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In building his Amazon empire from scratch, Jeff Bezos, the soon-to-be former chief executive officer, deserves to rank alongside other business titans, such as John D. Rockefeller and Bill Gates.
Like Rockefeller’s Standard Oil and Gates’s Microsoft MSFT, +1.46%, companies which changed the U.S. economy in huge ways—while creating fabulous wealth for themselves and their shareholders—Bezos’s Amazon AMZN, -2.00% forever altered the way we shop, read, consume and more.
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Breaking up
But like Rockefeller and Gates, he also ran afoul of the U.S. government. Citing monopolistic concerns, the government broke up Standard Oil in the early 20th century, sought to break up Microsoft in the early 21st, and now talks about breaking up Amazon, along with other tech giants like Apple AAPL, -0.78%, Facebook FB, -0.16% and Alphabet GOOGL, +7.28%, the parent company of Google.
Being an alleged monopoly is but one issue. There are also growing concerns about privacy, and the huge amount of data that Amazon vacuums up each day from its customers, suppliers and rivals.
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These are about to become Andy Jassy’s problems. The incoming CEO, whose cloud-computing division—Amazon Web Services—is the company’s real profit engine, will now have to fend off regulators, mostly Democrats, who are displeased with what some call Amazon’s monopolistic business practices, and suggest that perhaps it should be broken up.
Must be held to account
One of those regulators is Washington Democratic Congresswoman Pramila Jayapal, whose Seattle district includes Amazon’s headquarters.
Jayapal—just elected to her third term in Congress with 83% of the vote—probably represents more Amazon employees than anyone else, and says in a statement that the retail giant must be “held to account for unacceptable treatment of workers including delivery drivers and warehouse employees; decisions to cut hazard pay and paid sick leave during a raging pandemic even as the top management and wealthiest shareholders get richer.”
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Even more worrisome to Amazon than that salvo is the fact that Jayapal just happens to sit on the antitrust subcommittee of the House Judiciary Committee. She says Amazon (and other “dominant tech platforms”) engages in “anticompetitive behavior and monopolistic practices,” that should be reined in.
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Amazon has thrown money at these problems, dropping $18.7 million on an army of 118 lobbyists in 2020 alone, according to public records.
But it seems unlikely that this will be enough to fend off lawmakers, who think Amazon and other tech giants have gotten too big and are stifling competition.
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Rare agreement
What’s interesting—and problematic for companies such as Amazon—is that this is actually a rare issue on which you can find agreement among Democrats and Republicans, albeit for different reasons.
The beef that Republicans have with big tech largely concerns alleged “muzzling” of conservative voices. In Amazon’s case, its recent move to stop providing cloud services to Parler—a conservative-oriented social network—has raised hackles in conservative circles, while Apple removed it from its App Store. Both Apple and Amazon said Parler hasn’t done enough to address threats of violence from its users. The moves were announced days after the Jan. 6 attack on the U.S. Capitol.
Democrats find themselves in a more contradictory position. They’re supportive of big tech’s moves against alleged online threats, but have a beef with the above-mentioned anticompetitive practices, privacy and data issues.
Timing is everything
What’s interesting here is the timing of Bezos’s departure. He’s stepping aside just as all these issues are coming to a head. On Nov, 5, 1999, a federal judge, Thomas Penfield Jackson, declared that Microsoft was a monopoly that used its vast power to crush would-be-rivals. On Jan. 13, 2000—just 61 days later, Gates said he was stepping down as CEO, to be replaced by Steve Ballmer. Even Rockefeller retired from day-to-day business operations at Standard Oil in the mid-1890s, not too long after Congress passed the Sherman Antitrust Act, and after the Ohio Supreme Court dissolved the Standard Oil Trust (the company would not be fully broken up until 1911).
Perhaps the timing of Rockefeller and Gates’s departures then were coincidences, and perhaps Bezos deciding to leave later this year is too.
But it seems to me that the real fun in being a wildly successful entrepreneur is the chase: Starting something from scratch, working your rear end off, and seeing your idea soar—and turning into buckets of money. It certainly isn’t dealing for years on end with lawyers and often clueless politicians who think you’ve gotten too big for your britches and want to take you down a notch.
So perhaps Bezos, just 57 and with plenty of things on his plate, like Blue Origin, a spaceflight company, is getting out when the getting is good. A monopoly? An abuser of data and trampler on the privacy of others? A silencer of conservative voices?
These are subjective matters which will play out for months and years to come. Amazon’s market cap, as of Wednesday’s close, was $1.65 trillion. He’s leaving on top.
