Finance Update

Jeff Bezos: Bezos rebuts Elizabeth Warren’s Amazon breakup call in antitrust defense

By Spencer Soper

Amazon.com

Inc. Chief Executive Officer

Jeff Bezos

, in an annual letter to shareholders, argued that Amazon’s growth has benefited its third-party merchants — a veiled riposte to calls to break up the company.

Last month Senator Elizabeth Warren, a presidential candidate, laid out a detailed plan for breaking up Amazon, Google and Facebook Inc. In her vision, Amazon’s Marketplace should be separated from the rest of the site because she said it “crushes” small businesses.

“Third-party sellers are kicking our first-party butt. Badly,” Bezos wrote in the letter published Thursday.

Merchants on Amazon’s marketplace now account for 58 percent of gross merchandise sales on the platform, Bezos said. Amazon helps independent sellers compete against its own business by investing in and offering them “the very best selling tools we could imagine and build,” he wrote. Amazon Prime and Fulfillment by Amazon “meaningfully improved the customer experience of buying from independent sellers.”

Bezos routinely uses the letter to outline his long-term strategy, which made him the world’s wealthiest man and Amazon one of the most valuable companies. He also challenged rival retailers to raise their minimum wage to $16 an hour.

“Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage,” Bezos said. “Do it! Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone.”

The company in October pledged to pay all of its warehouse workers at least $15 an hour, after presidential hopefuls Warren and Bernie Sanders held out Amazon workers on food stamps as an example of the need for living-wage protections.

This was Bezos’ first shareholder letter since his personal affairs became tabloid fodder. The CEO in January announced his divorce from his wife of 25 years, MacKenzie Bezos, and the couple last week announced a settlement that leaves Bezos with 75 percent of their stock in the company. He remains Amazon’s biggest shareholder.

Bezos made no direct mention of the divorce in his annual letter, maintaining distance between the company’s operations and his personal life.

Bezos includes his 1997 shareholder letter to remind investors of his ability to capitalize on how the internet would change the nature of shopping. His strategy and outlook have developed a cultlike following similar to that of Warren Buffett, whose annual letters to Berkshire Hathaway Inc. investors are must-reads for those looking to understand the economy and Buffett’s investment strategy.

Source

Prakash Poojary
Business Analyst

Leave a Reply