As the winner of the White House in 2016, Amazon has achieved a political rarity: uniting the interests of President Trump with those of two frequent foils, Democratic challenger Elizabeth Warren and the European Union. Trump has accused the Seattle-based e-commerce giant of paying insufficient taxes and exploiting the US
Warren, a senator from Massachusetts and a frequent target of Trump's tweets, said she would break Amazon up, partly because she competes with her own customers
Now, the European Commission, the regional trading bloc's administrative body, is launching its own investigation into Amazon's practice of selling some of the same merchandise as retailers who use its e-commerce platform
The dual role of marketplace and retailer gives Amazon the capability of turning business customers' own data against them, the regulators said. The company's agreement with retail clients allows Amazon to analyze and use the data obtained from the monitoring platform activity, and the preliminary fact-finding by the commission indicates that the company is leveraging competitively-sensitive knowledge.
"European consumers are increasingly shopping online," said Commissioner Margrethe Vestager, the top European antitrust regulator. "E-commerce has boosted retail competition and brought more choice and better prices."
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. regulators has 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 protections
"My administration will make big, structural changes to the tech sector to promote more competition ̵
Giant corporations like Amazon have too much power-in fact, 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 the oversight of Amazon, Google, Apple and Facebook between them, and last week, the Federal Trade Commission reportedly backed $ 20 billion in US $ 5 billion in US $ 5 billion in anti-competitive practices, an amount that appears to be large, compared to $ 103 billion in available funds. the time. It also ordered the company to halt problematic behavior that included forcing phonemakers to use the open-source Android operating system to install Google Search apps and Google Chrome apps on devices to connect to Google Play app store
Amazon, founded by billionaire Jezz Bezos who also owns the Washington Post faces similar risks.
Trump himself told CNBC in an interview just weeks earlier that "there is something going on," says Fitch Ratings, a company that analyzes corporate debt. in terms of monopolies, "citing the number of European regulatory actions against large American tech companies including Amazon and Apple. "We should be doing what they're doing," said the president.
As for Amazon specifically, e-commerce company has rejected claims that it exploits customers or competes unfairly. An Amazon executive underscored that position earlier this week, when he joined representatives of tech standouts Facebook, Apple, and Google to field questions from the House antitrust committee on their compliance with U.S.
Amazon faces stiff rivalry in retail, an industry "as old as human experience," said Nate Sutton, the company's general counsel for competition. Its success depends on third-party sellers whose sales are growing faster than Amazon's own
"Amazon supports these sellers because we have a strong incentive to do so," he said. "Our sales partners provide the vast 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 it's the go-to site for online shoppers: The company garnered more than half of $ 510 billion in online retail spending last year, up from just one -third in 2014.
This was the experience of Gazelle Sports, a Michigan sports-apparel store that turned to Amazon after a steady stream of online buyers generated through positive Google and Yelp reviews started dwindling. and retailer of consumer goods in America faces the same trouble, "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. "
Democrats, who say Amazon and others have benefited from lax regulation meant to fuel the growth of the internet and related businesses in the mid-1990s, were likewise skeptical. There is a growing consensus among venture capitalists and startups that there is a kill zone around Google, Amazon, Facebook and Apple that prevents new startups from entering the market, "said Rep. David Cicilline, the Rhode Island Democrat who is the chair of the subcommittee. "The combination of high networking effects, high switching costs and the self-reinforcing advantage of data can result in a 'winner take all' market that shields dominant companies."
While Amazon has a market value of $ 974 billion, making it one of the world's largest companies, its size does not make it a villain, said Rep. Jim Sensenbrenner, the top Republican on the antitrust panel. He urged lawmakers to take a "fair and balanced" approach, as his GOP colleagues advocated during a House Financial Services Committee hearing on Facebook's cryptocurrency project
"We should not rush to amend antitrust laws or break up companies by congressional fiat based on false notions that being big is necessarily bad or that everything a big company should be supposed to be anticompetitive, "Sensenbrenner said. Companies