Amazon’s future looks brighter than ever, but as it opens new campuses in New York City and near Washington, D.C., the retail and cloud-computing giant might have another kind of cloud incoming: that of the trustbusters.
Belief that the company needs to be broken up holds bipartisan appeal. Left-wing activists find themselves agreeing with President Trump, who detests coverage of himself in the Washington Post, owned by Amazon CEO Jeff Bezos. In August, Trump suggested the company and two others were in a “very antitrust situation.”
Legally, few experts see a clear-cut case that Amazon is violating antitrust law, though they can see potential fights brewing.
“No one has really identified a violation,” such as predatory pricing to drive out competitors, said Cornell Law School professor George Hay, who worked at the Justice Department’s Antitrust Division in the 1970s.
Hay said people who believe there’s a case against Amazon generally belong to the “chicken little” or “hipster antitrust” schools of scholarship, which hold big companies responsible for generalized societal inequities or industry flaws rather than harm to the consumer.
Over the past half-century, courts have interpreted antitrust laws so that consumer welfare — such as lower prices — takes priority, moving away from hair-trigger concern about business power, Hay said.
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“Fifty years ago courts were much more hostile to business. So if a big firm in the market lowered its prices, you would see them being challenged, and you would see courts saying there’s maybe something wrong with that,” he said.
Now, “there are a couple of the Bernie Sanders types who want to roll back antitrust law 50 years … And if Bernie Sanders was running the Antitrust Division, he may bring some cases, but he wouldn’t win them,” Hay said.
A telling sign is that there are no major cases pending from Amazon competitors, Hay said. Rivals could have standing to sue, he said, and their absence “suggests that nobody believes there is any there, there.”
Hay said unless Amazon attempts a major merger with another company, the well-lawyered corporate behemoth appears invulnerable.
However, Zephyr Teachout, a Fordham University law professor who unsuccessfully sought the Democratic nomination for New York attorney general this year, said there may well be an antitrust case.
“First we need investigations, because there’s a lot that we don’t know,” she said. “Antitrust authorities at the federal and state levels have been asleep at the wheel.”
Teachout said newly empowered House Democrats could launch antitrust investigations into the company, as could state attorneys general, who are authorized by federal law to do so.
“There’s so much we need to learn. We have to look at the relationship between the different parts of its business and the relations between the company and its retailers,” Teachout said.
“What’s really clear is that the last several decades of hands-off [enforcement] when it comes to tech and concentrated power has not worked and it’s led to monopsony power in different areas,” she said. “Looking at recent jurisprudence, you aren’t going to win all of the fights — but you aren’t going to win any of the fights that you aren’t in.”
Spokespeople for several members of Congress active on tech and antitrust policy matters, including Rep. David Cicilline, D-R.I., the likely new chairman of the House Judiciary Committee’s regulatory and antitrust subcommittee, did not respond to requests for comment.
Amazon announced its new campuses this month with the promise of 25,000 well-paid jobs in each region over the next decade. The expansion comes as the company seeks a $10 billion Pentagon cloud-computing contract and prepares for the federal government’s move to allow agencies to make $53 billion in annual office supply purchases online, much of that expected to come from Amazon.
Although the company appears ascendant, some would-be competitors believe antitrust law is the wrong way to challenge Amazon.
“New technologies in the blockchain space will eventually create an equivalent of Amazon which is distributed and has no central control,” said antivirus software pioneer John McAfee.
McAfee said he has invested “in many of the technologies that will facilitate distributed competition to Amazon,” including Bezop, a start-up working to create a platform where vendors sell as they would on Amazon, with transactions processed using a digital currency that floats in value.
“Let the market decide,” McAfee said.
