US antitrust crackdown on Amazon? Not so far
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.
NEW YORK: US antitrust regulators have shown little sympathy thus far for the plight of brick-and-mortar retailers attempting to merge as a way to survive, as Amazon and ecommerce 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 US$17.2 billion acquisition of rival Rite Aid, even after revisions.
In the end, the companies on Thursday spiked the merger in favour 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 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 Bezos-owned Washington Post, which has aggressively covered the White House.
Estimates vary sharply as to Amazon’s exact share on ecommerce. Some reports have said Amazon’s share of the online market is as high as 50 per cent, but others put the figures much lower. Critics say Amazon should be required to disclose more detail about its sales.
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 US$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 anti-trust 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 sceptical 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-tobusiness office goods sales. — AFP
Barry Lynn, authority on competition policy