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Amazon Is Getting Too Big and the Government Is Talking About It (marketwatch.com) 205

An anonymous reader quotes a report from MarketWatch: Fresh off its biggest Prime Day yet, the Whole Foods Market bid, and a slew of announcements including Amazon Wardrobe, Amazon.com Inc. was the subject of two investor calls Thursday that raised concerns that it is getting too big. In one case, hedge-fund manager Douglas Kass said government intervention could be imminent. "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 Kass, head of Seabreeze Partners Management. "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 said. "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."

Kass said he thinks the government "discussions may have just begun and may never result in any serious effort to limit Amazon's growth plans." But he has been writing a series of columns about whether we've reached "peak Amazon," and said in an earlier column that the Whole Foods deal puts "Amazon's vast power under the microscope." "Is Amazon a productive change agent and force for the good of the consumer by virtue of a reduction in product prices? Or is Amazon's disruption of the general retail business a destroyer of jobs, moving previously productively employed workers into the unemployment line?" he asked.

Amazon Is Getting Too Big and the Government Is Talking About It

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  • Disruption (Score:5, Interesting)

    by GLMDesigns ( 2044134 ) on Thursday July 13, 2017 @05:26PM (#54803843)

    Or is Amazon's disruption of the general retail business a destroyer of jobs, moving previously productively employed workers into the unemployment line?

    Yup. Same as xerox copying machines moved previously employed secretaries (see the massive secretarial pools in older movies) to the unemployment lines.
    And how cranes and bulldozers put laborers out of business.
    And how container ships put dockworkers out of business.
    And ...

    The real concern is not Amazon being more efficient and more fun to use than a mom-and-pop bookstore, music store, etc... but what happens when automation in Amazon's warehouses replace 90% of their employees.

    • by imgod2u ( 812837 )

      If history is any indicator, there will be a period of time when those displaced workers are unemployed and on welfare. But they will represent a smaller and smaller proportion of the population due to population increase. So their welfare burden will be mitigated. Then they'll die/retire and the new generation that springs up will be more capable and skilled, having gone through better education systems born out of a need to produce employable people. And new categories of jobs will spring up as new servic

      • I was kind of wondering where your comment was going.... until the second paragraph kicked in. Yea, I believe you are correct that our public education system has become something other than what most desire. We have seen where the "everyone gets a trophy" mentality will lead us. We have seen where the "No one left behind" will lead us. It did nothing to prepare the next generation for the realities of life.

        As for the US, UK, Japan not being there in the future. I will disagree with that statement.

      • by Altrag ( 195300 )

        But they will represent a smaller and smaller proportion of the population due to population increase

        That might be a problem since population is currently decreasing. That would be fine if you offset it with increased immigration, but we all know how the current administration feels about that..

        • World population may be on downward slope regarding births. It's still going upward as far as absolute numbers are concerned.

          As far as the US is concerned - our population is exploding. At the current pace we'll be at about three quarters of a billion people at the turn of the century.

          We were at
          130 million in 1940 and
          200 million in 1970 and
          310 million in 2010
          Form 1970 to 2010 (40 years) we had a 50% increase in population.

          At that rate it will be at about 450 million in 2050 and 700 in 2090.
    • Re:Disruption (Score:5, Insightful)

      by sabri ( 584428 ) on Thursday July 13, 2017 @06:02PM (#54804125)

      Same as xerox copying machines moved previously employed secretaries (see the massive secretarial pools in older movies) to the unemployment lines.

      But employed massive amounts of people at Xerox, opened up an entire new market.

      How many people does Amazon employ? How many people does Amazon indirectly employ (think Ontrac, UPS, Fedex etc)?

      I'm sure that thanks to Google, a lot of Encyclopedia salesmen are out of a job too. Would you like to ban Google?

      • I'm sure that thanks to Google, a lot of Encyclopedia salesmen are out of a job too. Would you like to ban Google?

        Yes I would, but not for that (implied) reason.

      • Oh. I wasn't supporting the OP. I was pointing out to him that disruptions such as this have occurred numerous times.

        I am slightly concerned about the disruption coming from automated cars, trucks and warehouses.

        We have millions of taxi drivers, truck drivers, bus drivers, and stock clerks. These jobs will go the way of the horse shoe. Long term that's good. Short term. There may be issues.
    • Frankly, I think automated meeting scheduling killed admin staff. Can you imagine setting up a 10 person meeting in the 80s? Fuck.
      • by swb ( 14022 )

        I started work at the IT department of a large ad agency in 1993. When I started we had an ancient and rudimentary version of cc:Mail which nobody really used -- I found out by sending email to a coworker, who didn't read it for 3 days.

        We also had a large secretarial staff, probably 30-odd people for a company of around 400, and a big task for them was scheduling meetings and printing memos.

        By 98 or so, we had a full email/calendaring system installed and I'd say by about 2000 we only had 1/4 of the secret

  • by turkeydance ( 1266624 ) on Thursday July 13, 2017 @05:26PM (#54803845)
    then MS increased campaign contributions.
    • by Spy Handler ( 822350 ) on Thursday July 13, 2017 @05:42PM (#54803973) Homepage Journal

      MS didn't just "increase campaign contributions", that doesn't accurately describe how things went down.

      MS had *zero* lobbyists and made *zero* political contributions. Bill Gates was a naive computer nerd who thought corruption and shakedowns only happened in poor countries. Then when his company started making too much money in the 90's, suddenly it started getting all kinds of government trouble.

      Bill, being a quick learner, rectified the situation and now MS has an army of full time lobbyists in Washington and a whole department dedicated to disbursing large sums of money as "contributions". And yes, their government problems went away.

  • by Anonymous Coward

    Doug Kass is a fearmonger. One of those people who focuses on the one in a hundred times he is right, and ignores all the times he is just trying to cause panic. I'm not saying this couldnt happen, not in the slightest. But Doug Kass is far from a reliable source.

  • This story smells (Score:3, Insightful)

    by Anonymous Coward on Thursday July 13, 2017 @05:35PM (#54803917)

    If there are some early talks that aren't public knowledge, wouldn't shorting be insider trading.
    If there are and it is public, shouldn't we have a corroborating source?

    If there aren't talks, and he knows it, isn't that some sort of illegal market manipulation as well?
    If there aren't talks, but he thinks there is, then wouldn't anyone following his advice be the picture of foolishness?

    Something is off here.

    • Yes x 4

    • Re:This story smells (Score:5, Interesting)

      by Tailhook ( 98486 ) on Thursday July 13, 2017 @06:39PM (#54804401)

      Something is off here.

      If you're looking for some "too big" to get worked up about.... 2016: Amazon revenue: $136 billion. Walmart revenue: $486 billion.

      The latter has been wiping out competitors and distorting the wholesale and retail supply chain of the US for decades. Amazon has a looong way to go before they approach the damage of Walmart.

      There are a lot of things "off" here.

      Amazon has made a mistake. They disturbed the US professional class when they dared touch one of its refuges by grabbing Whole Foods. So yeah, sic the government ban hammer on them. Completely in character.

      • by rtb61 ( 674572 )

        Now you hit the nail right on it's head. Amazon has become threatening to Walmart the true destroyer of communities and Walmart's lobbyists are now out to get Amazon. Amazon is a logistics company with a retail arm and any logistics company can compete with them on the same basis. From the producers production lines to an Amazon warehouse to be picked and delivered to your home. Of course instant gratification does require click and mortar elements.

        Basically apart from a period of bullshit lobbyiest crap,

    • No, it's not insider trading. Liability for trading on material non-public information attaches only on violation of a duty to abstain or disclose, or from violation of SEC Rule 10b-5, which covers fraud. If he's lying to lower the stock price, that's a 10b-5 violation. If he was given the information by somebody who was violating a fiduciary duty *to* amazon, he could be liable, but since this is information about a government intervention that is extremely unlikely.

      (IANAL, but I am a law student and st
  • by JBMcB ( 73720 ) on Thursday July 13, 2017 @05:35PM (#54803921)

    "Hi there. Oh I'm just your friendly local congressman. I notice you haven't been doing a lot of lobbying lately. You know, campaign funding, that sort of thing. Say, that's a really nice business model you got going on there. Boy it looks really successful. I'm really happy for you. But, I'm worried about this legislation that's knocking around in congress that might affect it..."

    There's a This American Life episode where a congresswoman left, pretty much, that message on someone's answering machine. "I notice your in the construction business and I'm on the panel for construction spending so..."

  • "That's a nice business you got. Be a shame if anything happened to it."

    At least, that's what I'm hearing.

    • by imgod2u ( 812837 )

      I suspect it's a bit less sinister. The old saying of never attribute to malice what can be explained by stupidity.

      The "corporations are bad, up there in their corporate tower being all corporation-y" wing of the American leftists seem to be gaining momentum in much the same way the Tea-baggers did after Obama won in 2008.

      Expect a lot of screaming and crying about how people shouldn't make money and stuff...

      • I suspect it's a bit less sinister. The old saying of never attribute to malice what can be explained by stupidity.

        The "corporations are bad, up there in their corporate tower being all corporation-y" wing of the American leftists seem to be gaining momentum in much the same way the Tea-baggers did after Obama won in 2008.

        Expect a lot of screaming and crying about how people shouldn't make money and stuff...

        That old saying is retarded.

        1: That's just what a malicious actor would want you to think.

        2: If someone does some shit, why would you care about whether it was due to stupidity or maliciousness? The response shouldn't be more lenient if it was due to stupidity. That only enables stupidity AND malice. The stupid aren't punished and weeded out, and the malicious feign stupidity and aren't weeded out at the malicious actor rate. Instead, they get the stupid actor discount.

  • by fermion ( 181285 ) on Thursday July 13, 2017 @05:40PM (#54803963) Homepage Journal
    Whole foods has perhaps US$4 billion a year in sales. Amazon has been steadily growing and has perhaps US$130 billion a year in sales. Walmart also has US$130 a year in sale.

    On the other hand Aldi and Trader Joe's bring in about half that world wide. It seems to me that we still need to be concerned about Wal Mart and their domination. Amazon is about the only venture that is going provide any real competition to Wal Mart, with discounted Amazon Prime to low income families, and the promise of affordable fresh vegetables and fruit through the Amazon Fresh program. In my town a family making three trips a month on the bus pays for the fresh membership.

    I think the government may now be prioritizing east coast conservative corporate interests over the interests of voters, in the same way they prioritize legacy coal over the health interests of inner cities where the coal is burned.

    • I was wondering why Walmart wasn't targeted while they decimated small companies in the 80s/90s/00s.

      There is actually a bit of free market going on here as far as I can tell.

      Disclosure: I had two Amazon packages by my front door when I got home today... I can't get replacement side mirror glass for my wife's car from Walmart.

      Full Disclosure: I bought a crapton of soda and snacks (for kids' lunches) at Walmart over lunch today.

      Take my disclosures as you will...

  • by e r ( 2847683 ) on Thursday July 13, 2017 @05:46PM (#54803995)
    but how come nobody wants to trim it?
  • Since people like this seem to always lie I"m guessing he didn't short and just trying to make some quick money.

    It would be interesting to see who is really pushing this since politicians never do anything without someone pushing them to.

    I suspect that it's Walmart who can't seem to get any real traction and aren't able to counter the shift away from the giant stores filled with crap.

  • by JoeyRox ( 2711699 ) on Thursday July 13, 2017 @06:10PM (#54804181)
    Antitrust laws forbid monopolistic behavior. A very large corporation by itself does not represent monopolistic behavior.
  • Ever since attending the AWS conference, I have been wondering if the reason AMZN is not concerned about still hemorrhaging money and not making a profit after 20 years now is because the end game is becoming To Big To Fail.

    I think Bezos et. al. learned a valuable lesson from 2008 and applied it as part of their business strategy.
    • Using your profit to grow the business is the old fashioned cartoon version of capitalism we learned in grade school. It also has tax benefits since you don't have a profit to bother with hiding in Ireland as I imagine the textbooks explain to do now.
  • Simple solution: Amazon should just call itself a bank or an agri-business and the government will fund it getting bigger.

  • >"Is Amazon a productive change agent and force for the good of the consumer by virtue of a reduction in product prices? Or is Amazon's disruption of the general retail business a destroyer of jobs, moving previously productively employed workers into the unemployment line?"

    Neither and yet both and yet that isn't what matters. I love Amazon. Most of us do. But what I do not like is that there is no real/viable OTHER "Amazon". That makes Amazon a type of monopoly in their own playground. Monopolies a

    • One thing interesting with Amazon, is that while everybody is on there at least via third party, you don't necessarily have to buy through them. For specialty hobby items you can use it like a search engine and then search for the seller's eBay or regular ol' HTML store and buy more directly for cheaper.
  • Seriously, the smart move would be for bezo to create 3-5 VERTICAL companies from amazon. Give them all the same equipment, robotics, etc, and then let them compete against each other.
    With that, trump/GOP could do nothing, except get mad that Amazon 1-5 are slowly throttling companies like walmart, target, etc all who bought GOP politicians have been throttling America.
  • Me thinks that there are enough other targets to go after than Amazon if you're going by size alone.
    Wonder if Washington Post being a thorn in Trump's side has anything to do with this?

  • I expect this is really a plea for lobbying cash by whoever the supposed Dems are, just in time for the 2018 election season

  • I had to look up what Prime Day is - I thought it might be something like Pi Day, which would have been cool, in a way. Somewhere along the same off-topic, tangent, I'd like to suggest 2nd of August (or 8th of February, depending on whether you're American) as Perfect Day, since 28 is a perfect number. Sorry, slow moving day at work.

  • If the Trump administration seems to be a driving force behind the regulation it would be pretty easy to draw a link between that and the threats Trump made to punish Amazon for negative coverage from the Washington Post.

    That would seem to be good application of the 1st amendment, I wonder if Amazon would have a good shot at prevailing in a court case.

  • It didn't work for Google with the EU, but it's worth a try. Break up Amazon into different companies under a new parent company. They could call it Buy N Large.

  • I mean the guy posting this, not Amazon. He shorts a stock, then writes an article telling everyone they ought to sell that stock. He hopes some people will listen to him, in which case the price goes down, he immediately covers his short, and makes money. Nothing to do with Amazon really. It's a standard trick you can do with any stock. But only if you can get enough people to listen to you so it affects the stock price.

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