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Here's what Trump could do to Amazon



President Donald Trump renewed his longtime attack on Amazon.com Inc. with an early tweet on Thursday. But what action can he actually take against the online retail giant?

He could lobby for consumer protection, privacy and antitrust issues. He could also increase his support by allowing states to charge VAT on third-party purchases from Amazon, or trying to get the postal service to charge more for delivery of parcels. And he could thwart Amazon's efforts to win a billion dollar Pentagon cloud service contract.

Even with these powers, Trump's ability to act has limits. Requests by the Ministry of Justice or the Federal Trade Commission could take years and carry a high burden of proof. The FTC and other law enforcement agencies oversee their independence, as does the Post Board of Governors. Changes to the tax code would require the involvement of Congress, which has just completed a tax reform and may no longer be prepared to resume negotiations.

The feud makes the world's most powerful man against one of the largest companies in the world – a global titan with $ 684 billion market capitalization and more than half a million employees. At stake are reputation, sales, and possibly the ability to continue disrupting the markets in retail redesign.

Any move by Trump perceived as revenge against Amazon founder Jeff Bezos for his ownership of The Washington Post would compromise with President Richard Nixon, who threatened the broadcasting licenses at the height of the Watergate scandal ,

Amazon did not respond to a request for comment. While Amazon rose along with most US stocks on Thursday, Trump's attacks helped to boost the headwind of the stock on Tuesday
and on Wednesday. A decline of 8 percent marked Amazon's biggest two-day decline in two years. Lindsay Walters, White House spokeswoman, told reporters aboard Air Force One Thursday that there are no concrete plans to crack down on the company. "The president has expressed his concerns with Amazon," she said.

Looking for antitrust investigation into the dominance of Amazon

When the administration opens an antitrust investigation, enforcers would have to show that the company has a monopoly in a market and that it abuses its dominant position. But enforcers are focused on harm to consumers, and Amazon's retail platform is popular with its customers for its breadth and convenience.

Nevertheless, the company is not without criticism. Lina Khan, Director of Legal Policy at The Open Markets Institute, a Washington think tank advocating stronger antitrust enforcement, believes that Amazon should be audited. One problem area is the way Amazon information Utilizing third-party vendors to compete better With these vendors offering to undercut prices or sell their own versions of their products, Khan said.

Photographer: Peter Foley / Bloomberg [19659017] "It is possible to believe two things: First, it would be deeply troubling and inappropriate for Trump's personal animus towards Jeff Bezos to be the basis of a cartel law suit, and second, cast amazement in the Amazon and conduct anticompetitive, antitrust concerns on investigation, "she said.

Trump's Department of Justice has already shown unorthodox thinking about antitrust enforcement. Last year it sued AT & T Inc. to stop its acquisition of Time Warner Inc. – which owns CNN, another frequent Trump target. The move surprised many antitrust attorneys by not competing directly with each other.

Competing retailers have long expressed concerns about Amazon's potential to drive them out of business, but executives are skeptical when complaints come from rivals because they want to see strong competition 1965-9013] Trump's complaints about Amazon that pay no sales tax , match those of states and local jurisdictions that have been complaining about a loss of tax revenues as sales shift away from stores

Trump supports bipartisan bills in Congress that would allow states to levy sales taxes because of the US policy should ensure that "those who compete with Amazon are at par," said White House spokesman Raj Shah Thursday

In 2017, Amazon, which also supports the bills, began sales tax in states they levy, but the co mpany does not charge sales tax if s ie buy from third-party sellers on the website. These sales account for about half of the company's volume.

Governments and local governments are losing about $ 5 billion a year in taxes on Amazon marketplace trading because traders are not collecting them and customers are not paying for it, according to James Thomson, a former Amazon employee who is now one Is a consultant for e-commerce retailers. The company does not break how much revenue is generated through third party sales.

The Trump administration also has the US. Supreme Court to collect state and local governments billions of dollars sales tax from online merchants. Judges are expected to hear arguments next month that focus on a South Dakota law requiring the collection of sales taxes from major Internet retailers, even if they do not have brick-and-mortar stores in that state. A decision is expected at the end of June.

Amazon charges higher postage

Trump has said that Amazon should charge more for delivery.

"Why is the United States Post, which loses many billions of dollars a year, while Amazon and others demand so little money to deliver their parcels, making Amazon richer and the post dumber and poorer?" Said Trump its 45 million followers in January.

A sudden increase in postage costs According to a Citigroup report in April, Amazon would cost about $ 2.6 billion a year. This report predicted United Parcel Service Inc. and FedEx Corp. would also increase prices in response to an increase in the postal service.

The Postal Inspectorate, which fixes tariffs, has a vacancy among its five commissioners, the

But even the postal service would be a loser. Despite Trump's claims, Amazon is a valuable customer. And the losses of the postal service have little to do with Amazon, but rather with the large health obligations and the dwindling use of first-class mail. USPS raises some of the lowest stamp prices in the world.

Amazon vs. Amazon in the Cloud Wars

Amazon, which has asked for government contracts outside the post office, could also be opposition to its bid, the sole supplier of the multi-billion dollar price for Defense Department's cloud services Awarded in September and Leader in the Amazon

The company's cloud deal with the CIA for $ 600 million has put it in pole position The award, which could take up to 10 years and that Advancing companies in the race for future contracts as the Pentagon modernizes its technology.

The Pentagon's announcement in early March to choose a vendor for the contract has led to criticism from Microsoft Corp., International Business Machines Corp. and industry groups that have competitors such as Oracle Corp.

And Legislators mandated to fund the Pen Tagon have asked the Department to certify the source-based award in the language that was included in the most recent statement of expenditure.

Trump could pass an executive measure stating that the government can only conclude contracts with smaller companies, although the president's remarks could support Amazon's case if he decides to bring a legal challenge, John Hudak said senior scientist at the Brookings Institution.

"President's own rhetoric about Amazon is likely to hinder his ability to take executive action," Hudak said.

– With the support of Lynnley Browning


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