and defendant has received substantial compensation in this County by
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`doing business here and engaging in numerous activities that had an effect in this County.
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`III. THE PARTIES
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`3.1
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`3.2
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`Plaintiff Michele Rosati is an owner of Amazon's common stock.
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`Defendant Amazon is a Delaware corporation with principal executive offices
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`located at 410 Terry Avenue North, Seattle, Washington.
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`IV.
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`THE COMPANY'S UNAUTHORIZED COLLECTION OF INDIVIDUALS'
`INFORMATION VIOLATES THE LAW
`
`
`Biometrics and Facial Recognition Technology
`
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`4.1
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`Biometrics is the technical term for measurements used to identify people's
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`unique physical characteristics. Examples of biometric identifiers include an individual's DNA,
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`fingerprints, irises or retinas, voiceprints, and facial geometry. The uniqueness and potential
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`permanence of biometric identifiers present an advantage for businesses to accurately identify
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`and distinguish individuals. Businesses presently use biometrics in a wide variety of
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`applications, including data collection.
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`4.2
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`One technological application of biometrics is facial recognition software.
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`Facial recognition software uses biometrics to map facial features from a photograph or video.
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`In particular, the software uses an algorithm that calculates a unique digital representation of the
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`face based on the geometric relationship of a person's facial features (such as the distance
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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 5 of 46
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`between their eyes, ears, and nose), creating a face signature or map. The software then
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`compares the information with a database of known faces to find a match.
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`4.3
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`Facial recognition technology has seen steady improvement over the past decade.
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`Lower costs and increased accuracy have allowed companies such as Amazon to deploy
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`increasingly sophisticated facial recognition software in their applications. However, this
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`increased sophistication has raised serious privacy concerns. Biometrics present potential
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`privacy threats to the individual if compromised, such as a heightened risk for identity theft.
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`During a U.S. Senate hearing in 2012 on the use of facial recognition technology, Senator Al
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`Franken noted that "[o]nce someone has your faceprint, they can get your name, they can find
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`your social networking account, and they can find and track you in the street, in the stores that
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`you visit, the Government buildings you enter, and the photos your friends post online." He
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`added, "facial recognition technology can allow others to access all of that information from a
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`distance, without your knowledge and in about as much time as it takes to snap a photo."
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`Faceprints can even be used to identify protesters at political rallies and "target them for
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`selective jailing and prosecution, stifling their First Amendment rights."
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`4.4
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`The U.S. Federal Trade Commission ("FTC") has also noted the public's
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`concerns over privacy in social networks that "databases of photos or biometric data may be
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`susceptible to breaches and hacking." The FTC urged companies using facial recognition
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`technology to ask for consent before collecting biometric information from a photo. In its best
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`practices guidelines, the FTC addressed social networks in particular, stating, "before using
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`facial recognition to identify an individual it could not otherwise identify, the company should
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`obtain the affirmative express consent of the individual in the image."
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`/ / /
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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 6 of 46
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`The Illinois BIPA
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`4.5
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`In 2008, the Illinois General Assembly enacted the Illinois BIPA to enhance the
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`state's "limited State law regulating the collection, use, safeguarding, and storage of
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`biometrics[.]" 740 Ill. Comp. Stat. §14/5(e). BIPA defines a "biometric identifier" as including
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`a "scan of hand or face geometry." 740 Ill. Comp. Stat. §14/10. The legislature noted that
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`"[b]iometrics are unlike other unique identifiers that are used to access finances or other
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`sensitive information," because while social security numbers can be changed if compromised,
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`biometric data are "biologically unique to the individual," and "once compromised, the
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`individual has no recourse, is at heightened risk for identity theft, and is likely to withdraw from
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`biometric-facilitated transactions." 740 Ill. Comp. Stat. §14/5(c).
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`4.6
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`Under BIPA, companies must have a public, written policy establishing a
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`retention schedule for biometric identifiers and information and guidelines for their permanent
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`destruction. Moreover, a company may not collect or otherwise obtain a person or a customer's
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`biometric identifier or biometric information without informing the subject in writing and
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`securing a written release. Nor may a company profit from an individual's biometric identifiers
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`and information. In particular, section 14/15(a)-(c) of BIPA provides:
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`A private entity in possession of biometric identifiers or biometric
`a)
`information must develop a written policy, made available to the public,
`establishing a retention schedule and guidelines for permanently destroying
`biometric identifiers and biometric information when the initial purpose for
`collecting or obtaining such identifiers or information has been satisfied or within
`3 years of the individual's last interaction with the private entity, whichever
`occurs first. Absent a valid warrant or subpoena issued by a court of competent
`jurisdiction, a private entity in possession of biometric identifiers or biometric
`information must comply with its established retention schedule and destruction
`guidelines.
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`No private entity may collect, capture, purchase, receive through trade, or
`b)
`otherwise obtain a person's or a customer's biometric identifier or biometric
`information, unless it first:
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`COMPLAINT - 6
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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 7 of 46
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`1) informs the subject or the subject's legally authorized representative in
`writing that a biometric identifier or biometric information is being
`collected or stored;
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`2) informs the subject or the subject's legally authorized representative in
`writing of the specific purpose and length of term for which a biometric
`identifier or biometric information is being collected, stored, and used; and
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`3) receives a written release executed by the subject of the biometric
`identifier or biometric information or the subject's legally authorized
`representative.
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`No private entity in possession of a biometric identifier or biometric
`c)
`information may sell, lease, trade, or otherwise profit from a person's or a
`customer's biometric identifier or biometric information.
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`The Gender Shades Study
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`4.7
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`Facial recognition software algorithms that are trained with biased data can result
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`in algorithmic discrimination.2 This, in turn, can lead to facial recognition products that are less
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`effective at identifying certain types of faces. For example, an algorithm trained on dataset that
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`underrepresents a group or subgroup (such as women or people of color) will have a higher rate
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`of error in identifying members of those groups or subgroups.
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`4.8
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`In or around February 2018, researchers from the Massachusetts Institute of
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`Technology and Microsoft Research released the Gender Shades study. In Gender Shades, the
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`researchers analyzed three commercial facial recognition products and focused on each
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`product's ability to accurately identify gender. They noted that prior studies had shown that
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`"machine learning algorithms can discriminate based on classes like race and gender.
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`2 See Buolamwini and Gebru, Gender Shades: Intersectional Accuracy Disparities in
`Commercial Gender Classification, Proceedings of Mach. Learning Research 81:1-15, at 1
`(2018), http://proceedings.mlr.press/v81/buolamwini18a/buolamwini18a .pdf ("Gender
`Shades").
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`COMPLAINT - 7
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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 8 of 46
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`4.9
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`The Gender Shades study determined that each product more accurately
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`classified males than females, and light-skinned individuals than dark-skinned individuals. One
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`product's error rate for classifying dark-skinned females was as high as 20.8%. The researchers
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`concluded that "most improvement is needed on darker females specifically. More broadly, the
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`error gaps between male and female classification along with lighter and darker classification
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`should be closed."
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`4.10
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`In a follow up to Gender Shades, researchers examined the accuracy of
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`Amazon's Rekognition biometric facial technology as compared to the technologies examined
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`in the original study. The updated study found that Rekognition had an error rate of 31.37% for
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`identifying dark-skinned females, as opposed to an error rate of 0% with respect to identifying
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`light-skinned males.3
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`4.11
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`In recent years, an "arms race" has developed amongst for-profit companies
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`seeking to become market leaders in the facial recognition arena. Critical to winning this battle
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`has been the ability to claim a low identification error rate, in particular for these companies to
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`herald the accuracy of their products, especially for identifying women and people of color.
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`Flickr and IBM's Collection of Biometric Identifiers and Information
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`4.12 Flickr, previously owned by Yahoo! Inc., is a photo-sharing website that had
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`access to over 100 million photographs posted by its users. In or around 2014, Flickr compiled
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`these photographs into a single dataset (the "Flickr Dataset"), and made it publicly available.
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`However, Flickr did not inform or receive the consent of the individuals who uploaded the
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`3 See Raji and Buolamwini, Actionable Auditing: Investigating the Impact of Publicly Naming
`Biased Performance Results of Commercial AI Products, Ass'n for the Advancement of
`Artificial Intelligence (2019), https://dam-prod.media.mit.edu/x/2019/01/24/AIES-
`19_paper_223.pdf.
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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 9 of 46
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`photographs or those who appeared in the photographs. Notably, the Flickr Dataset contained
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`images of Illinois citizens and residents.
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`4.13
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`In the wake of the publication of the Gender Shades study, companies felt
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`pressured to improve their accuracy of their facial recognition products and reduce the bias
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`therein. In or around January 2019, IBM announced the release of its Diversity in Facesa
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`new dataset consisting of one million images culled from the Flickr Datasetfor the purpose of
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`improving the ability of facial recognition systems to fairly and accurately identify all
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`individuals (the "Diversity in Faces Dataset.").4
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`4.14
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`In creating the Diversity in Faces Dataset, IBM scanned the facial geometry of
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`each image and created a "comprehensive set of annotations of intrinsic facial features that
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`includes craniofacial distances, areas and ratios, facial symmetry and contrast, skin color, age
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`and gender predictions, subjective annotations, and pose and resolution." Notably, IBM did not
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`seek or receive permission from those who uploaded their photographs to Flickr to include their
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`images in the Diversity in Faces Dataset, let alone to perform scans of their facial geometries or
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`obtain or profit from their biometric identifiers and information. In or around April 2019, IBM
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`published a research report describing its Diversity in Faces Dataset and making clear that the
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`dataset contained the biometric identifiers and information of each individual who appeared
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`therein.5
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`4 See John R. Smith, IBM Research Releases "Diversity in Faces" Dataset to Advance Study of
`Fairness in Facial Recognition Systems, IBM (Jan. 29, 2019), https://www.ibm.com/blogs/
`research/2019/01/diversity-in-faces/.
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`5 Michele Merler, et al., Diversity in Faces, IBM Research AI (Apr. 10, 2019),
`https://arxiv.org/pdf/1901.10436.pdf.
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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 10 of 46
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`4.15
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`In addition, IBM made the Diversity in Faces Dataset available to other for-profit
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`companies that developed, produced, marketed, sold, or otherwise used facial recognition
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`products and technologies in connection with their businesses. Once granted access by IBM,
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`the company seeking access had to download the Diversity in Faces Dataset through a link
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`provided by IBM. This downloaded information included the biometric identifiers and
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`information extracted from each photograph in the dataset, and links to each photograph on
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`Flickr. From the Flickr links, the companies were able to identify the Flickr user who uploaded
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`the photograph to Flickr, that user's homepage and other posted material, and each photograph's
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`metadata, including any available geo-tags relating to where the photograph was taken or
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`uploaded.
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`Amazon Collects and Stores Biometric Data from Its Users
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`4.16 Amazon's core facial recognition product is Rekognition, which launched in
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`November 2016. Rekognition allows users to match new images of faces with existing, known
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`facial images "based on their visual geometry, including the relationship between the eyes, nose,
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`brow, mouth, and other facial features." Rekognition is a cornerstone of many of Amazon's
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`largest consumer products and services, including its photo platform, Amazon Photosits smart
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`home systems and cameras, and its virtual assistant technology, Alexa.
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`4.17 Amazon is also the largest provider of facial recognition technology to law
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`enforcement agencies. The Company has marketed its Rekognition software to agencies such
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`as the U.S. Immigration and Customs Enforcement and the Federal Bureau of Investigation, to
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`monitor individuals they consider "people of interest." Amazon has also partnered with more
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`than 1,300 law enforcement agencies, allowing them to use footage from their Ring home
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`security cameras in criminal investigations. Amazon has expanded these efforts marketing their
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`COMPLAINT - 10
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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 11 of 46
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`facial recognition software to government agencies despite warnings from consumers,
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`employees, members of Congress, and stockholders.
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`4.18
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`In July 2018, the American Civil Liberties Union of Northern California
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`("ACLU") published the results of a study it conducted regarding Rekognition's accuracy.6
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`According to the study, Rekognition incorrectly matched twenty-eight members of the U.S.
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`Congress to people who had been arrested for a crime. The false matches disproportionately
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`involved people of color. That summer, nearly seventy civil rights and research organizations
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`wrote a letter to Amazon's Chief Executive Officer, Jeffrey P. Bezos ("Bezos"), demanding that
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`Amazon stop providing facial recognition technology to governments. In their letter, they
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`called the Company to "stand up for civil rights and civil liberties," stating "Rekognition is a
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`powerful surveillance system readily available to violate rights and target communities of
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`color." Amazon's own employees demanded the Company to stop selling its Rekognition facial
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`recognition software to law enforcement, citing concerns over the "unique threat to civil rights
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`and especially to the immigrants and people of color under attack by [President Donald J.
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`Trump's] administration."7
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`4.19 Seeking to improve the accuracy of its facial recognition products and
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`technologies, Amazon allegedly obtained IBM's Diversity in Faces Dataset after IBM made it
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`available to for-profit companies in early 2019. To do so, Amazon used the links provided by
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`IBM to download or otherwise obtain from the Flickr Dataset each photograph in order to
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`6 Jacob Snow, Amazon's Face Recognition Falsely Matched 28 Members of Congress with
`Mugshots, ACLU.org (July 26, 2018), https://www.aclu.org/blog/privacy-
`technology/surveillance-technologies/amazons-face-recognition-falsely-matched-28.
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`7 Kate Conger, Amazon Workers Demand Jeff Bezos Cancel Face Recognition Contracts with
`Law Enforcement, GIZMODO (June 21, 2018), https://gizmodo.com/amazon-workers-demand-
`jeff-bezos-cancel-face-recognitio-1827037509.
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`COMPLAINT - 11
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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 12 of 46
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`associate the biometric identifiers and information provided by IBM with the actual
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`photographs to which the biometric data related. Amazon's collection and use of the Diversity
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`in Faces Dataset allowed it to profit from such data by allowing Amazon to improve the
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`effectiveness of its own facial recognition technology and products.
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`Amazon's Collection and Storing of Biometric Data Violates BIPA
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`4.20
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`In direct violation of BIPA, the Company stored its users' biometric information
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`without informing them or securing their written consent. The Company has also failed to
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`develop a written policy, made available to the public, establishing a retention schedule and
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`guidelines for users to permanently destroy biometric identifiers when the initial purpose for
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`collection has been satisfied. As such, the Company has violated the express language of BIPA.
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`4.21 These violations have exposed the Company to substantial harm. On July 14,
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`2020, a federal consumer class action lawsuit was filed on behalf of Amazon users in the U.S.
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`District Court for the Western District of Washington alleging that Amazon unlawfully obtained
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`and stored their biometrics information and identifiers (the "Consumer Class Action"). The
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`Consumer Class Action asserted causes of action under section 14/15(b)-(c) of Chapter 740 of
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`the Illinois Compiled Statutes. Specifically, the plaintiffs asserted that Amazon never informed
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`them, by written notice or otherwise, that Amazon collected, stored, and used their biometric
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`identifiers and information, or of the specific purpose and length of term for which their
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`biometric identifiers were being collected, stored, and used. Nevertheless, when the plaintiffs
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`uploaded photos to their accounts, Amazon extracted from those photos their biometric
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`identifiers and stored them in its databases.
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`/ / /
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`/ / /
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`COMPLAINT - 12
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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 13 of 46
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`4.22
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`In a similar action concerning BIPA violations, Facebook, Inc. had to pay $650
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`million to settle the matter.8
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`V.
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`THE COMPANY'S ANTICOMPETITIVE PRACTICES
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`5.1
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`Plaintiff is also seeking to investigate whether Amazon's fiduciaries authorized
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`or allowed the Company to engage in anticompetitive practices, leading to U.S. and
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`international regulatory scrutiny. Amazon is one of the world's largest online marketplaces.
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`Amazon has a dual role as an online platform: it sells products on its website as a retailer and
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`also provides a marketplace where independent sellers can sell products directly to consumers.
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`No other U.S. retailer operates a marketplace even close to the size of Amazon's. Over the past
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`few years, Amazon's market share in U.S. online commerce has increased to about 40%, which
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`is about seven times more than the next competitor.
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`5.2
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`The Company makes and sells its own products to compete with brand names on
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`its own platform. Amazon's private-label business encompasses more than forty-five brands.
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`5.3
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`The Company currently faces significant regulatory inquiries into its practices,
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`specifically over whether it unfairly uses its size and platform against competitors and other
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`sellers on its site. Amazon disputes that it abuses its power and size.
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`The European Union Investigates the Company's Anticompetitive Practices
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`5.4
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`In or around September 2018, the European Union's ("EU") top antitrust
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`enforcer, the European Commission, began examining whether Amazon abused its dual role as
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`a seller of its own products and a marketplace operator.9 The European Commission also
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`8 Patel v. Facebook, Inc., No. 3:15-cv-03747 (N.D. Cal.)
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`9 This fact-finding mission stems from the European Commission's e-commerce sector inquiry
`into business practices that may restrict competition, beginning in May 2015. The European
`Commission published its findings from the initial inquiry in May 2017.
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`COMPLAINT - 13
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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 14 of 46
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`examined whether the Company was gaining a competitive advantage from the data it gathers
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`on third-party sellers, as Amazon continuously collects data about sellers' activity on its
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`platform.
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`5.5
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`In September 2019, the European Commission opened a formal antitrust
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`investigation to assess whether Amazon's use of sensitive data from independent sellers on its
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`marketplace breached EU competition rules. The EU has strict competition rules on
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`anticompetitive agreements between companies and on the abuse of a dominant position.
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`Commissioner Margrethe Vestager, in charge of competition policy, stated:
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`European consumers are increasingly shopping online. E-commerce has boosted
`retail competition and brought more choice and better prices. We need to ensure
`that large online platforms don't eliminate these benefits through anti-competitive
`behaviour. I have therefore decided to take a very close look at Amazon's
`business practices and its dual role as marketplace and retailer, to assess its
`compliance with EU competition rules.
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`5.6
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`As part of its investigation, the European Commission looked into the standard
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`agreements between Amazon and marketplace sellers, which allow Amazon's retail business to
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`analyze and use third-party seller data. In particular, the European Commission focused on
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`whether and how the use of accumulated marketplace seller data by Amazon as a retailer affects
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`competition. Based on the European Commission's preliminary fact-finding, Amazon appeared
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`to use competitively sensitive information about marketplace sellers, their products, and
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`transactions on the marketplace.
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`5.7
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`Recently, reports have surfaced that Amazon faces EU antitrust charges over its
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`use of third-party seller data.10 The charges will reportedly accuse Amazon of using data
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`10 See Jon Porter, Amazon Reportedly Faces EU Antitrust Charges over Use of Third-Party
`Seller Data, The Verge (June 11, 2020),
`https://www.theverge.com/2020/6/11/21287672/amazon-european-union-antitrust-charges-
`third-party-seller-data.
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`COMPLAINT - 14
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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 15 of 46
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`gathered from sellers on its marketplace to compete against them. Notably, Commissioner
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`Vestager has previously fined major U.S. tech giants, including Google, Qualcomm, and
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`Facebook, for their anticompetitive practices in Europe.
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`The Wall Street Journal Exposes Amazon's Improper Use of Third-Party Seller Data
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`5.8
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`On April 23, 2020, the Wall Street Journal (the "WSJ") published an article titled
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`"Amazon Scooped Up Data from Its Own Sellers to Launch Competing Products." The article
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`described how the Company used data about independent sellers on its platform to develop
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`competing products, in violation of its own policies. Such proprietary information can help
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`Amazon decide how to price an item, which features to copy, or whether to enter a product
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`segment based on its earning potential.
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`5.9
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`The Company has claimed publicly that "we strictly prohibit our employees from
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`using nonpublic, seller-specific data to determine which private label products to launch."
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`Further, Amazon's associate general counsel has told Congress, "[w]e don't use individual seller
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`data directly to compete" with businesses on the Company's platform.
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`5.10
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`In violation of these internal policies, however, the Company's employees used
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`the collected proprietary information for Amazon's own benefit. Although Amazon has stated it
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`has restrictions in place to keep its private-label executives from accessing data on specific
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`sellers in its marketplace, former employees admitted those rules were not uniformly enforced.
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`In fact, according to some former employees, using such data was a common practice that was
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`discussed openly in meetings they attended. Former executives said they were told frequently
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`by management that Amazon brands should make up more than 10% of retail sales by 2022.
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`Managers of private-label product categories were told to create $1 billion businesses for their
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`segments.
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`COMPLAINT - 15
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`Case 2:21-cv-00409 Document 1-2 Filed 03/26/21 Page 16 of 46
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`5.11 According to the WSJ, Company employees used the third-party sellers' data to
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`launch and benefit Amazon products. Some executives used proprietary information to research
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`best-selling items they might want to compete against. If access was restricted, managers would
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`ask an Amazon business analyst to create reports featuring the information.
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`5.12 For instance, Amazon's employees accessed documents and data about a best-
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`selling car-trunk organizer sold by a third-party vendor called Fortem. Fortem i