The company was launched by founder Jeff Bezos in 1994 as an online bookstore, but it has since ballooned into the world’s largest e-commerce company that sells virtually everything, including electronics, apparel, furniture, food, toys, and much more.
In addition to e-commerce, Amazon’s revenue comes from subscription services, cloud computing services, Whole Foods grocery sales, and other areas. It also builds and sells its own consumer electronics, such as the Amazon Kindle and Amazon Echo. Amazon Web Services is the world’s largest seller of cloud computing services. The company’s entertainment-streaming service also produces its own movies and TV shows, and Amazon Music provides access to millions of songs.
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Amazon’s Latest Developments
- On June 30, 2021, Amazon sent a 25 page petition to the Federal Trade Commission (FTC) asking the new FTC chair, Lina Khan, to recuse herself from any FTC rulings on the company. Amazon argued that because Khan has criticized Amazon so often, that “she no longer can consider the company’s antitrust defenses with an open mind.”
- On June 24, 2021, the House Judiciary Committee approved six antitrust bills which could have a major impact on Amazon, as well as other major tech companies such as Microsoft, Alphabet, and Apple. From here the measures will go to the House floor for debate. The measures are the:
- American Choice and Innovation Online Act: This law would ban tech firms from advantaging their own products and services on their platforms. For example, Apple couldn’t promote its own apps over others in its App Store.
- Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act: The ACCESS Act would force big tech companies to let users easily move their data between platforms.
- Ending Platform Monopolies Act: This bill would ban big tech firms from owning or operating businesses that would create conflicts of interest. For example, Google might be forced to sell Youtube since it is incentivized to favor YouTube in its search results over other video services.
- Merger Filing Fee Modernization Act: This bill would raise merger fees for large mergers.
- Platform Competition and Opportunity Act: This bill would force big tech companies to prove acquisitions were not monopolistic, shifting the burden of proof to them from the FTC.
- State Antitrust Enforcement Venue Act: Which would make it harder for defendants in antitrust cases brought by states to move the case to other jurisdictions.
- On June 13, 2021, Amazon debuted a number of different robots being developed for use in Amazon’s warehouses in order to decrease the number of worker injuries.
- On June 11, 2021 five draft antitrust bills were introduced into the House of Representatives. While they have not passed committee hearings yet, the passage of any of the bills would likely mean substantial changes for the way Amazon does business. The bills are the Ending Platform Monopolies Act, the American Choice and Innovation Online Act, Platform Competition and Opportunity Act, the Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act, and the Merger Filing Fee Modernization Act. Examples of major antitrust changes these bill introduce include forcing dominant online platforms to prove that their acquisitions are not monopolistic, rather than the FTC proving they are not and making it harder for platforms to advantage their own products or services.
- On May 26, 2021, Amazon announced it would purchase MGM Studios for $8.5 billion, including debt, or $6.5 billion excluding debt. The purchase of the movie studio, which owns intellectual properties such as the James Bond and Rambo franchises, is meant to help Amazon’s own streaming service, Prime Video, compete in the increasingly fierce streaming market.
- On May 12, 2021, the EU’s second-highest court overturned a 2017 order by the European Commission to pay Luxembourg $300 million in taxes. The Commission had argued that Amazon had structured its European operations in a way to improperly understate its earnings by paying royalties to an untaxed holding company in Luxembourg. The court ruled that the European Commission’s analysis was flawed and did not prove that Amazon violated the law.
- On April 29, 2021, Amazon reported its FY 2021 Q1 earnings for the quarter ending March 31, 2021. It reported sales of $108.5 billion and earnings per share of $15.79. Both of these figures were significantly higher than analysts’ expectations.
- As of April 9, 2021, 80% of the ballots in the Bessemer, Alabama, warehouse union vote have been counted and 71% of the voters were against against forming a union. While the National Labor Relations Board (NLRB) hasn’t certified a winner or finished counting contested ballots, it did note that the remaining ballots were not enough to exceed the existing margin against unionization.
- On March 17, 2021, Amazon announced that it was expanding its Amazon Care telehealth service, currently available to its employees in Washington state, to other employers across the state. It will be expanded to be accessible to all Amazon employees this summer and to Washington, D.C., Baltimore, and other cities in the coming months. Amazon Care was launched in 2019 as a pilot program for Amazon employees in Washington state.
- On Feb. 2, 2021, Amazon’s CEO Jeff Bezos announced that he planned to leave his post later in the year, turning over the role of CEO to the company’s top cloud executive, Andy Jassy. Bezos will be transitioning to executive chair of Amazon’s board. In the same press release, Amazon announced its results for its 2020 fiscal year. Amazon’s revenue exceeded analysts’ expectations, and earnings did so substantially. Revenue from Amazon’s high-margin Amazon Web Services (AWS) segment grew but fell short of analysts’ expectations.