An­titrust crack­down on Ama­zon? Not so far

Kuwait Times - - BUSINESS -

US an­titrust reg­u­la­tors have shown lit­tle sym­pa­thy thus far for the plight of brickand-mor­tar re­tail­ers at­tempt­ing to merge as a way to sur­vive, as Ama­zon and e-com­merce roils the world of shop­ping. The Fed­eral Trade Com­mis­sion last year blocked Sta­ples' at­tempt to buy ri­val Of­fice De­pot, re­ject­ing the sta­tion­ary chains' ar­gu­ments that they were fight­ing for sur­vival against a grow­ing set of com­peti­tors, in­clud­ing Ama­zon. The FTC also balked at Wal­greens Boots Al­liance' at­tempted $17.2 bil­lion ac­qui­si­tion of ri­val Rite Aid, even af­ter re­vi­sions. In the end, the com­pa­nies on Thurs­day spiked the merger in fa­vor of a pared-down trans­ac­tion. But reg­u­la­tors have shown lit­tle ap­petite for tak­ing on Ama­zon as it has ex­panded from an on­line book­seller into a mar­ket­place for ev­ery­thing from house­hold clean­ers to fancy elec­tron­ics, as well as a pur­veyor of crit­i­cally­ac­claimed and hit movies and tele­vi­sion se­ries.

Some are call­ing for tougher ac­tion from US Pres­i­dent Don­ald Trump, who said dur­ing the pres­i­den­tial cam­paign that Ama­zon chief ex­ec­u­tive Jeff Be­zos has a "huge an­titrust prob­lem." Last week, Trump is­sued a cryptic tweet that ap­peared to ques­tion whether Ama­zon was pay­ing enough taxes. Trump has also taken is­sue with the Be­zosowned Wash­ing­ton Post, which has ag­gres­sively cov­ered the White House. Es­ti­mates vary sharply as to Ama­zon's ex­act share on e-com­merce. Some re­ports have said Ama­zon's share of the on­line mar­ket is as high as 50 per­cent, but oth­ers put the fig­ures much lower. Crit­ics say Ama­zon should be re­quired to dis­close more de­tail about its sales.

Dom­i­nant player on­line

Barry Lynn a lead­ing author­ity on competition pol­icy, at the Wash­ing­ton-based New Amer­i­can Foun­da­tion think tank, has called for an an­titrust in­ves­ti­ga­tion into Ama­zon's $13.7 bil­lion Whole Foods takeover an­nounced in June. "They dom­i­nate re­tail on­line," Lynn said. "That's huge power across the part of the econ­omy where all the fu­ture growth will be." And long­time con­sumer ad­vo­cate Ralph Nader said, "With ev­ery move of this Go­liath, Ama­zon is invit­ing a thor­ough an­titrust in­ves­ti­ga­tion." "This com­pany is break­ing records for de­stroy­ing Main Street and hol­low­ing out com­mu­ni­ties through such mech­a­nisms as preda­tory pric­ing, and for many years in the past, avoid­ing state sales taxes."

Yet some ex­perts are skep­ti­cal of an an­titrust case against Ama­zon. "It's not an an­titrust vi­o­la­tion just to be dom­i­nant. You have to per­pet­u­ate or at­tain your dom­i­nance through an­ti­com­pet­i­tive means," said Daniel Crane, a pro­fes­sor at the Univer­sity of Michi­gan Law School spe­cial­iz­ing in an­titrust. "Un­der cur­rent US an­titrust prin­ci­pals it's hard to see how any­thing Ama­zon is do­ing re­ally is a vi­o­la­tion of an­titrust law. It's not ob­vi­ous to me."

Reg­u­la­tors thus far have fo­cused on an­titrust in terms of competition be­tween goods, but whether that fo­cus should shift to competition be­tween "ecosys­tems" like Ama­zon's is a "re­ally im­por­tant unan­swered ques­tion so far," Crane said. At­tor­neys rep­re­sent­ing Sta­ples and Of­fice De­pot said the plight of the com­pa­nies re­sem­bled "pen­guins on a melt­ing ice­berg" as they faced the loom­ing threat that "Ama­zon Business" poses as com­peti­tor in business-to-business of­fice goods sales.

But US District Judge Em­met Sul­li­van sided with the FTC, rul­ing in May 2016 that there was not enough ev­i­dence that Ama­zon "is likely to re­store lost competition in the business-to­busi­ness space in a timely and suf­fi­cient man­ner." While Ama­zon en­joyed "sev­eral undis­puted strengths," in­clud­ing brand recog­ni­tion, cut­ting edge in­no­va­tion and global reach, it has "sev­eral weak­nesses" in en­ter­ing the mar­ket, in­clud­ing that it has not made many bids in the mar­ket and had yet to win a pri­mary ven­dor con­tract. On Wed­nes­day, Sta­ples agreed to be bought by pri­vate eq­uity firm Sycamore Part­ners for $6.9 bil­lion.—AFP

SEAT­TLE: In this Thurs­day, April 27, 2017, file photo, peo­ple walk past an Ama­zon Go store, cur­rently open only to Ama­zon em­ploy­ees. — AP

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