By Craig Wilson
This post 10 Reasons Amazon Could Face Antitrust Action appeared first on Daily Reckoning.
The announcement of Amazon.com’s plan to buy Whole Foods for an estimated $13.7 billion has raised the stakes on the business and growing antitrust concerns.
If the deal is finalized, it is believed that it could upend the grocery industry as a whole.
Waiting in its way is a Trump administration that has significant issues with the leadership at Amazon and the “Everything Store.”
Here’s 10 reasons why Amazon might find itself facing antitrust action from the government:
The Trump Factor
What began during the 2016 election cycle as a verbal sparring match between Trump and Amazon CEO, Jeff Bezos has only escalated. The major difference now? Donald Trump is president.
Their rivalry has played out significantly in the media where The Washington Post, owned by Bezos, has been a major critic of the president and his leadership in the White House.
In return, Trump has shot back various times via Twitter. The most recent round last month leaves considerable reason to believe that the administration may be heavily inclined toward taking antitrust legal action against the Amazon giant.
So many stories about me in the @washingtonpost are Fake News. They are as bad as ratings challenged @CNN. Lobbyist for Amazon and taxes?
— Donald J. Trump (@realDonaldTrump) July 25, 2017
Is Fake News Washington Post being used as a lobbyist weapon against Congress to keep Politicians from looking into Amazon no-tax monopoly?
— Donald J. Trump (@realDonaldTrump) July 25, 2017
The #AmazonWashingtonPost, sometimes referred to as the guardian of Amazon not paying internet taxes (which they should) is FAKE NEWS!
— Donald J. Trump (@realDonaldTrump) June 28, 2017
Taxes, Trade and Foreign Investment
Amazon, for all its growth and monetary traction, continues to be a company based around tax exemptions. Trump holds the ability to threaten its business and profit margins through greater tax pressure, public scrutiny and even protectionist policy.
Only 13 percent of Amazon’s profits went to federal, state, local and foreign taxes from 2007 through 2015.
The Tax Justice Blog found that Amazon paid just a 9.3 percent effective federal income tax between 2008 and 2012.
Then the issue of foreign investment arises. If Amazon seeks to take a similar approach to Apple and offshore its wealth, it could still face considerable opposition. While there is a clear difference between taxation and foreign investment, the Trump administration could go its own way on antitrust actions.
By implementing greater protectionist policy, the Trump administration could still enact antitrust principles and hit Amazon’s business model at its core. Such a move could place greater tariffs on imports and drive up costs that Amazon thrives on.
Retail Apocalypse
Amazon might not be the root cause of the squeeze seen in the retail sector, it is the effect.
As seen in a July 2017 report that MarketWatch cited, “Reorg First Day, a provider of news, commentary and analysis on issues affecting the distressed-debt and leveraged finance markets, …read more
Source:: Daily Reckoning feed
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