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Amazon vs Trump: Web Giant Retools As K Street Scrambles

Created: 03 April, 2018
Updated: 21 November, 2022
4 min read

Amazon CEO Jeff Bezos offered to shoot Donald Trump into outer space back in 2015 after a stinging Trump tweet. Last week a barrage of Amazon aimed twitter missives arrived in the world’s inbox courtesy of the White House. No one knows where Bezos wants the President to go now. We can only guess.

Amazon stock dipped to $1,377 at the kickoff of renewed barbs on Thursday. It was not helped by a broader tech sell-off compounded by China trade war fears. Analysts yelled, "It's Trump and Amazon and China!"

But don't let those numbers fool you. The road to Wall Street often starts in Washington, more particularly at K Street. By Good Friday Amazon dropped two 'Kings of K Street' lobbying firms, its shares remained low, and the drama has continued.

After taking a Twitter break for Easter, we saw it begin anew this week on Monday morning:


And then Tuesday:


The shot across the bow came in the middle of last week when rumors of Trump's obsession with Amazon regulations hit the press on Wednesday- warning: Tump is on a low boil. Amazon stock dropped $110.


 And before the weekend, two of Amazon's Washington lobbying contracts were finished as first reported by Bloomberg



K Street Is Scared & Amazon Grows Its Arsenal

Akin Gump Strauss Hauer & Feld along with Squire Patton Boggs were charged by Amazon with pushing favorable tax legislation and getting friendly with regulators controlling everything from oversight of antitrust law to cloud computing to drones affected by federal aviation rules. Amazon was known to be unhappy with recent tax legislation and many wondered how much danger Trump posed to its hopes for favorable regulation. The company's in-house stable of lobbying talent has doubled from 14 to 28 since Trump won the presidency. Amazon denied any connection between the tweets, the taxes, and the K Street breakup. “It’s commonplace for us to work with different consultants based on evolving business priorities,” the company said in a statement. 

As Amazon's evolving business priorities extended its reach to third-party sellers, grocery, pharmaceuticals, and cloud storage, it’s extended its presence in Washington. It's worth noting that Amazon Web Services has a contract worth up to $600 million to host data for the Central Intelligence Agency. In 2017 alone it forked over $13 million in lobbying to advocate for legislation and regulation.  And the company has shelled out almost one million dollars in the 2018 election cycle.

As the largest online retailer Amazon gobbled up 310 million active customers in sales as of the last reported period according to Statista, as consumers increasingly turn to online shopping. Amazon is the most valuable retailer in the United States by market capitalization and is the fourth most valuable public company in the world. It's a reputation as a battering ram of mom and pop shops not to mention big box stores.   Brick and mortar stores have seen 6,700 closures nationwide in 2017 and at 3,258 so far this year according to Fung Global Retail & Technology, a retail think tank. 

It's Big But It's Not Killing the Post Office

Fact check on sales tax:  People who buy products sold by Amazon pay sales tax in all states that have a sales tax. But not all third-party vendors using Amazon collect - that’s putting it simply.

Fact check on the U.S. Post Office: Amazon ships with the PO ships at widely acknowledged below market rate losing around $1.46 per box. And it The Postal Service saw a net loss of $2.7 billion in fiscal 2017. But it’s not “losing money” to Amazon! It’s just not getting all it could.  

Now the world is waiting for a Bezos response like the one after Trump’s 2015 smash hit:


To which we were treated to this intergalactic offer: 


Bezos can’t duck for cover. Trump has adjusted his scope, set his sites on Amazon and it could be forever in the crosshairs.

At the opening bell Wednesday, Amazon stood at $1,358 a share, down $157 from a month ago, and Bezos is still the wealthiest man in the world with $115.8 billion. But standby because The Postal Service Board of Governors could raise rates on Amazon. It needs at least four new members to have a quorum for meetings, and three nominees are awaiting hearings in the Senate.  Amazon's contract with the PO runs out in October. Maybe the Senate will bow to more twitter pressure from the Oval Office and put the pedal to the medal on confirmations. Also, Tuesday night it was reported that Trump had dinner with an executive from Oracle, which is in heavy competition with Amazon for a multi-billion dollar computing contract with the Pentagon.

We'll see how far that $13 million of Amazon K Street money and campaign contributions will go, however,  Bezos does have an ace in the hole. He owns an influential lobbyist in its own right: the Washington Post.  I'll just leave that here.


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