The Twitter attacks that President Donald Trump has waged against online retail giant Amazon have caused its stock price to fall. This is unprecedented since in the past presidents have rarely singled out specific companies. According to associates Trump’s attacks on Amazon are believed to be resulting from the fact that the founder and chief executive officer of the company happens to own The Washington Post as an individual. The president perceives the coverage he has received from the Post to be ‘biased’.
While the president doesn’t have any powers to take action on his own, Amazon could face regulatory scrutiny. Some of the areas Amazon is likely to find itself fighting with regulators is in regards to unfair competition. In this scenario Amazon would not be subjected to punishment on the grounds of price gouging but rather it would be punished for driving rivals out of business.
Additionally the Trump administration could ensure antitrust laws are enforced by filing a lawsuit against Amazon over practices of prioritizing its own services and products on its platform over those of others.
The Trump administration could also make things difficult for Amazon to operate with regards to acquisitions. Fully aware that the administration’s eyes are trained on it, the online retail giant would act more cautiously when making acquisitions in the future. Earlier in the year Amazon purchased Ring, a maker of smart doorbells, at a price of $1 billion. In 2017 Amazon spent $13.7 billion acquiring Whole Foods Market.
However experts have cautioned that antitrust cases are not easily won unless the evidence was sufficient and insurmountable.
No strong case
“There’s no question being in the spotlight makes companies more cautious. But bringing a case against Amazon won’t be easy. Most antitrust professionals, when pushed to do something that would not be sustainable, say ‘check, please’ and head for the exit,” George Washington University’s global competition law professor and Competition Law Center director, William Kovacic, said.
Trump’s best chance of scoring a win against Amazon lies with the United States Postal Service. The current five-year deal that Amazon has with the U.S. Postal Service will end this year in October and negotiations for a new contract are expected to start mid this month. According to a research report by Citigroup, a new deal could see Amazon paying 41% more for the average package. Thus for Amazon a renegotiated contract with the U.S. Postal Service is the one thing that could be most disruptive to its business model.