Why is Amazon stock falling 4% today?

Amazon.com Inc. AMZN shares fell about 4% in trading on Thursday after a report said a US Senate panel is investigating whether the company allowed China to exert undue influence over its online marketplace.

According to Bloomberg, Republican staff members on the Senate Small Business Committee have been examining potential “Amazon negligence related to Chinese influence” and have uncovered “compelling evidence,” citing committee correspondence and interviews.

The reported investigation adds to Amazon’s existing regulatory challenges, including antitrust lawsuits and allegations of deceptive business practices, both of which the company has denied.

The latest inquiry expands scrutiny of the e-commerce giant beyond domestic competition issues to its international marketplace operations.

Inquiry follows report on alleged bribery involving China-based employees

The congressional investigation follows a Bloomberg report describing an international bribery network involving Amazon employees based in China.

According to the report, some employees allegedly accepted payments from merchants in exchange for administrative favors and competitive advantages on Amazon’s marketplace.

As part of the investigation, committee researchers interviewed independent merchant Jack Nekhala, a Staten Island inventor who sells mattress sheet fasteners.

Nekhala said he shared recordings of conversations with an intermediary who claimed to have contacts among Amazon employees in China capable of manipulating seller accounts in exchange for payment.

Committee researchers were particularly interested in understanding how employees based in China could influence Amazon’s marketplace, according to Nekhala.

Another individual who works with Amazon sellers told Bloomberg that committee staff also requested referrals to additional merchants for interviews, although the person declined to be identified because they were not authorized to discuss the committee’s work.

Third-party sellers and broader regulatory scrutiny remain in focus

Independent third-party merchants account for roughly 60% of products sold through Amazon’s online marketplace.

According to the report, many sellers have long complained about unexpected account suspensions, arbitrary enforcement actions and limited access to effective customer support.

Some merchants have reportedly turned to intermediaries offering connections to Amazon insiders who could reverse suspensions or restore product listings in exchange for payments.

The latest investigation comes as Amazon continues to reshape parts of its business.

On July 22, the company confirmed workforce reductions within its core Artificial General Intelligence (AGI) division following broader layoffs affecting approximately 16,000 employees earlier this year.

Amazon said the latest cuts were intended to streamline operations and redirect resources toward projects delivering direct customer value and commercial impact.

Internal communications indicated that role reductions primarily affected teams within AGI Data Services and AGI Information. The company's AGI division includes work on Nova foundation models, custom AI chips and quantum computing hardware.

Wall Street analysts were broadly positive on Amazon before the development.

Citi analyst Ronald Josey reiterated a Buy rating on July 16 with a $325 price target. KeyBanc also maintained a Buy rating the same day, assigning a $335 price target.

According to TipRanks data, the broader analyst consensus remains a Strong Buy, with an average price target of $318.98, representing an implied upside of approximately 36.41% from current levels.