Antitrust threats and more woes await Amazon next CEO
By Jay Greene, Cat Zakrzewski
SEATTLE - Within a day of Amazon announcing that longtime cloud-computing head Andy Jassy would succeed Jeff Bezos as chief executive this summer, D.C. lawmakers had their own welcoming messages for the e-commerce giant's incoming boss.
"I think he should expect to appear before our committee," Sen. Amy Klobuchar of Minnesota, the top Democrat on the Senate antitrust subcommittee, said in an interview. "I look forward to talking to him about competition issues."
As a 24-year Amazon veteran and longtime Bezos confidant, Jassy isn't a stranger to the challenges Amazon faces. But the criticism of Amazon's conduct as a business partner, a rival and an employer have never been more fevered. Lawmakers and regulators are considering action to curb Amazon's alleged antitrust violations. The company faces a union drive in Alabama that, if successful, could mushroom into a nationwide movement. And the company's own technical staff continue to pressure the company to embrace environmental policies it has so far shunned.
As Klobuchar and other Amazon critics made clear when the executive transition was announced Tuesday, Jassy won't get any sort of honeymoon period when he assumes his new post.
"What really needs to change is Amazon's practice of dehumanizing and mistreating its workers. Andy Jassy can and must do better," said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union (RWDSU) that is in the midst of a drive to organize more than 5,800 workers at an Amazon warehouse in Bessemer, Ala. "We will continue to demand - no matter who may have the title of CEO - that Amazon treat its workers with the dignity and respect they deserve."
All of the challenges Jassy will face - antitrust regulation, unionization of its warehouse staff, unrest among its tech workers - threaten to undermine Amazon's ability to control its future and make corporate decisions unencumbered. They could increase costs and hamper growth. If Jassy is unable to handle those threats, Amazon could find itself handcuffed as it tries to enter markets, expand to new regions or acquire businesses.
Amazon declined to make Bezos and Jassy available for comment. Amazon has repeatedly denied it uses its market clout to compete unfairly. It has said that its workplaces are safe and that its workers are well compensated relative to similar jobs. It also says it has taken important steps to reduce its carbon emissions.
Some of the attention and criticism that has been directed at Bezos, one of the world's wealthiest individuals, could shift to Jassy. Protesters have marched outside Bezos's homes. But Bezos is likely to remain in the spotlight for his personal life, which has been splashed across the gossip pages.
(Bezos owns The Washington Post.)
Amazon's opponents will probably find Jassy to be not much different from Bezos. The two have worked closely for more than two decades, and Jassy even shadowed Bezos in the early 2000s as his technical assistant, something of a chief-of-staff role. Like Bezos, those who know Jassy expect him to take the criticism of Amazon in stride.
"He doesn't think everything Amazon does is perfect, but he listens," said a person familiar with how Jassy operates, who spoke on the condition of anonymity because he's not authorized to speak publicly about him.
And Jassy isn't a stranger to the public battles Amazon faces. The Jassy-run Amazon Web Services made the call last month to suspend Parler, a pro-Trump social network that allowed hateful posts that threatened violence, as a customer of its cloud-computing service. The move, which effectively silences Parler, provoked ire from some conservatives.
"Andy's not afraid to make tough decisions," the person said.
Jassy has also been the face of Amazon Web Services' ongoing battle with the Pentagon over a lucrative cloud-computing contract awarded to Microsoft in 2019, even though most analysts expected Amazon to win the deal. Amazon formally challenged the decision, alleging that President Donald Trump was biased against Amazon and Bezos because of his ownership of The Post, whose coverage the then-president criticized.
"When you have a sitting president who is willing to share openly his disdain for a company and the leader of that company, it makes it really difficult for government agencies, including the DOD [Defense Department], to make an objective decision without fear of reprisal," Jassy said during a news conference two months later.
Moreover, Jassy will have a group of lieutenants - policy, human resource, legal and operations chiefs - who are seasoned in the fights the company has long faced.
"Amazon is prepared for this," said Craig Berman, a former senior communications official who left in 2018 after 14 years at the company. "They take succession planning very seriously."
The most public and perhaps most daunting battle Amazon will face in the coming months is in D.C. Antitrust scrutiny of Amazon is expected to only escalate with Democrats, long critical of the company, in control of the White House and commanding a majority in Congress.
Some of the company's top critics are now in positions of power where they can follow through on long-running promises to hold Amazon accountable. Sen. Elizabeth Warren, D-Mass., who recently was named to the Senate Finance Committee, says she will keep pushing for greater accountability of the company.
"Amazon has bulldozed its competition, used private data for profit, and rigged the game against the sellers on its platform - they've also shown too little regard for the safety and the financial wellbeing of their warehouse and delivery workers," she said in a statement. "They need to be broken up and better regulated and I'll keep pushing for that, no matter who their CEO is."
Rep. Pramila Jayapal, D-Wash., who grilled Bezos as a member of the House antitrust subcommittee last year, said she expects to see legislation introduced in the House to address anti-competitive behavior in the tech industry within the next six months.
"We need to rein in behavior that violates antitrust law and monopolistic behavior, and Amazon is going to be part of that work," Jayapal said in an interview.
Amazon has been at the center of congressional efforts to overhaul competition laws, zeroing in on allegations that Amazon preferences its own products in its marketplace over those from third-party sellers. Facebook, Google and Apple have also faced scrutiny. Lawmakers are also considering proposals that would increase funding and powers of agencies tasked with antitrust enforcement, such as the Federal Trade Commission.
The FTC, which was tasked with scrutinizing Amazon during the Trump administration, awaits President Joe Biden to name a permanent chair of the commission and fill key vacancies. But Biden's choice for acting agency chair, Rebecca Kelly Slaughter, has advocated for the commission to act more quickly to penalize the tech industry for missteps.
"All of this foreshadows close scrutiny and intervention in the affairs of Amazon, without a doubt," said William E. Kovacic, a former chair of the FTC who teaches law at George Washington University. "You can hear the destroyer coming and dropping the depth charges into the water, it's just a matter of time. And then boom there they go!"
When Bezos testified before the House's top antitrust subcommittee last summer, he rebutted lawmaker claims that Amazon's clout stifles competition. The company provides a marketplace where third-party merchants have the opportunity to reach customers they might not otherwise have had, Bezos said, and Amazon's success is built on the ability of those sellers to thrive, too.
"Customer obsession has driven our success, and I take it as an article of faith," Bezos said as he read from his opening statement. "The customers notice when you do the right thing."
Even internally, Jassy will have critics to manage. Last April, Amazon fired two of its headquarters workers who had been outspoken critics of Amazon's warehouse working conditions during the coronavirus pandemic and the company's climate policies. Three months earlier, the workers were among more than 350 employees who engaged in a mass defiance of company rules by publicly criticizing a variety of Amazon policies in a post on Medium.
On Wednesday, Amazon Employees for Climate Justice called out Jassy for providing cloud-computing services to fossil fuel companies.
"Our CEO transition is just another opportunity for workers to join together and demand that Amazon address its own complacency," the group said in a statement. "We know that true leadership and courage has been demonstrated by workers speaking up, not by CEOs, and Amazon must listen if Amazon wants to be part of the solution, not the problem."
To reduce its carbon emissions, Amazon created an initiative dubbed "The Climate Pledge" in 2019 - a commitment to reach the Paris agreement 10 years early. In December, Amazon added Microsoft, Unilever and 11 other companies to the initiative.
Amazon's battle with the union trying to organize its Bessemer warehouse workers is scheduled to begin Monday, when the National Labor Relations Board mails ballots to 5,805 workers there. Pro-union workers who spoke with The Post expressed a litany of workplace concerns, including asking for a return to hazard pay Amazon introduced at the beginning of the pandemic.
The company has countered that it offers Bessemer workers a starting pay of $15.30 an hour, along with health-care, vision and dental benefits and a retirement plan. It has called that compensation package better than what comparable jobs provide, and a spokeswoman has said the company doesn't believe "the RWDSU represents the majority of our employees' views."
The Washington Post