BOULDER, Colo. — A Boulder-based company is taking a stand against one of the largest online retailers in the world.
Despite its enormous success online, PopSockets CEO David Barnett said he had no choice but to stop selling their popular adhesive phone grips through Amazon. Barnett said his company decided to cut direct ties with Amazon in 2018 after the behemoth sold his product for less than what they agreed upon and then demanded PopSockets pay them the difference.
“I said, ‘It’s not in our agreement, why would you expect that? That’s strange. It’s not in the agreement.' The response is, ‘Well, if we don’t get it—’ and then the threats come,” Barnett said Friday at a Congressional antitrust hearing in Boulder.
The U.S. House Judiciary’s Subcommittee on Antitrust, Commercial and Administrative Law hosted the hearing at the University of Colorado Law School.
“We decided to end our relationship with Amazon over this. This was one reason we cited when we gave to Amazon. Their response was, ‘No, you’re not leaving the relationship.’ I found that unbelievable,” Barnett said during Friday’s hearing.
Executives from companies Sonos, Basecamp and Tile joined the testimony against a number of tech giants.
The complaints varied, but they were generally centered on companies like Amazon, Facebook, Google and Apple using their power to squeeze out smaller businesses.
Barnett said that although PopSockets would no longer sell directly to Amazon, he expected their products would be sold on the site by other authorized distributors. He says that was not the case.
“They proceeded to remove the listings of our authorized reseller — of the listings on Amazon, preventing an authorized reseller from selling. They refused to clarify the language around their policy that they cited in doing this. It caused great harm to our company,” Barnett testified.
U.S. Rep. Joe Neguse, D-Boulder, serves on the subcommittee that hosted Friday's hearing.
“We have heard this time and time again from small businesses — not just in Colorado, but really across the country — that they feel squeezed by some of the behemoths in the online or digital marketplace,” said Neguse, who represents Colorado’s Congressional District 2.
“It’s a real concern, and it’s something we have to solve,” Neguse said.
Barnett was asked during the hearing what his sales looked like on other major online platforms. He said the company had sold products on Walmart’s website, but it was only about 1/38 of the sales they generated from Amazon.
Barnett said his company was able to survive the Amazon fallout, but he isn’t sure other smaller businesses can.
Neguse said that’s exactly why they’re holding these hearings. He said the next step will be to start drafting new legislation.
“Some of those will be perhaps strengthening the antitrust laws that are already on the books,” Neguse said, telling FOX31 it’s a bipartisan effort.
“Other steps that we might take is incentivizing and encouraging regulators — both at the federal, as well as local and state level — to play a role," Neguse said.