President Trump slammed Amazon on TwitterThursday morning, a day after the stock slid following reports that the President is “obsessed” with the company and looking for ways reign in the e-commerce giant.
“I have stated my concerns with Amazon long before the Election,” he tweeted. “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 U.S.), and are putting many thousands of retailers out of business!”
The stock is down close to 6% since Wednesday’s open, but investors fleeing the stock are not thinking clearly about what the president could unilaterally do to dampen Amazon profits. Though President Trump has proven to be a formidable political force, able to change the opinions of tens of millions of Republicans on issues ranging from Russia to free trade, polls show that Americans approval of Amazon remains high, regardless of their political party.
The difference between Americans love of Amazon and weakening affinity for companies like Facebook and Google isn’t difficult to understand. Amazon doesn’t subject its customers to nearly the level of privacy risk as other Silicon Valley firms do, and the services it provides are more central to lives of its customers. If Twitter or Google were to disappear, its users could find replacement services with very little disruption to their lives. If Amazon were to disappear, no company could quickly step in to provide the same convenience and savings.
That Amazon saves its customers so much money is the number one reason why investors should write off the idea that either the FTC or the Department of Justice will come after it over antitrust concerns. The Trump DOJ has been more aggressive on antitrust issues that previous Republican administrations — as evidenced by the ongoing litigation over the proposed AT&T-Time Warner merger. But even in that case, the DOJ is not straying from the doctrine that a company must be harming consumers through higher prices to be in violation of antitrust law.
To move antitrust law and jurisprudence from this definition of consumer harm would be a years, maybe decades-long project that would require filling Justice’s antitrust division of with the right people who are willing to rewrite oversight regulations, and better yet, convincing Congress to amend antitrust law to direct regulators to look at other factors beyond higher prices. There’s no evidence that the president has the patience and the will for such root-and-branch reform.
The president has gotten much criticism for the factual errors in his tweets. After all, Amazon now collects sales tax for items sold from its own inventory (though does not in most cases for sales from third party sellers, which account for roughly half the sales on the platform). The implication that somehow Amazon is taking advantage of the Postal Service has also come under fire, given that the rise of e-commerce delivery has been a financial godsend to the USPS.
But a careful reading of the tweet says that Amazon isn’t hurting the Post Office, but merely taking advantage of the vast public subsidies provided by the American people to the Post Office. Amazon’s success has been in part built on a such canny gaming of the idiosyncrasies of federal, state, and local government programs and regulations. One reason it chose Washington State for its headquarters in the 1990s was that it figured only a small fraction of its sales would go to Washington, and it could therefore offer lower prices shielded from larger states’ sales tax. Amazon competitors like mom and pop retailers never benefit from the same public beneficence, and such an uneven playing field is difficult to defend.
But Jeff Bezos single-minded focus on his customers will benefit him beyond his battles with other retailers. It has also won his company the admiration of American voters, and nothing the president has tweeted has been able to change it. President Trump has had some successes this year. He has even shown the ability to change the minds of Republican voters and lawmakers on issues like free trade. But the benefits of Amazon are much more tangential to average Americans than free trade agreements. And Trump’s overall lack of interest in the hard and boring work of bureaucratic reform means that Amazon and its shareholders should shrug off the president’s scorn.
Christopher Matthews is a writer who splits his time between New York City and Accra, Ghana, with an interest in the intersection of markets, the economy, and public policy. He previously held staff positions at Axios, Fortune Magazine, and Time Magazine, and has been published in Forbes and Debtwire.