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One of Amazon's first employees supports breaking up the company

Megan Henney

In the early days of Amazon, Paul Davis played a pivotal role in building the fledgling company from the ground up. Now, more than two decades after he left, Davis supports tearing apart the e-commerce behemoth.

Davis, who was CEO Jeff Bezos' second hire, coming on board in 1994 as a member of the technical staff before the company even launched its website, told Recode that he believes Amazon needs to separate from the Amazon Marketplace, which allows more than 2.5 million third-party businesses to sell products to Amazon customers, from the company's core retail business.

"There's clearly a public good to have something that functions like the Amazon Marketplace. … If this didn't exist, you'd want it to be built," Davis told Recode. "What's not valuable, and what's not good, is that the company that operates the marketplace is also a retailer. They have complete access to every single piece of data and can use that to shape their own retail marketplace."

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Davis is referring to allegations that Amazon is exploiting some merchants and abusing its marketplace dominance — which has drawn the attention of regulators and lawmakers both in the U.S. and abroad. Critics point to constantly increasing fees for vendors and Amazon's push of its own brands as potential evidence of a monopoly.

"They're not breaking any agreements," Davis added. "They're just violating what most people would assume was how this is going to work: 'I sell stuff through your system, [and] you're not going to steal our sales.'"

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Amazon did not immediately respond to a FOX Business request for comment.

In mid-September, Amazon came under investigation by federal officials, who tried to determine whether the online retailer was using its marketplace to stifle competition. At least three attorneys and one economist began conducting interviews with small businesses that covered a range of topics, including what percentage of revenue they derived from Amazon versus other marketplaces like Walmart and eBay.

Democratic presidential candidate Elizabeth Warren has also called for the break-up of Amazon, accusing it of using its immense power to either force companies to sell at discounted rates or to copy the goods they sell and then offer their own branded version.

Davis, who said he was "intimately involved" with getting the company started, wrote the backend software for the first Amazon.com website from 1994 into 1996. He left the company, "despite significant stock and other inducements to remain," he has previously said, "because I am a technical person and had little interest in playing a role in the growth of the company."

Earlier this week, Davis shared a New York Times article, which included more than 60 interviews with current and former Amazon employees, sellers, suppliers and consultants, about how the retailer allegedly squeezes the businesses for more money and punishes them if their items are available for even a "penny less elsewhere."

"For nearly 2 decades Amazon has used its control of its marketplace to strengthen its own hand as a retailer," Davis wrote. "This should not be allowed to continue."

While Davis said he still marvels at the empire that Bezos built -- he called it an "amazing story" -- but stressed it's not all positives.

"It's fine to celebrate and be optimistic and positive about what the company represents for consumers," he told Recode. "But you also have to ask seriously, what does the company represent [to us] as citizens, as employees. And unfortunately, you have to be incredibly naive not to see that the answers to those questions are nowhere near as positive."

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