Amazon Has ‘Destroyed’ Retail, U.S. Treasury Secretary says
Treasury Secretary Steven Mnuchin said he supports the Justice Department’s formal antitrust review of the country’s largest tech companies, particularly Amazon, which he said has ruined retail.
In an interview Wednesday with CNBC, Mnuchin said the company has “destroyed the retail industry across the United States” and said there’s “no question they’ve limited competition.”
Regarding the wide-ranging investigation announced Tuesday by the Department of Justice, Mnuchin said it’s “absolutely right” that Attorney General William Barr has started it.
The wide-ranging review could examine numerous firms that have been targets of criticism for having anti-competitive behavior. No specific companies were named in the release, but the Justice Department said it was looking into “market-leading online platforms,” which could include Amazon, Apple, Facebook and Google.
“The Department’s review will consider the widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online,” it said in the press release.
Mnuchin said Amazon’s dominance is different from Walmart because the latter company has “developed a business where small businesses could continue to compete with them.”
In response to Mnuchin’s comment, Amazon said small and medium-sized businesses are “thriving” on the platform.
“Today, independent sellers make up more than 58% of physical gross merchandise sales on Amazon, and their sales have grown twice as fast as our own, totaling $160 billion in 2018,” Amazon said a in statement to CNN Business.
It added: “Amazon’s retail business competes in the worldwide market for retail sales and represents less than 1% of global retail and less than 4% of U.S. retail. And the vast majority of retail sales — 90% — still occur in brick-and-mortar stores according to the US Census Bureau.”
Several aspects of Amazon’s business have attracted the attention of politicians.
Last week, Amazon representatives testified at a House hearing about online platforms and market power. The company’s dominance was questioned. According to eMarketer, it accounts for nearly 50% of the US e-commerce market.