Donald Trump lashes Amazon conduct

Donald Trump has slammed Amazon.com over the company’s business practices and its impact on the economy.

Donald Trump has slammed Amazon.com over the company’s business practices and its impact on the economy, adding to investors’ growing concerns about ­potential new regulations for the technology giant.

In a Thursday morning tweet, the President took aim at Amazon over the amount of taxes it pays, its use of the US Postal Service and the company’s impact on ­traditional retailers. It was the ­latest in a sustained line of attack the President has levied against the online retailer since before his election.

“I have stated my concerns with Amazon long before the Election,” Mr Trump wrote on Twitter. “Unlike others, they pay little or no taxes to state & local governments, use our Postal ­System as their Delivery Boy (causing tremendous loss to the US), and are putting many thousands of retailers out of business!”

Amazon did not comment on the President’s tweet.

Amazon has grown rapidly beyond its roots as an online bookseller, transforming into a dominant provider of cloud services, creating its own line of tablets and voice-activated speakers and extending its reach into traditional bricks-and-mortar retail by last year acquiring the specialty grocer Whole Foods Market.

But as Amazon has grown, so have investors’ concerns about potential regulation targeting the company. Those fears crystallised this week as Amazon found itself once again in Mr Trump’s crosshairs.

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The missive on Thursday, while repeating previous tweets regarding Amazon, comes amid a fierce backlash against Facebook and other big internet companies that has helped fuel a broader ­discussion about added regulation for the tech industry.

The President’s tweet followed a report by Axios on Wednesday that said the President has been looking at more strictly regulating Amazon, including through ­competition law, causing the ­company to lose billions in market cap as investors worried it might become a target.

Amazon’s stock closed up 1.1 per cent, at $US1447.34 yesterday after finishing down 4.4 per cent the day before. At one point on Wednesday, the stock dropped more than 7 per cent.

The US Justice Department has no active competition investigations of Amazon, sources say.

Mr Trump’s tweet on Thursday continues a well-established pattern of the President using the platform to blast Amazon and its chief executive Jeff Bezos, who also owns The Washington Post.

In December, Mr Trump ­criticised the company’s use of the US Postal Service for delivery, saying Amazon should pay more. In August, he said, the company was costing jobs as it damaged ­taxpaying retailers, as well as cities and states.

“Is Fake News Washington Post being used as a lobbyist ­weapon against congress to keep Politicians from looking into Amazon no-tax monopoly?” Mr Trump asked in a July tweet.

Even before his election, Mr Trump and Mr Bezos exchanged barbs. Mr Trump accused Amazon’s CEO of buying the newspaper to influence politics. “If I become president, oh do they have problems,” Mr Trump said in a speech on the campaign trail.

The barrage of criticism ­appears to have had no impact on regulation of the company.

Amazon’s collection of state sales taxes has long been a point of contention for both traditional ­retailers and state and local governments. Amazon for years didn’t collect sales taxes in states where it didn’t have a physical presence through a warehouse or office as permitted under federal law, ­creating the perception of lower-priced merchandise that helped fuel its growth.

But the online retail giant ­shifted its strategy, building more warehouses closer to consumers. That has triggered the need for it to collect taxes due to its physical presence.

Last year Amazon said it would start collecting tax on its own ­inventory in all 45 states that have a sales tax, and it also struck some voluntary collection agreements for municipal taxes.

Still, analysts estimate a majority of sales on Amazon’s site stem from smaller merchants. Many of those small businesses don’t ­collect sales taxes outside the states where they are based, ­despite being part of Amazon’s logistics network, which can allow their merchandise to be shipped to warehouses across the US.

Amazon in January started ­collecting sales taxes for sellers in Washington due to a new state law, and will do so next month in Pennsylvania. It has also started turning over seller data in some cases to state tax officials.

The Supreme Court will hear arguments in April on a case from South Dakota challenging the standard of a physical presence as the way to determine whether to collect sales taxes. Bricks-and-mortar retailers and state governments have been urging the court to overturn its 1992 precedent and a court ruling in South Dakota’s favour would up-end the online retail landscape.

The President also took aim at Amazon’s use of the US Postal Service for deliveries. Amazon is one of its largest customers, ­contracting to deliver packages from the post office to customers’ doorsteps. The postal service is mandated by congress to charge enough to cover its costs, and must typically seek regulatory approval on pricing changes. But some ­critics have said the postal service has underpriced this type of delivery option, essentially subsidising its last-mile deliveries because the agency already must deliver to US addresses six days a week.

The President also blamed Amazon for putting thousands of retailers out of business. Many ­retail stores have closed in recent years but it isn’t known how large a role Amazon may have played in the closures.

Some people in the business community have adopted a theory that competition law has failed its historical purpose when it comes to Amazon, focusing too much on pricing and not enough on ­concerns that integrated businesses can be anticompetitive.

A White House spokeswoman yesterday said, “the President has expressed his concerns with ­Amazon. We have no actions at this time.”

Amazon’s retail chief, Jeff Wilke, said in an interview last year that the company had grown horizontally and still has a tiny fraction of the market in most of the segments in which it does business. Professors on competition say that this, combined with Amazon’s tendency to lower prices to benefit consumers, helps protect the company under current law.

Still, Amazon spent $US13 million on federal lobbying last year, up from $US2.5m in 2012. Its team of 95 internal and external lobbyists includes former Senate majority leader Trent Lott and Brian Ballard, a Republican fundraiser who is close to Mr Trump.

Amazon has lobbied on tax ­issues including the legislation signed by Mr Trump at the end of the year, data-privacy issues, ­cybersecurity, government procurement and other matters, ­according to disclosure forms it has filed.

The company has also made a push to highlight its positive impact on the US economy, touting the small businesses that sell on its site as well as its job creation. Last year, the company said it was ­creating more than 130,000 full- and part-time jobs through the middle of this year.

Amazon also launched a search for a second headquarters last year, promising it could bring as many as 50,000 jobs and more than $US5 billion in investment to the winning city.