Trump Hits Amazon Again, Raising Possibility of Antitrust Case

Amazon CEO Jeff Bezos tours the facility at the grand opening of the Amazon Spheres rainforest-inspired offices in Seattle, Washington on January 29, 2018
AFP

President Donald Trump took aim at Amazon Monday morning, raising the possibility that the company could face antitrust legal problems and accusing it of using the U.S. Post Office as a “delivery boy.”

Shares of Amazon initially dropped by 2 percent but quickly made up about half those losses. The broader stock market was close to flat in morning trading.

While Trump has complained before about Amazon paying less than it should to the Post Office, the possibility of an antitrust claim is likely the more serious threat to Amazon. Amazon could easily afford to pay more for shipping but a successful antitrust case against the company could force it to be broken up.

Under currently dominant U.S. legal interpretations of antitrust law, however, it would be very hard to prove Amazon had breached the law. Ever since conservative legal scholar Robert Bork revolutionized antitrust law in the late 1970s and early 1980s, antitrust has focussed on whether a company’s actions have done “harm to consumer,” which mostly means resulted in higher prices. For the most part, Amazon’s acquisition and expansions push down prices, making that line of inquiry a dead-end.

But the idea of using antitrust to rein in tech companies in general, and Amazon in particular, is still being discussed by legal scholars. Progressive legal scholars, long critical of the Bork interpretation of antitrust, have been the leaders in this area, creating an unusual overlap with Trump’s animus toward Amazon. But lately the idea is getting attention from Trumpian and conservative outlets as well, with American Affairs running a major piece about the problems raised by tech behemoths.

Frank Pasquale, professor of law at the University of Maryland, described what he calls the Antitrust Jeffersonians:

The guiding spirit of Jeffersonians is the original intent of U.S. antitrust law—that immense corporations are so capable of dominating their customers, employees, and communities that they need to be broken apart. Dividing a large corporation into smaller parts is a “structural remedy,” because it addresses fundamental ownership stakes and control in society. This populist demand to break up the largest corporations has inspired antitrust attacks on firms ranging from Standard Oil to Brown Shoe to Microsoft.

A more successful approach by the Jeffersonians, however, may be to avoid antitrust altogether and start from first principles. If these tech companies are a threat to America’s economic dynamism and political liberty, their size can be dealt with directly. The U.S. in the 1930s broke up the big financial companies by passing laws that mandated the securities, insurance, and banking businesses be separated. In the late 1950s, faced with the rise of conglomerates that housed insurance companies with commercial businesses such as airlines and movie studios, Congress passed a law cleaving commerce from banking.

Today that could mean separating communications from commerce. Amazon would be divided between its cloud services business, on the one hand, and its retail and media busineses on the other. AT&T’s acquisition of Time Warner would be reversed on the grounds that Time Warner falls on the commerce side and AT&T on the communications. Google’s ad sales and search would be divorced from its cloud server and Android phone business.

.