TRUMP WATCH: A SWIPE AT AMAZON, BUT WHY?

Everybody is getting worked up over Facebook and Cambridge Analytica, but Trump has a grudge against another tech giant: Amazon. On March 29, he lashed out:

I have stated my concerns with Amazon long before the Election. 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!

— Donald J. Trump (@realDonaldTrump) March 29, 2018

So why this bizarre obsession with Amazon? Because Bezos, the founder of Amazon, owns the Washington Post, one of the papers Trump fears and hates the most? Maybe.

But there’s another good reason why: Clearly, Trump has no intention to wade into the on-going Facebook-Analytica scandal. Hot stuff, and it could burn him.

The fact that the Trump campaign used Analytica’s “psychographs” to sway election results is deeply embarrassing, and it doesn’t help that to do so it used private data stolen from some 87 million American Facebook users. Moreover, in early March Cambridge Analytica reportedly still had not deleted all the user data as promised.

And, cherry on the cake, Analytica was co-founded by Steve Bannon and is financially backed by Robert Mercer, the right-wing, gun-toting billionaire (he has secretly volunteered for police work that allows him to carry a gun everywhere he goes). It doesn’t help either that Analytica played a key role in swaying voters on Brexit. [Update: Cambridge Analytica closed down at the end of March after its CEO Alexander Nix was suspended for bragging on British TV Channel 4 News that he had helped Trump win the election; but the team and its work is continued by a mysterious newly created firm called Emerdata. ]

Obviously, it is safer to attack Amazon and perhaps, in doing so, deflect attention from Facebook and his own election campaign.

Trump is Only Partly Right About Amazon

As usual, Trump’s swipe against Amazon is based on a mix of right and wrong arguments:

It is true that, as an out-of-state retailer, Amazon pays “little or no taxes to state and local governments”. It follows that “many thousands of retailers” are threatened, it’s a price war that eats at their profit margin – they’re making less money than before and the reasons for this are many. Online competition from the likes of Amazon is only part of the story. But that does not mean that they are all “out of business” or about to collapse. That’s one step too far.

In fact, in the video, Trump comes close to admitting that this is a different issue that he implies he will deal with “later”. But let’s focus on his core argument: that the US Post Office “subsidizes” Amazon, in the sense that it is used, as he put it, “as their Delivery Boy (causing tremendous loss to the U.S.)”; that it “loses $1.50 on average” for each Amazon package it delivers. This statistic sounds good but it is unfounded.

The point is this: Federal regulators have found the contract with Amazon to be profitable. The Postal Service itself is happy to oblige Amazon because it is making a lot of money out of the deal – it has even started Sunday delivery in certain areas to satisfy Amazon clients. It would never do that if it were a money-losing proposition. USPS CEO Patrick R. Donahue recently said in a press release:

“As online shopping continues to increase, the Postal Service is very happy to offer shippers like Amazon the option of having packages delivered on Sunday.”

However there is much truth in the argument that Amazon is not paying the taxes it should, either in the US or Europe. They have started paying more, but it’s still not enough – or fair to consumers who are also taxpayers. And not just Amazon, but Google and Facebook too. The European authorities are after them at last – following an outcry from European consumers. Expect American tech giants to soon start paying their dues in Europe. As the BBC put it (March 2018), technology giants face European “digital tax” blow.

Americans will have to wait: What is needed is concrete actions, not tweets, however presidential they may be.