Trump's Scrutiny of Amazon Draws Concern From Many Corners

A Democratic senator and others told us they're wary of Donald Trump attacking Amazon. The latest salvo from the president came Thursday, when he ordered reassessment of the financial situation of the U.S. Postal Service, which Trump says loses money because of Amazon. Trump also attacked The Washington Post, owned by Amazon CEO Jeff Bezos, for its coverage of the administration.

Senate Judiciary Committee ranking member Patrick Leahy, D-Vt., wishes Trump would focus on his job and stop tweeting. It “makes us look silly to the rest of the world,” Leahy said. Sen. Bernie Sanders, I-Vt., shared Trump’s concerns about Amazon’s market power, telling us he's unsure how Trump's concerns will play out in the antitrust realm.

Treasury Secretary Steven Mnuchin will lead a task force for the USPS assessment, the White House announced. Trump repeatedly has blamed Amazon for costing USPS and taxpayers “many billions of dollars” (see 1804030036). The president’s Task Force on the U.S. Postal System will analyze how USPS has lost $65 billion since 2007 and how to improve performance. Trump’s executive order said the group is to evaluate “the expansion and pricing of the package delivery market and the USPS’s role in competitive markets.” The panel will analyze the “definition of the ‘universal service obligation’ in light of changes in technology, e-commerce, marketing practices, and customer needs,” said the order.

George Washington University assistant professor Leah Brooks said the task force’s depth of analysis will be limited because it's to report in 120 days. If the group is “truly interested” in USPS financial health, it’s difficult to imagine recommendations that drastically limit the postal service’s ability to engage in profitable activities like package delivery, she said. The White House’s proposal to reconsider USPS' universal service obligation, which requires the postal service to deliver to all U.S. households, could have implications for rural customers, who are effectively subsidized by urban areas, she said.

Ex-FTC Chairman William Kovacic said Trump’s comments won't matter because incoming FTC commissioners like Joe Simons and Christine Wilson understand reputations are on the line when bringing cases, and they won't be willing to bring a bad case based on presidential pressure. The agency could be hesitant to bring a case to avoid the appearance of Trump’s influence, said Kovacic, now a GWU law professor. “If people would bite their tongues and let you do your jobs, you have a bit more freedom,” Kovacic said. Cato Institute fellow Alan Reynolds said any action against Amazon would be a losing case against “success and bigness,” saying federal prosecutors “intimidate rather than go to court.”

Cato Institute fellow Ike Brannon said the executive order “has something to do” with Trump’s bias against Bezos. “I think the president wants to do something that forces [USPS] and Congress to fix this in some way,” said the ex-economist for the Department of Treasury, Office of Management and Budget, and House Commerce Committee. Brannon said the mail service isn't viable without some form of government support, citing pension problems, high labor costs and a business model that depends on a dwindling revenue stream.

Mozilla fellow Gigi Sohn said Sanders’ motivations differ from Trump’s in that the senator is concerned with the increasing power of platforms, while Trump has “political issues” with the Post. Sohn said it’s unfortunate that “good policy” could potentially clash with “bad politics.” If "the reason to investigate Amazon is just because Donald Trump is annoyed at the fact that The Washington Post is doing excellent journalism, then that’s not a good enough reason,” she said.

Amazon’s impact on brick and mortar retailers begs antitrust questions about predatory pricing and Amazon’s role as gatekeeper to nearly half of online retail sales, said Consumer Watchdog President Jamie Court. Of the “Silicon Valley cartel” -- also Apple, Facebook, Google and Microsoft -- Amazon is at the highest risk of antitrust action because there's tangible evidence of its “information monopoly,” he said.

There are constitutional issues with the president’s statements and their potential for influencing future antitrust cases, said TechFreedom President Berin Szoka. “Whether Trump means any of this or not is irrelevant for that purpose.” He said antitrust cases ultimately concern expert witnesses and economic models. If a judge or jury suspects an ulterior motive for some future DOJ action, there will be more skepticism about its case, he added. Trump doesn’t care about appearances, but “that doesn’t mean that the courts won’t,” Szoka said. Amazon and the White House didn't comment.