A PYMNTS Company

HQ2 Is an Antitrust Issue

By  |  November 15, 2018

By Ron Knox

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    Amazon’s “contest” for extracting massive subsidies from cities shows how it flexes its monopolistic power.

    Whatever glimmering opulence Amazon brings to its new campuses in Queens, New York, and Crystal City, Virginia, will be paid for with more than Prime memberships. The e-commerce giant will have paid for them with its size and influence. Critics of the company and these deals may see Amazon’s retail and real estate practices as separate issues—one of market concentration, the other of runaway corporate welfare. In fact, they’re both issues of monopolistic power. Amazon secured its lavish, taxpayer-funded agreement to open East Coast headquarters in Queens and Arlington by flexing the same bargaining muscle the company has used for years to crush rivals and snatch market share.

    Critics see a strong antitrust case in the way the world’s largest online retailer has wielded its power against merchants and manufacturers. They can add local governments to the list. “Amazon expects to dictate terms to everybody,” says Stacy Mitchell, the co-director of the Institute for Local Self-Reliance and a longtime Amazon critic. “That includes sellers, suppliers, and now cities.”

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