Amazon is gearing up to defend itself against a mushrooming battle over the company’s alleged anticompetitive business practices, in arenas spanning US Congress, federal agencies and state government.

The commerce giant is expanding its legal team, hiring former federal prosecutors and regulators to fill roles that include defending the company against allegations that it unfairly dominates markets. The company has tweaked its public messaging to downplay its role as the world’s largest online retailer. It has also tried to boost its image in Washington, D.C., spending more on federal lobbying in 2020 than ever before.

Together, those moves can be read as Amazon erecting a shield against stepped-up antitrust scrutiny, said University of Washington tech historian Margaret O’Mara.

Amazon is “deploying their considerable resources and readying for what’s clearly a very different relationship with Washington (D.C.) than tech has usually enjoyed”, O'Mara said.

Amazon has objected to criticisms that it has grown too large. The company operates “a diverse range of businesses” in an “extraordinarily competitive” global retail marketplace, company spokesperson Dan Perlet said in a statement.

US President Joe Biden has taken a more strident tone on issues of corporate power than recent Democratic presidents. He issued a statement many interpreted as backing the union drive of Amazon workers in Bessemer, Alabama. And he has installed prominent Big Tech critics in key positions within federal agencies, signalling the administration could attempt to rein in Amazon’s economic sway.

The company is facing simultaneous challenges in both chambers of Congress, as well as from US states. Legislation that would reform some aspects of antitrust enforcement is working its way through the Senate; House antitrust subcommittee members are expected to introduce their own bills in coming months.

Behind the scenes, Amazon has filled its ranks with at least 10 former federal antitrust attorneys and economists, most of whom previously worked in federal government for at least a decade, according to a review of LinkedIn profiles and previous reporting from nonprofit watchdog group The Revolving Door Project.

Six have been with the company since at least 2019, including Nate Sutton, who joined Amazon's regulatory law team in 2016 after 10 years as a trial attorney in the Department of Justice (DOJ) antitrust division. Lawmakers talked briefly of launching an investigation into Sutton last year, after his congressional testimony about Amazon's business practices appeared to contradict findings in last year's House antitrust committee report detailing what it said were anticompetitive business practices by Amazon, Google, Apple and Facebook.

The pace of Amazon's hires accelerated as federal scrutiny of Amazon's business practices intensified: The company made five high-profile hires with a combined 44 years of experience at the DOJ and Federal Trade Commission (FTC) in a four-month period last year.

Amazon is currently looking to hire more Seattle- and Virginia-based attorneys to “advise the company on a wide variety of cutting edge legal and business risk management issues”, including in the realm of antitrust, according to job listings posted March 19 and Jan 21. Amazon’s desired “basic qualifications” for the roles include former government service.

The company also has two open positions for economists on the team handling antimonopoly issues. Amazon is “looking for an economist to help develop economic models and evidence to support legal and regulatory matters across all lines of our business”, one listing reads. Preferred qualifications include experience “working in or closely with a regulatory agency” and “in complex business litigation, in particular on antitrust matters”.

Amazon's teams dealing with antitrust matters have grown more slowly than the company as a whole, Perlet said. The company added nearly 450,000 employees globally last year, mostly at its warehouses, as the pandemic juiced demand for online shopping.

In addition to staffing up internally, Amazon has enlisted outside help to advise it on antitrust matters.

Attorneys from Covington & Burling, a firm whose antitrust practice boasts a deep bench of former FTC and DOJ antitrust employees, represented Jeff Bezos during his testimony to the House antitrust committee last summer. Amazon also tapped prominent antitrust expert and Big Tech critic Fiona Scott Morton to advise the company in the lead-up to that hearing.

In 2020, Amazon spent US$18.7mil courting federal officials, more than any other company except Facebook, and more than Amazon has ever spent on lobbying in a single year.

As the company has expanded, so has its lobbying footprint. Amazon lobbied federal officials last year on an array of topics, including Covid-19, data privacy, drones and veteran employment.

Amazon also spent significant resources to lobby members of Congress, the DOJ, the FTC and former President Trump on competition-related issues, lobbying disclosures show. Starting in summer 2019, it enlisted three firms - Ballard Partners, Subject Matter and Akin Gump - to lobby on issues including competition policy. The company has deployed many of its own employees to do the same since at least 2017. And since 2016, Amazon has paid US$120,000 a year to former DOJ antitrust litigator Seth Bloom to lobby the administration solely on antitrust issues.

Since the release of the House antitrust report last fall, Amazon has stressed in communications with news media that it occupies a relatively small portion of the overall retail market, including physical stores, even though it has become the dominant e-commerce retailer. It has also sought to portray itself as an enabler of small business. For the first time last year, Amazon did not report its own holiday season earnings. Instead, it reported sales of third-party vendors on its Marketplace platform.

Amazon leaders have also played up their ties to the Biden administration and resonance on policy issues, including support for a federal US$15 minimum wage. Jay Carney, Amazon’s senior vice president for policy, is a former Obama and Biden aide; his Twitter profile features a photo with Biden’s arm draped around Carney’s neck.

Despite its efforts to ingratiate itself in Washington, Amazon is finding its current reception there markedly more cool than in the Obama era.

Recent Biden appointees are sceptical of large technology companies’ power. Lina Khan, who penned an influential 2017 treatise proposing an overhaul of antitrust law to give government more power over Amazon's business activities, is a nominee to sit on the FTC, enforcing federal antitrust laws. Tim Wu, a Columbia University law professor known for criticising the power of huge conglomerates like Amazon as yielding “gross inequality and material suffering”, has been appointed a presidential adviser on technology and competition policy.

In the Senate, Amy Klobuchar, D-Minn., has introduced sweeping antitrust legislation that, among other reforms, would make it harder for dominant companies to win merger approval. Statehouses have passed new laws in recent months to limit large technology companies’ reach, and state attorneys general are investigating antimonopoly and price-fixing claims against Amazon.

The House antitrust subcommittee, meanwhile, is mulling changes that could increase the enforcement power of antitrust agencies.

Democrats and Republicans largely agree that firms like Amazon have amassed too much market power, said Rep. Pramila Jayapal, D-Seattle, who last month was selected as the subcommittee's vice chair.

“Amazon's lines of business are giving [the company] a competitive advantage, allowing them to buy, acquire and kill competition,” Jayapal said in an interview.

Media reports and the subcommittee's findings have documented that Amazon uses data from third-party sellers on its Marketplace platform to develop its own product lines, undercutting vendors reliant on Amazon’s website and logistics services. Amazon has denied claims it uses individual vendors’ Marketplace sales data, but the company does examine aggregate data to inform the creation of its own brands.

Lawmakers are “looking at ways we can ensure that companies like Amazon don't get to use competitor data”, Jayapal said. That could mean new legislation or rule making prohibiting companies such as Amazon from competing in the same markets as clients - in this case, selling goods on Amazon.com - boosting their own products in search results, or excluding vendors from preferential deals on shipping and advertising.

Also on the table are proposals to prevent big tech firms from using dominance in one sector to compete in related sectors, which could hinder Amazon from selling products marketed under its more than 45 private-label brands, whether on Amazon.com or another site.

Those more sweeping recommendations are unlikely to be enacted, said Jack Kirkwood, a professor of antitrust law at Seattle University.

"Breakups of big firms rarely happen," he said. "It would cause consumer outrage if you can't get Amazon batteries, or whatever."

But there is bipartisan support for more incremental measures to increase the funding and reach of antimonopoly enforcement agencies like the FTC, which launched an investigation into Amazon's relationship with the third-party vendors on its platform in 2019.

"Tech titans have used their dominant positions to hike fees, misappropriate third-party data, steal Intellectual Property, and erect barriers to entry with the intent of keeping themselves in a position of power for decades to come," wrote Rep. Ken Buck, R-Colo., the ranking member of the House antitrust committee, in the minority report on last year's tech hearings. "Antitrust enforcement agencies need additional resources and tools to provide proper oversight."

"Antitrust is clearly having a moment," Bloom, the former DOJ antitrust litigator who has worked for Amazon, said in a recent videocast. "We have Republicans as condemnatory, if not more, as Democrats." Though many Republicans' interest in antitrust reform centers on hemming in what they say is Big Tech's censorship of conservative voices, "whatever their motivation, that makes them advocates of strong antitrust law," he said.

 - TNS