Congress Might Be Considering Antitrust Action Against Amazon

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Sat, Jul 15 - 7:07 pm EST | 4 months ago by
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    Lawmakers are reportedly growing concerned that Amazon is swelling to a monopolistic size after the online shopping goliath announced that it would purchase Whole Foods Market Inc., a move that could potentially put the corporation in the government’s crosshairs.

    Investors recently started raising the alarm to shareholders that Amazon could soon face antitrust action in the wake of its purchase of Whole Foods and a slew of other announcements, including a new clothes shopping service called Amazon Wardrobe.

    “I am shorting Amazon today because I have learned that there are currently early discussions and due diligence being considered in the legislative chambers in Washington DC with regard to possible antitrust opposition to Amazon’s business practices, pricing strategy and expansion announcements already made (as well as being aimed at expansion strategies being considered in the future,” wrote hedge fund manager Douglas Kass.

    Amazon’s meteoric growth has seen it emerge as the clear frontrunner in the world of online shopping, but its expansion into other sectors has been met with hesitation in certain corners. Last August, the Fair Trade Commission investigated Amazon for suspicion that it was breaking antitrust laws, and in January, EU regulators coerced Apple and Amazon into ending their audiobook exclusivity practices.

    Now, U.S. lawmakers may be moving in to tackle Amazon’s stateside operations, Kass believes.

    “My understanding is that certain Democrats in the Senate have instituted the very recent and preliminary investigation of Amazon’s possible adverse impact on competition,” he wrote. “But, in the Trump administration we also have a foe against Jeff Bezos, who not only runs Amazon but happens to own an editorially unfriendly (to President Trump) newspaper, The Washington Post.”

    Last May, Trump accused Bezos of weaponizing the Washington Post as a way to undermine his campaign, as then-candidate Trump vowed to clean up Bezos’s “huge antitrust problem.” And in June, Trump took to Twitter to accuse Bezos of not paying “internet taxes.”

    While Congress has largely remained quiet on the issue, Rep. David Cicilline (D-RI) sent a letter to the House Judiciary Committee requesting a hearing over Amazon’s purchase of Whole Foods, stating: “Congress has a responsibility to fully scrutinize this merger before it goes ahead.”

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