Trump Says Bezos Guards Amazon on Antitrust With Washington Post
Trump Accuses Washington Post of Being ‘Lobbyist for Amazon’
(Bloomberg) -- President Donald Trump resumed his public campaign against billionaire Jeff Bezos by calling his newspaper, the Washington Post, an “expensive lobbyist” for Amazon.com Inc. and alleging the online retailer has a “huge antitrust” problem.
Trump used Twitter on Monday to repeat his suggestion -- without offering any evidence -- that the newspaper is "used as protection against antitrust claims which many feel should be brought" against the online retailer. He went on to misstate Amazon’s role in an internet sales tax case and the company’s impact on postal service revenues.
Trump’s latest attacks on the Washington Post follow a report in the newspaper Sunday about his administration’s deliberations on North Korea that Trump criticized in a tweet minutes before the new barrage against Bezos.
Amazon, which Bezos founded, fell as much as 2.4 percent after Trump’s tweets criticizing the company, before recovering some of that loss. The shares were down 0.4 percent to $1,806.03 at 12:19 p.m. in New York.
Trump’s administration could act against Amazon through antitrust, the U.S. Postal Service, consumer protection probes or even stoke the mounting push against their government contracting business.
The traditional independence and slow pace of investigations by the Justice Department or Federal Trade Commission, however, would likely limit Trump’s ability to direct antitrust actions against the company, which also has the legal benefit of being popular with consumers. The postal service is an independent federal agency supervised by a board of governors appointed by the president.
Trump has a mixed record on his calls for antitrust enforcement. He said he would oppose the merger between AT&T Inc. and Time Warner Inc, and the Justice Department did so. His criticism of CNN, which Time Warner owns, created an opening for those defending the merger, which a judge approved in June. The Justice Department is appealing the ruling.
Trump has repeatedly attacked Amazon, the Post and Bezos, who once mockingly tweeted, before Trump was president, that he would send Trump to space on one of his rockets. On Monday, he also returned to debunked claims about sales tax collection and the online retailer’s use of the U.S. Postal Service.
“The Amazon Washington Post has gone crazy against me ever since they lost the Internet Tax Case in the U.S. Supreme Court two months ago. Next up is the U.S. Post Office which they use, at a fraction of real cost, as their ‘delivery boy’ for a BIG percentage of their packages,” Trump said in a Twitter posting.
Amazon wasn’t involved in the Supreme Court case, which pitted South Dakota against three smaller online retailers. The court voted 5-4 to let state and local governments require that online retailers collect sales taxes from customers, even if the merchant doesn’t have a store or warehouse in the state.
Even before the ruling, Amazon charged consumers in states with a sales tax, though only when selling products from its own inventory. About half its sales involve goods owned by millions of third-party merchants, however, many of which may now face new tax burdens.
That issue is now playing out in individual states. Key questions are whether states put the burden of tax collection on marketplaces like Amazon or the individual merchants and whether there are exemptions for small businesses not meeting a sales threshold. Either way, a new tax burden is unlikely to blunt Amazon’s momentum where average order sizes are estimated to be about $40 and sales taxes aren’t a primary shopper consideration.
In April, after another set of broadsides on the online retail giant, Trump created a task force to review the business practices of the Postal Service. Amazon regularly uses the Postal Service to complete what’s called the “last mile” of delivery. USPS, legally prohibited from charging shippers less than its delivery costs, disputes Trump’s claim that it loses money because of the contract.
Trump’s attacks against the Washington Post followed a report in the newspaper Sunday that he was venting behind the scenes over a lack of progress in negotiations with North Korea on eliminating its nuclear program. Shortly before criticizing the Post, the president tweeted that "all of Asia is happy" with the progress and noted that North Korea hadn’t conducted a ballistic missile or nuclear test in months.
“But the Fake News is saying, without ever asking me (always anonymous sources), that I am angry because it is not going fast enough,” Trump said. “Wrong, very happy!”
Fifteen minutes later he began tweeting about Amazon.
‘Gone Crazy’
Trump followed up the tweet about the Postal Service and taxes minutes later: "In my opinion the Washington Post is nothing more than an expensive (the paper loses a fortune) lobbyist for Amazon. Is it used as protection against antitrust claims which many feel should be brought?”
Brad Parscale, the manager for Trump’s 2020 reelection campaign, is also said to have complained about the company to Trump.
Amazon spent $3.47 million on lobbying in the second quarter of 2018, a company quarterly record, according to Friday filings with the government. The Washington Post does not lobby.
The company reports earnings on Thursday.
Amazon has been the subject of intense scrutiny among a young generation of antitrust activists, who argue that the current antitrust enforcement framework is ill-equipped to tackle Amazon’s dominance and the potential harm it poses to competition.
One of the architects of the argument, Lina Khan of the Open Markets Institute think tank, will be joining Federal Trade Commissioner Rohit Chopra’s office.
If the administration opens an antitrust inquiry, enforcers would have to show the company has a monopoly in a market and that it abused its dominant position. But enforcers are intently focused on harm to consumers, and Amazon’s retailing platform is beloved by its customers for its breadth and convenience.
An Amazon company spokeswoman, Jodi Seth, declined to comment on the tweets Monday.
--With assistance from Greg Stohr.
To contact the reporters on this story: Terrence Dopp in Washington at tdopp@bloomberg.net;Justin Sink in Washington at jsink1@bloomberg.net;Ben Brody in Washington at btenerellabr@bloomberg.net
To contact the editors responsible for this story: Derek Wallbank at dwallbank@bloomberg.net, Mike Dorning, Larry Liebert
©2018 Bloomberg L.P.