Amazon Misses Trump, Badly – The New Republic

Amazon Misses Trump, Badly – The New Republic

Did Amazon really imagine that smoother sailing lay ahead after Joe Biden took office last year? According to a recent report from The Wall Street Journal, chronicling the company’s increasingly pugilistic approach to dealing with politicians, regulators, and bureaucrats in Washington, D.C., it indeed seems to be the case that the firm believed the change in administration was going to be a boon. Turns out, no!
In fairness, Amazon’s optimism wasn’t unrealistic. Democrats have historically been kind to tech companies, turning a blind eye as they gobbled up market share and grew into behemoths. Even as Amazon wiped out small businesses, engaged in ruthless tactics, and reached near-monopoly status in its original stomping grounds (the publishing industry), the bipartisan consensus was that it—like the other tech giants—was at worst benign and at best a sign of America’s innovative might. Jay Carney, the company’s spokesperson, had previously done a stint as Barack Obama’s press secretary and was seen as being close to many figures inside the administration.

And hey, Donald Trump was out of office. For years, Trump had publicly attacked Amazon, threatening it with vaguely stated antitrust actions. “We are looking at [antitrust] very seriously,” Trump said in a November 2018 interview with Axios. “Look, that doesn’t mean we’re doing it, but we’re certainly looking and I think most people surmise that, I would imagine.” In several tweets, he accused the company of not paying taxes (this has often been true!); of taking advantage of the Postal Service, which gave it an unfair advantage (this is also arguably true); and in some cases of violating antitrust laws.

But Trump was never actually particularly serious about going after Amazon. He had broad tools at his disposal to do so—he could have nominated people to the USPS board of governors with a writ to renegotiate with the company or, for that matter, appointed antitrust hawks to key positions at the Justice Department and Federal Trade Commission. He didn’t. Instead, this was typical Trump bluster: all bark and no bite. In typical Trump fashion, petty revenge was the driver of his occasional threats, rooted in the fact that he frequently received negative coverage from The Washington Post, which is owned by Amazon founder—and until very recently CEO—Jeff Bezos.

It’s true that there has lately been no small amount of antitrust chatter from right-wing circles, but much of that is still rhetorical and useless. Conservatives have focused on monopolistic (or, in Amazon’s case, monopsonistic) tech firms for the purposes of wrapping them into culture-war complaints—overhyped free speech issues and bogus accusations of censorship. Instead, the real energy for meaningful reform and antitrust scrutiny, based in corporate power and its impact on labor and markets, has come from Democrats. Biden’s appointments to key posts in the Department of Justice and, particularly, the FTC reflect a keen interest in advancing antitrust causes.

If Amazon was surprised by these developments, then it wasn’t paying attention. Now the company is in trouble and lashing out. It has lately developed a reputation for showing a “middle finger” to Congress, to quote one former Republican aide who spoke to the Journal. It has certainly alienated members of Congress more than many of its big tech peers; this strategy has only ensured that the firm would remain in lawmakers’ crosshairs. Carney, who was hired specifically because of his deep connections to Beltway Democrats, has taken to sending furious messages to White House chief of staff Ron Klain about “perceived slights” against the company.

Washington has responded in kind to this charmless offensive: There have been an increasing number of bills that explore breaking up the company or regulating it in ways that would profoundly change the way it does business. The FTC is currently exploring whether Amazon’s acquisition of MGM, the storied Hollywood film studio, would violate antitrust laws.

Some I have spoken to in the publishing industry, meanwhile, see the Department of Justice’s recent blocking of Penguin Random House’s acquisition of Simon and Schuster as a potential dry run for action against Amazon. That action, if successful, would reframe the country’s approach to antitrust. Regulators for years have only applied what is known as the “consumer welfare standard”—which essentially argues that as long as prices don’t rise, then everything is hunky-dory—to regulating gigantic corporations.

But by stopping Penguin Random House’s acquisition of Simon and Schuster, the DOJ was doing something different: It argued that the company’s market power would drive down advances for authors, thus creating a less robust market and, by extension, literary culture. “We hope that the outcome of this is a decision that will allow DOJ to move forward against Amazon,” Authors Guild president Mary Rasenberger told me last fall. Many in the industry agree with her and hope that the Department of Justice will fully abandon the consumer welfare standard and go after Amazon at full steam.
Amazon’s recent struggles aren’t limited to its perversion of the marketplace. The company’s treatment of its warehouse employees and delivery drivers, who are aggressively monitored and have jobs that are often extremely taxing, continues to come under intense scrutiny. A unionization effort in Bessemer, Alabama, failed last year, but those workers are getting a second chance to form a union, all while other efforts are percolating across the country. The company’s stock price has fallen over the last year, even as the S&P has gone up. “Wall Street seems to be getting restless,” says Amazon watcher Brad Stone.

Of course, Amazon’s fundamental businesses—advertising, cloud computing, and its online retail platform—remain robust, but its forays into physical retail have been less successful. The company announced earlier this month that it was shuttering nearly all of it physical retail stores as it retooled its approach to focus more on clothing stores. Amazon is still extraordinarily powerful and profitable, even as it continues to spend wildly to continue growing into new frontiers. But a belated counterpunch seems on the verge of materializing. Amazon should’ve seen it coming.

Alex Shephard is a staff writer at The New Republic.

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