In the beginning of April, President Donald Trump tweeted a message to the American people about Amazon, and it created a disturbance, but this wasn’t even the most important news about the company. A former senior Walmart executive also discussed Amazon, and he suggested that federal antitrust laws require that Amazon be broken up.
Walmart’s ex-CEO Bill Simon stated that Amazon is not in the retail business, but it is the entity that is causing several retailers to close their doors. He believes that Amazon is not competition for these retailers, but its actions are predatory, and they aren’t fair.
Jeff Yastine isn’t surprised that a rival would criticize the way that Amazon does business, but this is different because the executive is making his views known to the public. In fact, this is the first time that Mr. Yastine has heard a rival executive state views such as these outside of a private meeting with other business people, and he thinks that it is a bad omen for Amazon.
[WATCH]https://t.co/dXF30mXRkV and antitrust regulation?https://t.co/aI8v7PhcOR#Amazon #AMZN #JeffBezos #Taxes #PresidentTrump #Trump #Trading #Investing #Stocks #StockMarket #TotalWealthInsider #BanyanHillPublishing
— Jeff Yastine (@JeffYastineGuru) April 3, 2018
Jeff Yastine is a financial journalist who anchored “PBS Nightly Business Report” from 1994 to 2010. In the process, he has been in the enviable position of learning the investing secrets of some of the most influential and successful business people in the world. Some of these include Sir Richard Branson, Michael Dell, Warren Buffet and many others. As a financial reporter, he has introduced his audience to small-cap growth stocks that ended up being highly successful.
Mr. Yastine was on the air in 2007 before the real estate crisis took hold of the country, and he had the opportunity to give his viewers advanced warning as to what was to come. He also informed his viewers that the dot-com bubble was going to burst, and he was available to report on major national disasters, such as Hurricane Katrina and the Deepwater Horizon oil spill. Also in 2007, he was honored with the Business Emmy Award for his reporting on the public infrastructure crisis in America.
The above-cited comments are demonstrating to the world that people are very frustrated with competing with Amazon. It is inevitable that either the current president or a future president will accuse Amazon of violating antitrust laws.
Jeff Yastine asks why this would be the case. He has stated that “The stirring of antitrust activity goes hand in hand with overheated markets that only amplify the power of a few companies that become too big, too dominant…in a word, too powerful.”
In 2017, 26 major retailers filed for bankruptcy, and they were chains that had liabilities worth $50 million. At the beginning of the first quarter, Bon-Ton, Claire’s and other stores have also gone out of business.
Just in the first quarter this year, we’ve seen five more decent-sized retailers, including Claire’s and Bon-Ton Stores, go under.https://t.co/0yZtPkXNnu#Amazon #AMZN #JeffBezos #Trump #Trading #Investing #Stocks #StockMarket #TotalWealthInsider #BanyanHillPublishing pic.twitter.com/N7EEqatTjP
— Jeff Yastine (@JeffYastineGuru) April 3, 2018
Were these companies run badly? Were they not being led in the best manner? Jeff Yastine thinks so, but every “all inventory must be liquidated” and “going out of business” sign that he sees reminds him of how Amazon is changing the retail atmosphere.
These signs also point out the fact that Amazon has a platform that other retailers must use to list their merchandise to be competitive. According to some people, this gives Amazon an unfair advantage because it is also listing its products on this platform, but Amazon’s prices are cheaper than the competition’s prices.
As a matter of fact, a Yale legal scholar by the name of Lina M. Khan stated that the platform Amazon uses is likely to be targeted by antitrust regulators. In a publication that she wrote for the Yale Law Review, Ms. Khan stated that the current antitrust laws cannot fully address the risk that Amazon poses to its competitors. According to Ms. Khan, it is not possible to know how Amazon’s competition will be damaged by its presence by looking at output and prices alone. Predatory pricing is not seen as a threat in the current climate and does not appear to be particularly anticompetitive. In addition to that, antitrust laws do not adequately address the special circumstances that an online platform presents.
According to Ms. Khan, antitrust law tends to focus on the consumer’s immediate interests. Therefore, regulators believe that low prices mean that there is sufficient competition. She has suggested that Jeff Bezos examined the antitrust laws so that he could find ways to navigate around them.
Rather than focus on consumer prices alone, Ms. Khan believes that we need to take an honest look at how Amazon monopolizes the marketplace by analyzing “the underlying structure and dynamics of markets” and “the competitive process itself.”
Other retailers are forced to use the Amazon marketplace, so Amazon is in a position to collect a tremendous amount of data on these retailers, and this gives Amazon a competitive advantage according to Ms. Khan. The question she is asking about this current situation is whether or not Amazon is exploiting that advantage to the detriment of its competition.
It seems that Amazon’s troubles have already begun. An antitrust watchdog group in Japan visited Amazon’s offices on March 15. This occurred after Amazon was suspected of violating the antitrust law. Apparently, the company’s suppliers were being charged with paying for the discounts that Amazon offers its customers. In the inspection, the Fair Trade Commission discovered that these payments have been collected since 2017. Amazon Japan stated that it would cooperate with the antitrust agency’s inspection.
It is believed that suppliers have been paying what Amazon has asked of them because they do not want to lose the ability to post their products on Amazon’s worldwide platform. The antitrust law in Japan prevents a company from using its stronger position to benefit from other retailers by charging them money. Other retailers are required to pay Amazon a fee to list their products on Amazon’s website.
Jeff Yastine believes that headlines like the ones that have appeared in Japanese newspapers are about to make their way to newspapers in the United States.
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