President Donald Trump on Thursday renewed attacks on the e-commerce giant Amazon, suggesting the company shirks its tax-paying responsibilities and also doesn’t adequately compensate the U.S. Postal Service for delivery costs.
In a series of tweets Thursday morning, Trump also took Amazon to task over the effect it has had on the retail industry, particularly brick and mortar-based companies that have struggled to match the lower pricing and home delivery speed options Amazon provides its customers. Trump had made similar accusations about Amazon at various times in his first year in office.
The critiques of Amazon’s collections of state and local taxes have been around for years, with competitors and governments complaining that the retailer gained an unfair advantage by not assessing taxes on products. While Amazon has started paying state taxes on products fulfilled from distribution centers located in those states, the criticisms remain that it is not paying enough at the local level.
The New York Times reported that Amazon paid $412 million in 2016.
As to complaints about USPS getting short-shrift from Amazon, its package delivery arm has been profitable and growing relative to its other divisions. But USPS does offer significant volume-oriented discounts to Amazon, as it does to many large shippers. A Vox investigation into the issue in December found that Amazon's ability to provide "the infrastructure and resources to do what the Postal Service needs, will probably get a more favorable deal."
Trump’s criticism of Amazon is colored by the fact that he has engaged in a high-profile war of words with Amazon founder Jeff Bezos. Pundits suggest that animosity stems from Bezos’ ownership of the Washington Post, a newspaper whose coverage of Trump has been highly critical.
But Trump is not alone in highlighting the rise of Amazon as a source of concern for the business world at large. Retailers of all sizes have been forced to contend with Amazon’s business model and innovation prowess, suggesting that the company has not played by the same rules as they do.
Some of that handwringing is due to patience shown by Amazon’s investors, who stomached losses for years as the company grew, and some is due to loopholes they believe Amazon has exploited as governments wrestle with how to properly regulate e-commerce business.
More broadly, the discussion has now turned to anti-trust concerns, and whether Amazon has too big a share of the pie in the various sectors in which it sells. The company has nowhere near a monopoly on e-commerce sales, but it is taking a high proportion of the growth in e-commerce sales. It has a much large proportion of market share in other divisions, like its Amazon Web Services (AWS) business.
Trump’s critiques Thursday seem to echo those concern about the size and clout of Amazon across a range of industries. The company has recently make public splashes in the grocery, healthcare, home delivery, and logistics industries, among others.
But the president’s criticism likely to be seen as having as much to do with his feud with Bezos as it is a move to temper Amazon’s market share in the e-commerce space.