UNITED STATES OF AMERICA

PUBLIC

UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

In the Matter of PUBLIC

Civil Investigative Demands File No. 2123050, Amazon.com, Inc.

dated June 30, 2022 to Amazon.com, Inc. and

certain current and former Amazon employees

4 a ae e a

OMNIBUS PETITION TO QUASH OR LIMIT

CIVIL INVESTIGATIVE DEMANDS

Pursuant to 16 C.F.R. § 2.10(a), Petitioner Amazon.com, Inc. (“Amazon’’) requests that

the Federal Trade Commission (“FTC” or “Commission”) quash or limit the Civil Investigative

Demand issued on June 30, 2022 (“CID” or “June 2022 CID”). Certain current and former

Amazon employees also petition to quash or limit the Civil Investigative Demands served on

them individually (“Individual CIDs’),! not for the purpose of preventing their testimony from

being taken, but rather (1) to prevent the improper limitations that staff seeks to place on

counsel’s obligations to its clients and the witness’ right to counsel of his or her choice, and (2)

to compel FTC staff (“staff”) to negotiate reasonable alternative Investigational Hearing (“TH’’)

dates that fit with the witness’ schedule and permit adequate time for preparation rather than

insisting upon dates that staff unilaterally selected. Jeffrey Bezos and Andrew Jassy further

' The individuals petitioning to quash are: Jeffrey Bezos, Christopher (“C.R.”) Brown, Sharon

Chiarella, Dave Clark, Nahshon Davidai, Jamil Ghani, Russ Grandinetti, Greg Greeley, Doug

Herrington, Benjamin Hills, Sridhar Iyer, Andrew Jassy, Neil Lindsay, Dharmesh Mehta, Katey

Muus, Cem Sibay, and Gloria Smuda. To the extent that certain of these individuals have not

been served with the CID properly, they do not waive any arguments related to that improper

service.

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petition to quash their Individual CIDs because staff has identified no legitimate reason for

needing their testimony when it can obtain the same information, and more, from other witnesses

and documents.”

Staff’s handling of this investigation has been unusual and perplexing. The current

impasse has been brought about by unexplained pressure placed on staff to complete the

investigation hastily, by an arbitrarily chosen deadline. But staff's own behavior has exacerbated

the breakdown in this investigation, with the most recent incident being the most egregious: staff

has attempted to restrict, contrary to law and FTC practice, counsel’s ability to jointly represent

Amazon and the Individual CID recipients. Staff has gone so far as to demand that counsel leave

a hearing for the first individual witness for failing to abide by this improper restriction. The

Commission must step in.

For more than a year, Amazon worked diligently and cooperatively with staff to provide

information relevant to the FTC’s investigation of the sign-up and cancellation processes for the

Amazon Prime program that started in March 2021 with service of a Civil Investigative Demand

(“March 2021 CID’). In compliance with staff's requests, Amazon produced approximately

37,000 pages of documents, provided dozens of pages of interrogatory responses, identified and

searched the files of agreed-upon custodians, repeatedly met with staff to answer its questions,

and proactively followed up with staff to ensure it had the materials it needed. As Amazon

continued producing responsive materials, staff inexplicably disengaged. By February 2022,

staff had not communicated with Amazon about the Prime investigation for almost four months.

* This consolidated Petition is filed in accordance with staff’s expressed preference for an

omnibus Petition. To account for the additional material in this omnibus Petition, the moving

parties are filing an unopposed motion to extend the word limit. Further, with the exception of

two individuals, staff agreed to modify the filing date for the Petition to August 5, 2022. See

July 22, 2022 Letter from J. Cohen to L. Kim et al.

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Then, in April 2022, about six months after staff fell silent on the investigation, staff

abruptly notified Amazon that a new attorney would be taking over and that staff was under

“tremendous pressure” to conclude the investigation and had received “unambiguous instruction”

to recommend a course of action to the Commission before the fall. No such deadline had ever

before been suggested, nor did staff offer any explanation of the cause of this sudden directive.

Moreover, despite the professed urgency, the new attorney acknowledged that staff members had

not reviewed, or even downloaded, half of Amazon’s previously produced materials. At the

same time, staff demanded that Amazon produce additional new materials as part of the Prime

investigation, including significantly expanded search parameters and the addition of more than

10 new custodians, in a matter of approximately three weeks. When Amazon pointed out the

infeasibility of staff's unreasonable and inflexible new demands, while repeatedly offering

reasonable alternatives, staff refused to accommodate those concerns and then served the June

2022 CID that made matters worse.

The June 2022 CID both accelerated staff's demands for compliance and expanded the

scope of the investigation to include at least five additional non-Prime subscription programs.

On top of this, at the same time and without warning, staff sought to serve nearly 20 Individual

CIDs on current and former Amazon employees — at their homes — with unilaterally selected

dates for testimony during the next several weeks. Despite having discussed the investigation on

numerous occasions with Amazon’s counsel, staff bypassed Amazon’s counsel in serving these

Individual CIDs, leading to further confusion. Staff then refused to provide the Individual CIDs

to Amazon’s counsel when requested and informed counsel that they would not be permitted to

jointly represent Amazon and any of the individual employees, which is plainly contrary to law.

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The June 2022 CID is unworkable and unfair, reflecting less of a responsible effort to

collect the facts about a variety of longstanding and highly popular subscription programs than a

one-sided effort to force Amazon to meet impossible-to-satisfy demands. The June 2022 CID

goes beyond Prime sign-up and cancellation to sweep in at least five additional subscription

programs, each with their own unique facts, history, and personnel. Over five weeks, the CID

demands answers to multiple complex interrogatories and IH testimony on extraordinarily broad

topics for which no witness could responsibly be prepared to provide complete and accurate

testimony. Moreover, many of the requests are argumentative and vague, compounding the

impossibility of responding in the required timeframe.

Amazon remains committed to continuing to cooperate with staff to provide the

information it needs. Amazon has consistently been willing to work towards reasonable

agreement on prioritization, scope, and timing — as counsel operating in good faith do every day

in American litigation to ensure fair and complete discovery of the facts — without reciprocation

by staff. But this overly broad and burdensome CID is unworkable as written, especially given

the August 5, 2022 return date. At a minimum, Amazon needs staff to further clarify its vague

and argumentative requests and grant more time to comply with them, something staff has

refused to do without explanation.

The Individual CIDs are likewise unworkable because staff has imposed improper

limitations on the witnesses’ right to counsel and refused reasonable scheduling accommodations

to account for witnesses’ schedules and to allow adequate time to prepare for the IH testimony.

In addition to these concerns, Jeffrey Bezos and Andrew Jassy petition to quash their Individual

CIDs because staff has not identified a reason that their testimony as senior Amazon executives

is necessary or reasonable given the substantial documentation that Amazon has already

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produced and the abundance of other documents and IH testimony that Amazon remains willing

to produce.

Amazon therefore respectfully moves the Commission to quash or limit the June 2022

CID, particularly with respect to the scope of the CID’s IH testimony topics, staff’s continued

failure to identify topics with reasonable particularity, and its expansion into Amazon programs

not previously part of the investigation. At the very least, Amazon asks the Commission to

extend the return date for documents to September 15, 2022, subject to all modifications to the

CID proposed by Amazon, to give Amazon a fair opportunity to respond to the CID’s new and

expanded demands. The Individual CID recipients petition to quash their Individual CIDs to the

extent that staff refuses to provide a reasonable compliance schedule and seeks to impose an

improper limitation on their right to counsel.

BACKGROUND AND PROCEDURAL HISTORY

Amazon Prime is a paid subscription service that offers its members a wide array of

benefits, including free and fast shipping, access to an extensive library of music and video

content, and many other valuable benefits. Amazon has operated Prime for nearly 20 years. As

anyone who has signed up for or cancelled a Prime membership already knows, the process is

clear and straightforward under any reasonable definition.

I. Amazon Cooperated With Staff For More Than A Year.

On March 16, 2021, the FTC formally commenced an investigation with the issuance of

the March 2021 CID that focused exclusively on Prime enrollment and cancellation. The March

2021 CID included 14 interrogatories on topics such as “each step consumers must take to Enroll

in Amazon Prime” and 10 document requests, such as a request for documents relating to

“consumer perception or understanding of Enrolling in or Unsubscribing from Amazon Prime.”

See March 2021 CID Specifications A.1 and B.2.

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Amazon worked cooperatively with staff to respond to the March 2021 CID by, for

example, participating in multiple meetings with staff to understand staff’s priorities, and to help

staff understand the burdens associated with complying with certain specifications. These

discussions were productive: Amazon reached an agreement with staff on the content and

timeline for responsive productions, as evidenced by a series of emails between April and

August 2021. Amazon made approximately 10 document productions encompassing

approximately 37,000 pages of documents, plus additional spreadsheets and other data;

responded to interrogatory requests; and proactively followed up with staff to ensure staff had

necessary materials. In short, Amazon took all reasonable steps to comply with the Prime

investigation.

Staff, on the other hand, had long since stopped engaging with Amazon about the

investigation. In February 2022, after several months with no communication from the FTC,

Amazon proactively reached out to staff. During a February 7, 2022 call, the then-lead staff

attorney advised that she planned to turn her attention back to the Prime investigation a few

months later.

II. Amazon Responded To Staff’s New Requests.

On April 19, 2022, Amazon received a letter from a different member of staff, Jonathan

Cohen, that made a series of new expansive requests related to Prime. See April 19, 2022 Letter

from J. Cohen to L. Kim & Appendices A-C (“April 19 letter”). Without even consulting

Amazon, the April 19 letter requested that Amazon apply more than 65 new search terms,

resulting in over 1,500 search term combinations (on top of what Amazon had already completed

after agreeing with staff); requested information from nine new individual custodians and seven

vaguely-defined “team” custodians (on top of the eight custodians already included in response

to the March 2021 CID); and added more than 30 additional information requests, many with

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multiple subparts. See April 19 letter. Despite the scope of these new requests, staff gave

Amazon less than three weeks to respond. Further, staff explained that it was under “tremendous

pressure” to conclude the investigation swiftly, no later than the fall of 2022.

In the spirit of cooperation, Amazon met with staff to raise the burdens imposed by the

April 19 letter and to request that staff clarify its priorities. It became evident that, despite

demanding additional materials from Amazon, the new staff attorney on the matter did not know

what Amazon had already produced to staff. On May 5, 2022, during Amazon’s initial meeting

with Mr. Cohen, he indicated that staff had not downloaded and was not aware of approximately

half of Amazon’s production. See June 27, 2022 Letter from J. Graubert to J. Cohen, at 3. (It is

still not clear if the new staff team has reviewed these documents.) Despite the additional

burdens imposed by the April 19 letter, Amazon began making good faith efforts to respond to

the new inquires to the extent possible in accordance with staff’s communicated priorities. Yet

staff refused to modify any of the demands for electronically stored information (“ESI”) or

meaningfully consider Amazon’s explanation of the burdens imposed by the April 19 letter. See

id.

Amazon continued to cooperate with the investigation despite the significant expansion

of the March 2021 CID’s scope, including arranging for an Amazon executive to make two

presentations to staff to explain the Prime enrollment and cancellation processes, speaking with

staff to further discuss staff’s priorities, engaging in a two-hour in-person meeting to begin

answering staff's questions and to attempt to negotiate a more reasonable ESI scope, and serving

multiple production letters in response to the April 19 letter.

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II. Staff Issued A New CID That Expanded The Investigation To Additional

Subscription Programs And Issued Nearly Twenty Individual CIDs.

While Amazon continued gathering information to respond to the April 19 letter, the

Commission issued the June 2022 CID that is the subject of this Petition. The June 2022 CID

goes well beyond Prime sign-up and cancellation, newly sweeping in at least five additional

subscription programs — four of which are separate businesses at Amazon and one of which is a

third-party program not offered by Amazon.? As modified, it requests IH testimony without any

principled limitation or required specificity and requires answers to nine new interrogatories

relating to Prime and at least five other subscription programs. The new areas of inquiry include,

but are not limited to, testimony on non-Prime programs Audible, Amazon Music, Kindle

Unlimited, Subscribe & Save, and a third-party subscription program not offered by Amazon.

None of these programs to date have been part of the investigation.

Staffs conduct has needlessly compounded the unworkability of the June 2022 CID and

Individual CIDs. Starting just before the July Fourth holiday weekend, staff bypassed Amazon’s

attorneys and served separate Individual CIDs at the homes of numerous current and former

Amazon employees during a time when many of them were on vacation, causing delay and

confusion about what the FTC was doing. In all, Amazon is aware of 19 current and former

employees who have received Individual CIDs in connection with the Prime investigation. Staff

3 Compare March 2021 CID Subject of Investigation (“Whether the ‘Company’. . . has engaged

in unfair or deceptive acts or practices in connection with its Amazon Prime subscription service

by automatically enrolling consumers without their prior express informed consent or failing to

provide a simple mechanism for a consumer to stop recurring charges[.]’”) (emphasis added),

with June 2022 CID Subject of Investigation (“Whether the Amazon Parties and any individuals

affiliated with the Amazon Parties violated laws and regulations the Commission enforces .. . by

promoting Negative Option programs that, among other things, failed to provide consumers with

clear and conspicuous disclosures, enrolled consumers without their express informed consent,

or failed to provide consumers with a simple mechanism to cancel their subscriptions|.]’’)

(emphasis added).

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then refused Amazon’s repeated requests to provide copies of the Individual CIDs, even where

staff had failed to properly execute service. Although the Individual CIDs are dated June 30,

2022, in many instances, the witnesses did not become aware of the CIDs until several weeks

later. Staff also attempted — and failed — to properly serve Amazon with the June 2022 CID on

the Friday evening of the July Fourth holiday weekend, causing additional needless delay.

IV. Staff Has Refused To Reasonably Narrow The Scope Of The June 2022 CID Or

Allow Reasonable Time For Amazon To Comply With Staff’s Requests.

Despite radically expanding the scope of the investigation, the June 2022 CID demanded

that Amazon provide all documents and interrogatory responses by August 1, 2022 (now August

5) and prepare witnesses for IH testimony on September 20, 2022. Such a timeframe is

unworkable. Amazon has repeatedly offered constructive solutions, such as a rolling production

process extending until September 15, to provide staff the information it needs in a manner that

is efficient and feasible. Staff has refused to engage in meaningful discussions, going so far as to

say, in a meet-and-confer call on July 28, 2022, that staff did not need to hear more about

Amazon’s explanation of the specific burdens the June 2022 CID imposes despite asking for that

information in the July 22, 2022 email rejecting most of Amazon’s proposed modifications.

After several meet-and-confer sessions, the parties are at an impasse on the critical issues raised

in this Petition.

On July 7, 2022, Amazon raised its concerns with the scope and burden of the June 2022

CID to staff. See 16 C.F.R. § 2.7(k). To continue those discussions, Amazon followed up with a

July 18 letter describing the issues in more detail. Amazon repeatedly informed staff of the

burden of complying with the June 2022 CID, particularly in light of the exceedingly tight

timeline provided and the CID’s expansion beyond Amazon Prime, the investigation’s subject

for more than a year, to additional subscription programs. Where appropriate, Amazon proposed

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reasonable modifications to the June 2022 CID to allow for a production schedule, including

offering amended rolling responses that would extend beyond the August 1, 2022 return date by

just 45 days. See July 18, 2022 Letter from L. Kim to J. Cohen & Ex. A.

During follow-up calls on July 20 and 21, staff appeared willing to consider reasonable

modifications. That illusion soon evaporated, however. On July 22 and August 2, staff sent

letters proposing “modifications” to the June 2022 CID that failed to address the clear flaws in

the CID. Although staff did agree to extend the return date, it did so only by four days until

August 5. Furthermore, staff now seeks to require Amazon to prepare witnesses for three

separate days of testimony — one on Amazon Prime cancellation, one on Amazon Prime

enrollment, and one on “other topics,” which encompasses details concerning at least four

additional programs operated by various Amazon business units and one operated by a third

party. Each of these categories continues to include vague and overbroad requests (even as

modified), including all “[t]esting, studies and surveys” related to Prime cancellation and

“[c]ompliance with regulatory requirements in the .. . E.U.[]| and Japan” (the latter request being

outside of the FTC’s jurisdiction). The “other topics” testimony day is purportedly limited to

five non-Prime programs, but the catch-all topic — “[a]ny additional topic or topics covered by

the [June 2022 CID], which require no more than two hours of testimony during the day” that is

identified two weeks before the IH date — erases any meaningful limitation.*

Moreover, even as modified, staff has refused to recognize the burden imposed by the

requests related to five non-Prime programs in the short timeframe allotted to respond. Each

program has its own processes, employees, and data sources. Identifying responsive information

* This is true even though the request is limited to at most five additional topics. Based on the

text of the June 2022 CID, additional topics could expand beyond Prime and the five non-Prime

programs, meaning that Amazon must be prepared to address these as well.

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and documents for these programs, which again were not previously part of the investigation,

takes time and resources. These purported modifications do not address the unduly burdensome

nature of the June 2022 CID particularly since Amazon was only given five weeks to respond.

Regarding the Individual CIDs, staff has refused to provide reasonable modifications to

the IH schedule, including in instances where the witness was properly served only days before

the scheduled IH date. And with regard to Mr. Bezos and Mr. Jassy, staff has provided no

justification for the need for their testimony.

V. Staff?s Improper And Unlawful Attempts To Interfere With Witnesses’ Choice Of

Counsel.

Beginning in meet-and-confer discussions on July 7 and 11, 2022 staff began a campaign

to prevent Amazon’s counsel, Covington & Burling (“Covington”) from representing both

current and former Amazon employees in responding to their CIDs. In two letters dated July 19

and 29, 2022, and a final email on August 2, counsel pointed out that courts had acknowledged

and approved this widespread practice, that staff’s attempt to amend and enlarge the phrase

“counsel for the person being examined” in 16 C.F.R. § 2.7(f)(3) lacked any cognizable

foundation, and that staff’s attempts to impose limitations on counsel would improperly restrict

counsel’s ability to fully and effectively represent their clients and impinge on the witness’ right

to counsel of his or her choice. Staff never changed its position, although the demand that

Covington accept such limitations was re-framed several times. Further, staff offered impractical

and unhelpful solutions, such as Covington signing a nondisclosure agreement to proceed with

the representation. The matter came to a head in the first IH, on August 4, in which staff

demanded that counsel leave the hearing after they refused, once again, to accept improper and

unlawful limitations on their ability to represent their clients.

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Amazon has worked with staff to ensure that staff can obtain the information it needs,

and Amazon remains willing to continue that cooperation. But Amazon and the Individual CID

recipients should not be punished by an artificial, rushed deadline imposed with no explanation

— a deadline that seems all the more artificial after staff had been silent on the investigation for

about six months. The June 2022 CID — with its new overbroad scope and aggressive deadline

— and staffs refusal to meaningfully compromise leave Amazon no choice but to seek the

Commission’s assistance.

ARGUMENT

The FTC’s “[s]ubpoena enforcement power is not limitless.” FTC v. Ken Roberts Co.,

276 F.3d 583, 586 (D.C. Cir. 2001). As the Supreme Court has cautioned, “governmental

investigation into corporate matters may be of such a sweeping nature and so unrelated to the

matter properly under inquiry as to exceed the investigatory power.” United States v. Morton

Salt Co., 338 U.S. 632, 652 (1950). Compulsory process is proper only if the inquiry is within

the Commission’s authority, the demand is not too indefinite, and the information sought is

reasonably relevant to the inquiry. See id. A demand will not be enforced if it is “unduly

burdensome or unreasonably broad,” which occurs where “compliance threatens to unduly

disrupt or seriously hinder normal operations of a business.” FTC v. Texaco, 555 F.2d 862, 882

(D.C. Cir. 1977).

In evaluating the reasonableness of a Civil Investigative Demand, the Commission looks

to whether it is self-limiting, see In re Altmeyer Home Stores, Inc. Petition to Quash or Limit

Civ. Investigative Demands, 1997 WL 33483284, at *7 (F.T.C. Feb. 12, 1997), and the conduct

of staff in responding to a petitioner’s concerns. See Texaco, 555 F.2d at 882 (clarifications by

staff “alleviated [petitioner’s] concerns to some extent’); In re Civ. Investigative Demand to

Beam Fin., Inc. Dated May 21, 2020, 2020 WL 5037434, at *4 (F.T.C. Aug. 17, 2020)

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(discussing favorably staff’s offer to allow a rolling production of information in response to the

Civil Investigative Demand). The Commission may extend a Civil Investigative Demand’s

return date to facilitate compliance. Beam, 2020 WL 5037434 at *4.

I. Staff Has Improperly Interfered With Witnesses’ Selection Of Counsel In

Connection With The Individual CIDs.

A crucial threshold issue to moving forward in this investigation is that staff has placed

an unreasonable and unlawful restriction on Amazon’s counsel’s ability to jointly represent both

Amazon and the Individual CID recipients. Beginning in meet-and-confer discussions on July 7

and 11, staff began a wholly improper campaign to prevent Amazon’s counsel, Covington, from

representing current and former Amazon employees who desired Covington’s representation in

responding to the Individual CIDs. Staff sought to justify its position not by alleging that

Covington had a conflict that precluded such joint representation, but rather on the specious

ground that 16 C.F.R. § 2.7(f)(3), which provides that IHs are non-public, gives staff the

authority to decide on its own that an attorney representing other parties in the investigation

(including the corporate respondent) does not qualify as “counsel for the person being examined”

— even where (1) the person being examined has chosen that attorney as his counsel and (2)

wishes for that attorney to be present for the examination. Staffs novel and strained

interpretation of Rule 2.7(f)(3) — which plainly is not about protecting the non-public nature of

the hearing, but rather constitutes a back-door attempt by staff to interfere with a witness’

selection of counsel — is wholly without merit, and a striking deviation from the universal

practice not only in FTC matters but proceedings before other administrative agencies as well.

The Commission must reverse staffs position.

In two letters, dated July 19 and July 29, 2022, Covington pointed out to staff that its

position was not consistent with a plain reading of § 2.7(f)(3), that courts had recognized and

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approved joint representation of witnesses,° and that such restrictions impinged on the right of

witnesses under the Administrative Procedure Act to “[a] lawyer of one’s choice.” Csapo, 533

F.2d at 10-11.° Courts have gone so far as to say that in complex matters such as this one, in

which new separate counsel would have difficulty getting sufficiently up to speed to represent an

individual adequately, excluding corporate counsel from the choices available to a witness “has a

second and impermissible effect; it bears directly and prejudicially upon the interests of the

witness.” SEC v. Higashi, 359 F.2d 550, 553 (9th Cir. 1966).

Staff has never articulated any legitimate basis for its attempts to impose these

restrictions on counsel. There has been no suggestion of any conflict here and there is none.

Staffs position was obviously not well thought out as they eventually backed off from the most

extreme position: that joint representation would not be permitted at all. After Covington’s July

19 letter, staff acknowledged that Covington could appear on behalf of individuals but demanded

that the firm sign nondisclosure agreements prohibiting discussion of any matters raised in an

individual IH with other witnesses and parties. In response, in Covington’s July 29 letter,

counsel again stressed that staff’s position was groundless, that witnesses were entitled to full

> See generally SEC v. Csapo, 533 F.2d 7, 11-12 (D.C. Cir. 1976) (“The mere fact that a

witness’ counsel also represents others who have been or are later to be questioned, is no basis

whatsoever for concluding that presence of such counsel would obstruct the investigation. On

the contrary, in many cases it is likely that such representation may facilitate and expedite the

proceedings.”’); Backer v. Commissioner, 275 F.2d 141, 144 (Sth Cir. 1960) (“the Commissioner

cannot put limitations on the general authority to have counsel as granted by the statute by saying

that the witness's choice cannot include one who also represents the taxpayer’). The Rules of

Professional Conduct similarly recognize the appropriateness of joint representation of

companies and their employees. See D.C. Rules of Professional Conduct § 1.13(d) & 4.2 (and

their equivalents in other states).

® See also SEC v. Whitman, 613 F. Supp. 48, 50 (D.D.C. 1985) (“Congress determined that a

witness testifying before an agency cannot be denied the accompaniment, representation and

advice of counsel, regardless of the nonadjudicatory nature of the proceeding. That determination

reflects the lawmakers' understanding of potential perils to the witness which accompany the act

of testifying, and calls for the full potency of the right to counsel.”) (footnote omitted).

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and effective representation, and there was nothing in the rules compelling any party or its

counsel to maintain the confidentiality of these proceedings. Staff then formulated its next

position, delivered during a meet-and-confer session on August 1 and confirmed by email from

staff later that day, that “[t]o attend any investigational hearing at issue, Covington must agree,

either in writing in advance or on the record, that its appearance and involvement in the

investigational hearing is limited to its representation of the witness and the witness’ interests.”

August 1, 2022 (6:49 p.m.) email from J. Cohen to L. Kim. This carefully crafted language had

the same purpose and effect as staffs earlier demands on this issue, which Covington promptly

rejected as improperly attempting “to restrict our ability to fully and effectively represent our

clients, and impinging on the witness’ right to counsel of their choice.” August 2, 2022 (5:43

p.m.) email from J. Graubert to J. Cohen. Staff accompanied these communications with a threat

that if counsel refused to agree to this limitation, the hearing officer at any IH in which

Covington appeared would ask counsel to leave the hearing, and that if counsel refused to leave,

they would be removed from the hearing room for “trespassing” on government property.

During the first IH on August 4, staff demanded that Covington agree to its August 1

limitation. When counsel rightly refused to do so, pointing out that they had made their position

clear repeatedly without rebuttal from staff, staff demanded that counsel leave. Not wishing to

remain in the IH without his attorneys, the witness joined counsel in leaving the hearing room,

thus ending the IH after only a few minutes. See Declaration of J. Graubert, attached as Exhibit

1. Staff’s unreasonable and unlawful conduct is the sole reason the IH did not proceed as

scheduled.

Counsel cannot agree to restrict its ethical duty to provide full and effective

representation to all its clients. As the authorities cited above demonstrate, there is no issue with

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joint representation of a corporate respondent and its current and former employees, and

interfering with the witness’ choice of counsel can only weaken his or her ability to prepare for

and provide testimony. Amazon also has legitimate interests in the individual IH proceedings

because the company is not waiving or authorizing its employees to waive any privilege and it is

appropriate for counsel to protect that privilege.

The effect of staff’s position would be to complicate and cause unneeded confusion in

complex matters such as this. It would also represent a major change in FTC practice that would

be of concern to the entire regulated community and its counsel. Amazon and the Individual

CID recipients therefore ask the Commission to clarify that, consistent with basic legal

principles, Amazon’s counsel may jointly serve as counsel for the Individual CID recipients

without the artificial limitations imposed by staff.

I. The June 2022 CID Is Unduly Burdensome and Unreasonably Broad In Light Of

The Expansion And Vagueness Of The Topics And The Time Constraints.

A. The June 2022 CID Remains Overbroad, Vague, And Argumentative.

As currently written (and as modified), the June 2022 CID’s interrogatory and document

requests are “unduly burdensome or unreasonably broad,” making it unworkable for Amazon to

discern the information staff demands and to respond in the timeframe allowed. Texaco, 555

F.2d at 882. Further, the June 2022 CID fails to identify matters for oral testimony with

“reasonable particularity” as required by 16 C.F.R. § 2.7(h); In re Civ. Investigative Demand to

Intuit, Inc., 2020 WL 5037437, at *8 (F.T.C. Aug. 17, 2020) (“Reasonable particularity ‘merely

requires that the requesting party describe topics with enough specificity to enable the

responding party to designate and prepare one or more deponents.’” (citation omitted)). And

many requests are argumentative or call for legal conclusions that Amazon contests — making it

impossible to reply without conceding staffs improper allegations.

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First, the June 2022 CID, even as modified, sweeps in at least five additional subscription

programs that Amazon operates as separate businesses or that are operated by a third party. The

FTC’s imposition of deadlines of only a few weeks for production of information related to these

additional programs — after Amazon had diligently worked to meet the FTC’s request for

similar material for Prime for more than a year — is unreasonable. Prior to the June 2022 CID,

over the course of more than a year, these programs were not part of the investigation. Amazon

has repeatedly informed staff about the differences between different Amazon programs. These

programs are run by different teams at Amazon (or by a third party), with different managers,

senior executives, software designers, engineers, graphic designers, consumer research experts,

and consumer response specialists. They rely on different data sources. For each program,

Amazon will need to interview different sets of employees and collect and review different

document sets. There is not a common response that can be given for all of these programs and

Amazon cannot rely on previous work it has done to comply with the investigation into Prime.

Amazon has indicated that it needs more time to provide staff the information that it requested on

Prime, but particularly these newly identified non-Prime programs. Staff has refused these

reasonable requests and continues to insist that Amazon comply with the June 2022 CID ina

matter of weeks. Such an expansion of the investigation’s scope makes it unworkable for

Amazon to comply by August 5.

By way of example, Interrogatory 1 asks Amazon to identify “the number of consumers

who became (a) Nonconsensual Enrollees; or (b) Diverted Cancels.” These terms are defined to

include Prime, Audible, Amazon Music, Kindle Unlimited, Subscribe & Save, and a third-party

subscription program not offered by Amazon. Neither of these concepts was part of the March

2021 CID nor had they been the subject of discussions with staff. And the terms themselves are

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problematic: because the request requires a subjective evaluation of customers’ beliefs, there is

no clear way to satisfy the request. Moreover, the terms are argumentative and improperly ask

for agreement on surely-to-be contested legal issues. Given the expansion to an additional five

subscription programs that automatically renew and the vagueness and argumentative nature of

the request, Interrogatory 1 is unduly burdensome.

Another request that significantly expands the investigation’s scope is Interrogatory 8. It

requires Amazon to query every “Covered Executive” regarding the use of “Ephemeral

Messaging” in relation to “Enrollment and Cancellation Processes,” “Nonconsensual Enrollees,”

or “Diverted Cancels,” and to produce an “Ephemeral Messaging Log” and an image of the

device used to send or receive such messages. As Amazon explained to staff, to the extent any

such messages were used, by their nature, they would have disappeared years ago and cannot be

recovered. Further, requiring Amazon to speak with every “Covered Executive” regarding the

content of years-old messages is time-consuming and unlikely to be relevant to the investigation

into Prime. Not only is the subject of this interrogatory outside of the original investigation into

Prime, it would also require significant resources to complete for little purpose and risks

sweeping in private personal information (e.g., private messages included on the “Ephemeral

Messaging Log”). For these reasons, it is unduly burdensome, especially to complete by August

5.

Second, even as modified, the investigational hearing topics do not provide the

reasonable particularity required by 16 C.F.R. § 2.7(h). The July 22 modification letter requires

Amazon to produce corporate witnesses over three days on three topic areas: Prime enrollment,

Prime cancellation, and “other topics.” Within each of those topic areas, the July 22

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modification letter lists a number of vague topics that the witness must be prepared to testify

about:

e Prime Enrollment: topics include (1) “Any topic addressed in an unsworn or

unverified written discovery response; (2) “Any July 1 interrogatory fully and

timely answered in writing”; (3) “[t]esting, studies, or surveys”; and (4) “The

causes of Nonconsensual Enrollment.”

e Prime Cancellation: topics include numbers (1) through (3) above, as well as

“Material changes to the flow that Amazon implemented or considered” and

“Compliance with regulatory requirements in the U.S., E.U. and Japan.”’

e Other Topics: topics include (1) “Every action of any sort that the Amazon

Parties took, in whole or in part, in response to the Insider Article”; (2) the

enrollment and cancellation processes of Audible, Amazon Music, Kindle

Unlimited, Subscribe & Save, and a third party’s subscription program; and (3)

the document retention policies for Prime and these other five Amazon programs.

Purported specifications that include the words “any” or “every” fail on their face to

comply with Rule 2.7(h). More significantly, however, each of the three topic areas contains a

catch-all request that swallows any purported limitation. Despite providing a list of topics for

each of the three days, staff may also seek testimony on “[a|ny additional topic or topics covered

by the [June 2022 CID], which require no more than two hours of testimony during the day, and

that [staff identifies] with reasonable particularity two weeks before this portion [of the]

examination.” Even with staff's concession on August 2 to limit this topic to five additional

topics, this provision eliminates any limitation in the July 22 letter by allowing staff, with only

two weeks’ notice, to spring as many as five of the topics from the June 2022 CID on Amazon

and demand that they prepare a witness on those topics.

The IH topics remain unworkable because it is still not clear what Amazon’s witnesses

have to be prepared for. Staff’s clarification, for example, regarding what types of “[t]esting,

’ The FTC lacks authority to inquire into regulatory requirements in the E.U. and Japan, and, this

aspect of the CID must be quashed as outside the FTC’s authority.

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studies or surveys” for Prime enrollment and cancellation it is interested in, demonstrates the

confusion. Staff states that the witness must be knowledgeable about the metrics behind such

tests, the general conclusions from such tests, the results of such tests, and material changes to

enrollment and cancellation stemming from such tests. Amazon has conducted hundreds of tests

on enrollment and cancellation for Prime, such that no witness could reasonably be prepared to

testify about all of them. The modification does not make it clear the level of detail that an

individual must know on any specific test. Nor has staff clarified what constitutes a “material

change” to enrollment and cancellation processes, other than to exclude certain enrollment and

cancellation flows from the definition. Compounding the IH topics’ unworkability, Amazon

must prepare for testimony on Prime and five non-Prime programs, many of which (as

explained) have different staff to consult (including managers, executives, engineers) and

different data sources. Even more egregiously, staff has given itself a loophole by allowing itself

to add additional testimony topics at the last minute. That is not reasonable particularity. Intuit,

2020 WL 5037437 at *8.

Amazon is willing to comply with the IH topics, but needs more guidance from staff. So

far, staff has not come close to clarifying what it is looking for so Amazon can identify and

prepare the proper witnesses on the IH topics.

B. Staff’s Purported Modifications Do Not Address Amazon’s Reasonable Concerns.

As indicated in this Petition, Amazon has cooperated with staff throughout this

investigation. This cooperation included seeking reasonable modifications to the June 2022 CID

to allow Amazon to understand what staff actually wants and to have time to produce the right

material. In response, staff's seeming attempts at modification — though appearing on the

surface to be significant — do nothing to alleviate Amazon’s reasonable concerns.

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Amazon raised its concerns about the dozens of non-Prime programs that the June 2022

CID sweeps in. In response, staff agreed to limit the IH testimony and interrogatory and

document requests to five non-Prime programs — Audible, Amazon Music, Kindle Unlimited,

Subscribe & Save, and a third party’s subscription program. While seemingly a meaningful

modification, the reality is that Amazon’s compliance with the June 2022 CID requires it to

identify individuals within each of those additional programs who can respond to the

interrogatory requests and prepare for IH testimony. Again, these programs have not been part

of the year-plus-long investigation. Amazon has started from scratch identifying and

interviewing individuals involved with these programs, and searching for and reviewing

responsive information. In short, the work to comply with requests for these non-Prime

programs is just beginning. It is unworkable to have it completed in a few weeks as staff has

demanded.

Amazon also raised concerns with the scope of the IH topics in the June 2022 CID as

written. Staffs solution was to require testimony over three days on three topic areas. But as

indicated above, staff left itself the option to require testimony on as many as five topics from the

June 2022 CID so long as it gives Amazon two weeks’ notice. Far from providing a limitation

on the IH testimony, staffs “solution” puts any topic from the original June 2022 CID in scope.

Given the limited notice required to add new topics (two weeks), Amazon will need to be

prepared in the event staff decides it wants to add new topics to one of the IH testimony days.

Specifically, Amazon will need to identify individuals who can testify to each of the June 2022

CID IH topics, notwithstanding staffs purported narrowing of those topics.

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In short, staff has failed to meaningfully make any modifications to the June 2022 CID

and continues to demand compliance with an unrealistic schedule based on vague “pressure”

being placed on staff from above.

C. Complying With The June 2022 CID Imposes An Undue Burden On Amazon.

Complying with the June 2022 CID will impose an undue burden. See Declaration of M.

England, attached as Exhibit 2. Based on the breadth of subject matters and time periods

covered by the IH topics, document requests, and interrogatories, Amazon estimates that it will

need to consult dozens of witnesses — not including dozens more within the different businesses

— in order to comply with the CID. This point is worth emphasis: Amazon estimates that it will

need to work with dozens of witnesses by September 20, 2022, less than two months away.

Even under the most favorable conditions, that is not possible. And these are not the most

favorable conditions: in addition to having to identify witnesses on the numerous and oftentimes

vague topics, Amazon will face inevitable scheduling challenges during a busy travel period for

potential witnesses and the continuing effects of the COVID-19 pandemic, which may impact its

ability to conduct in-person preparation and the ability of witnesses to travel to give in-person

testimony.

The sweeping breadth of the topics will likely require Amazon to consult not only

managers and senior executives, but also software designers, engineers, graphic designers,

consumer research experts, and consumer response specialists. Requiring this level of witness

preparation in such a short time frame indeed threatens to disrupt normal operations by, for

example, diverting resources away from Amazon’s business units during a busy retail shopping

period; it therefore is unreasonable. See Texaco, 555 F.2d at 882. It is particularly unreasonable

where, as here, the urgency to conclude the investigation has been manufactured.

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Staff refuses to meaningfully compromise on the scope and breadth of the CID. The

discussion above demonstrates the burden facing Amazon, both in terms of the number of

witnesses who will be required to testify, the number of Amazon programs involved, and, more

fundamentally, the lack of clarity on what information staff is actually seeking. Absent clarity,

witnesses might not possess the types of knowledge that staff is looking for, leading to further

delay and waste of time during IHs. For these reasons, the Petition should be granted.

Ill. The Individual CIDs Are Unreasonable And Unduly Burdensome.

Staff’s unreasonable demands and lack of cooperation extend to the Individual CIDs that

it recently sprung on nearly twenty current and former Amazon employees and executives.

Rather than coordinate service with Amazon or its counsel, staff tried to surprise the employees

and executives, at their homes, including on the Friday of a holiday weekend. When Amazon

learned of staff’s actions and asked staff for copies of the CIDs, staff refused. As a result, staff

prevented Amazon from working quickly to secure legal representation for those employees.

Staff did not stop there. As discussed above, when many of those employees later chose to be

represented by Amazon’s counsel, Covington, staff tried to block that joint representation by

saying that such representation was improper, only to concede on July 20 that the witnesses in

fact had a right to their choice of counsel. (As explained above, however, staff has continued to

interfere with witnesses’ right to counsel, going so far as to halt the first IH in order to enforce its

unlawful position.)

With no input from the witnesses or counsel, and no consideration for their personal and

professional commitments, staff demanded that all of the individual [Hs occur before September

20, with several of them set in the first two weeks of August. This timetable is apparently driven

by an unexplained imperative to hurry up and finish the investigation (which itself is apparently

based on some internal pressure, after ignoring the investigation for months). To meet this

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arbitrary timeline, staff's schedule repeatedly stacks multiple THs in a single day and crams

several back-to-back in a single week. Despite these issues, counsel has been attempting to work

with staff on a reasonable schedule, but staff has refused in many instances to modify IH dates

absent a showing of extraordinary hardship.

Staff's proposed IH schedule is unreasonable and unduly burdensome. The fact that

staff, after about six months of delay, now must respond to a deadline of the agency’s own

making is no excuse for imposing unreasonable demands on Amazon or its executives and

employees. Every one of these executives and employees has a right to counsel, and a

concomitant right to an adequate time to prepare for their testimony. See, e.g., Csapo, 533 F.2d

at 10-11. That preparation takes time that staffs unilaterally imposed schedule does not permit.

Just one example illustrates the problem: counsel for one of the Individual CID recipients was

alerted to the individual’s CID on July 28, yet staff initially insisted on a scheduled IH date of

August 5, a mere five business days away. Such a short time period does not give counsel or the

witness adequate time to prepare for the IH and permits no allowance for witnesses’ scheduling

conflicts. (Staff has since conceded that the IH can proceed the following week, which is still a

remarkably tight time for the witness to prepare.) This is, again, a problem of staff's own

making: caused by its decision to issue nearly twenty individual CIDs, dramatically expand the

scope of its investigation without warning, refuse to place meaningful limits on the IH topics,

and demand compliance in a two-month period.

The recipients of the Individual CIDs thus petition for relief from the IH schedule

imposed by staff. There is no questioning the Commission’s power to grant additional time to

comply with a CID. See, e.g., In re Civil Investigative Demand to Beam Fin., Inc., 2020 WL

5037434 (F.T.C. Aug. 17, 2020) (granting a “modest extension” to the deadline to comply with a

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CID). Here, counsel merely requests that the Commission vacate the current IH schedule and

direct staff to make good faith efforts to work with counsel to reschedule the individual THs, with

the expectation that the individual [Hs will be completed no later than October 21, 2022.

IV. Staff Has Identified No Legitimate Reason For The Individual CIDs To Mr. Bezos

and Mr. Jassy.

Mr. Bezos and Mr. Jassy further petition to quash or limit the Individual CIDs issued to

them in this matter. Staff’s demand that Mr. Bezos and Mr. Jassy testify at an IH on an openended list of topics on which they have no unique knowledge is grossly unreasonable, unduly

burdensome, and calculated to serve no other purpose than to harass Amazon’s highest-ranking

executives and disrupt its business operations.

Mr. Bezos and Mr. Jassy are Amazon’s highest-level executives. Mr. Bezos is Amazon’s

Executive Chairman; Mr. Jassy is his successor as Amazon’s President and CEO. Together they

run a global company that is a significant employer in the United States. Preparing either to

testify regarding the granular details of business operations for which they have no unique

knowledge and no day-to-day responsibilities would be a tremendous burden on them, on

counsel, and on Amazon. See United States ex rel. Galmines v. Novartis Pharms. Corp., 2015

WL 4973626, at *1 (E.D. Pa. Aug. 20, 2015) (“depositions of high-level officers severely

burdens those officers and the entities they represent,” creating a danger that the proponent of the

discovery “might use this severe burden to their unfair advantage’). Given the disproportionate

burden and the risk of abuse, staff has a unique responsibility to justify its demand that Mr.

Bezos and Mr. Jassy both testify at an IH. See Celerity, Inc. v. Ultra Clean Holding, Inc., 2007

WL 205067, at *3 (N.D. Cal. Jan. 25, 2007) (“Virtually every court that has addressed deposition

notices directed at an official at the highest level . . . of corporate management has observed that

such discovery creates a tremendous potential for abuse or harassment.”’).

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Staff has not justified that demand; in fact, it has refused to do so. Staff has served nearly

twenty CIDs on current and former executives and employees of Amazon, and has demanded

days’ more of testimony from corporate representatives in connection with the company CID.

Staff is thus set to receive dozens of hours of testimony from numerous Amazon executives

“who dealt with the relevant topics on a day-to-day basis” and who may be better placed to

“testifLy] about them with a granular level of detail.” Amazon.com, Inc. v. Commissioner, 2014

WL 6980512, at *4 (T.C. Dec. 10, 2014). “High-level testimony from Mr. Bezos [and Mr.

Jassy] on these topics would add little.” Jd.

Given the likelihood that any IH testimony from Mr. Bezos and Mr. Jassy would be

unduly burdensome and unnecessarily cumulative, their IH testimony should at a minimum be

postponed until such time as staff has completed all other individual and corporate JHs in this

matter. Only then, and only on a showing that, despite staffs reasonable efforts, Mr. Bezos and

Mr. Jassy have unique knowledge on relevant topics that staff has been unable to obtain from

other Amazon witnesses, should staff be permitted to proceed with an IH of Mr. Bezos or Mr.

Jassy. See id. at *3—4 (quashing an IRS subpoena seeking deposition testimony from Mr. Bezos

because “[p|reparing him to testify in any detail on such a broad range of topics would be

exceptionally time consuming,” and those topics already had been, or would be, covered by

numerous other Amazon executives).

V. Amazon’s History Of Cooperation With The FTC Underscores The Burden And

Lack Of Notice Imposed By The June 2022 CID’s Unexplained Departure From The

Course Of The Investigation.

According to the FTC’s Rules of Practice, parties are expected “to engage in meaningful

discussions with staff to prevent confusion or misunderstanding regarding the nature and scope

of the information and material being sought, in light of the inherent value of genuinely

cooperative discovery.” 16 C.F.R. § 2.4. For over a year, Amazon has cooperated with staff in

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its investigation into Prime. Amazon has complied with the initial March 2021 CID through

voluminous document productions and responses to interrogatories. Staff’s long silence on the

investigation into 2022 suggested to Amazon that either staff had what it needed or that the

investigation was not a priority.

The June 2022 CID’s unexplained departure from the course of the investigation by, for

example, expanding the scope of the investigation into programs beyond Prime, unduly burdens

Amazon. Whatever notice Amazon previously received about the nature and scope of this

investigation has been undone by the June 2022 CID. To be sure, “[w]here . . . no complaint has

yet been formulated and the issues have therefore not yet been crystallized . . . . an investigating

agency is under no obligation to propound a narrowly focused theory of a possible future case,”

Texaco, 555 F.2d at 873-74, and there is no doubt that the FTC may change the course of an

investigation. But here, where staff had proceeded for over a year with an investigation into

Prime, it cannot, as the result of an emergency of its own creation, significantly expand the scope

of the investigation into multiple new areas that do not overlap with the existing investigation

while giving Amazon only five weeks to respond. Such actions belie any attempt “to prevent

confusion or misunderstanding” regarding the investigation. 16 C.F.R. § 2.4.

CONCLUSION

Amazon remains willing to work with staff on this investigation. But it must be given an

adequate amount of time to process, receive clarification from staff, and respond to the new

demands and subject areas of the CID. It would be fundamentally unfair to expect Amazon to be

able to respond to the June 2022 CID in the time allotted when staff has refused to adequately

clarify its requests. And its counsel must not be unlawfully prevented from engaging in joint

representation of Amazon and its current and former employees.

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For the reasons stated above, Amazon respectfully asks the Commission to quash the

June 2022 CID as currently written (and in the absence of the modifications proposed by

Amazon), particularly with respect to the scope of the CID’s IH testimony topics, its failure to

identify IH topics with reasonable particularity, and its expansion into Amazon programs not

previously part of the investigation. At the very least, Amazon asks the Commission to extend

the return date for documents to September 15, 2022, subject to all modifications to the CID

proposed by Amazon, to give Amazon a fair opportunity to respond to the CID’s new and

expanded demands. The Individual CID recipients further petition to quash as set forth above.

DATED: August 5, 2022

Respectfully submitted,

COVINGTON & BURLING LLP

LAURA KIM

JOHN GRAUBERT

JOHN HALL

LAURA FLAHIVE WU

STEPHEN ANTHONY

One CityCenter

850 Tenth Street, NW

Washington, DC 20001-4956

Tel: (202) 662-6000

jgraubert@cov.com

Ikim@cov.com

jhall@cov.com

Iflahivewu@cov.com

santhony@cov.com

Counsel for Amazon.com Inc.

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Counsel for Jeffrey Bezos, Christopher (“C.R.”)

Brown, Sharon Chiarella, Dave Clark, Nahshon

Davidai, Jamil Ghani, Russ Grandinetti, Greg

Greeley, Doug Herrington, Benjamin Hills,

Sridhar Iyer, Andrew Jassy, Neil Lindsay,

Dharmesh Mehta, Katey Muus, Cem Sibay, and

Gloria Smuda

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CERTIFICATE OF SERVICE

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Thereby certify that, on August 5, 2022, the foregoing Omnibus Petition to Quash was

served by electronic mail to the following:

Office of the Secretary

600 Pennsylvania Ave. NW

Washington, D.C. 20580

electronicfilings@ftc.gov

Secretary April Tabor

600 Pennsylvania Ave. NW

Washington, D.C. 20580

atabor@ftc.gov

Jonathan Cohen

600 Pennsylvania Ave. NW

Washington, D.C. 20580

Jcohen2(@ftc.gov

Olivia Jerjian

600 Pennsylvania Ave. NW

Washington, D.C. 20580

ojerjian@ftc.gov

Max Nardini

600 Pennsylvania Ave. NW

Washington, D.C. 20580

tnardini@ftc.gov

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Laura Kim

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