Simply by conducting business as usual, Amazon has accomplished a political rarity: uniting the interests of President Trump with those of two frequent foils, Democratic challenger Elizabeth Warren and the European Union.
Since winning the White House in 2016, Trump has used the Seattle-based e-commerce provider of paying insufficient taxes and exploiting the US
Warren, a senator from Massachusetts and a frequent target of Trump's tweets, has said she would break Amazon up, partly because it competes with its own customers.
Now, The European Commission, the regional trading bloc's administrative body, is starting its own investigation into Amazon's practice of selling some of the same merchandise as the retailers who use its e-commerce platform.
The dual role of marketplace and retailer is given Amazon the capability of turning business customers' own data against them, the regulators said.The firm's agreement with retail clients allows Amazon to analyze and use the data obtained by monitoring platform activity, and preliminary fact-finding by the commission indicates the company is competitively sensitive. Knowledge.
"European consumers are increasingly shopping online," said Commissioner Margrethe Vestager, the top European antitrust regulator. "Ecommerce has boosted retail competition and brought more choice and better prices. We need to ensure that large online platforms do not eliminate these benefits through anti-competitive behavior."
The investigation, which Bank of America analyst Justin Post said may last as long as two years, comes at a pivotal moment for the company. Growing scrutiny from U.S. Pat. regulators have been heightened by the 2020 presidential campaign in which a broad field of democratic candidates has pledged support for liberal goals from raising the minimum wage to expanding consumer protection.
"My administration will make big, structural changes to the tech sector. promote more competition ̵
Giant corporations like Amazon have too much power — almost half of all e-commerce goes through Amazon . My administration will make big, structural changes to the tech sector to promote more competition — including breaking up Amazon, Facebook, and Google. #BreakUpBigTech pic.twitter.com/SIqJohvyvf
– Elizabeth Warren (@ewarren)
July 15, 2019
Earlier this year, the Department of Justice and the Federal Trade Commission agreed to divide oversight of Amazon, Google, Apple, and Facebook between them, and last week, the Federal Trade Commission reportedly backed by $ 5 billion settlement with Facebook over privacy complaints.
In 2018, the European Commission fined Google $ 5.1 billion for anticompetitive practices, amounting to large amounts compared to $ 103 billion in available funds at the Mountain View, California-based company. the time. It also uses the company's open source Android operating system to install the Google Search and Google Chrome apps on devices in order to store the Google Play app.
Amazon, founded by billionaire Jezz Bezos who also owns the Washington Post faces similar risks. Europe might take steps from the company to forcing changes in its operations, including a breakup, according to Fitch Ratings, and firm that analyzes corporate debt.
Trump himself customs CNBC in an interview just weeks earlier that "there is something going on on in terms of monopoly, "the number of European regulatory actions against large American tech companies including Amazon and Apple. "We should do what they are doing," said the president.
As for Amazon, the e-commerce company has rejected claims that it exploits customers or competes unfairly. An Amazon executive surveyed that position earlier this week, when he joined representatives of tech standouts Facebook, Apple, and Google to field questions from the House antitrust committee about their compliance with U.S. competition laws.
Amazon faces stiff rivalry in retail, an industry "as old as human experience," said Nate Sutton, the firm's associate general counsel for competition. This is a success that is growing faster than Amazon's own. "
" "Amazon is selling these sellers because we have a strong incentive to do so," he said. our stores are attractive to our customers. Our selling partners provide the majority of new products in our stores. "
That's not the whole story, however, said Stacy Mitchell, co-director of the Institute for Local Self-Reliance, a 45-year-old public interest research group. Many small businesses that have their own e-commerce operations have been forced to sell products on Amazon because the go-to site for online shoppers: The company garnered more than half or $ 510 billion in online retail spending last year, up from just one -third in 2014.
That was the experience of Gazelle Sports, a Michigan sports apparel store that turned to Amazon after a steady stream of online shoppers generated through positive Google and Yelp reviews began dodging.
"Virtually every manufacturer and retailer of consumer goods in America faces this same predicament, "Mitchell told the House panel. "In order to reach more than half of the online market, they have to sell through a platform operated by one of their most aggressive and formidable competitors. This is a bitter pill. It means handing over to Amazon their customer relationships, their product expertise
Democrats, who say Amazon and others have benefited from lax regulation to fuel the growth of the internet and related businesses in the mid-1990s, were skeptical.
" "There's a growing consensus among venture capitalists and startups that have a kill zone around Google, Amazon, Facebook and Apple that new startups from entering the market," said Rep. David Cicilline, the Rhode Island Democrat who is chairman of the subcommittee. "The combination of high network effects, high switching costs and the self-reinforcing advantage of data can result in a" winner take all market that shields the dominant firms. "
While Amazon has a market value of $ 974 billion, making it one of the world's largest companies, its size does make it a villain, said Rep. Jim Sensen burner, the top Republican on the antitrust panel. He urged lawmakers to take a "fair and balanced" approach, much as his GOP colleagues advocated during a House Financial Services Committee hearing on Facebook's cryptocurrency project.
"We should not rush to change the antitrust laws or break up companies by congressional fiat based upon false notions that are big is bad or that everything at the company must be presumed to be anticompetitive, "Sensenbrenner said. Companies often become big, he said," simply by providing better service or product than the other companies in the marketplace. ”