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US: Could Amazon be open to splitting?

 |  October 16, 2019

A writer for The Atlantic, who wrote a sprawling story about Amazon, thinks that CEO Jeff Bezos will spin off the highly profitable Amazon Web Services (AWS) before antitrust regulators get a chance to break it up.

CNBC ran an interview with writer Franklin Foer, who said breaking off the service “would be the obvious thing for [Bezos] to do in the face of this.”

“I think that eventually Bezos, who is seeing around corners, is going to break up his own company,” Foer said. “AWS exists as its own fantastically profitable business. There’s no reason that it needs to be connected to Amazon the e-retailer. And as he looks at what’s happening in politics, where there’s this increasing bipartisan consensus that Big Tech is a problem, I’m pretty sure he’s going to say, ‘okay, fine.’”

In a June interview, Andy Jassy, CEO of AWS, said the company would listen to regulators if it was ordered to split off, but that he saw no upside to doing it just yet. As for revenue, AWS made up 13% of Amazon’s total in Q2, but more than half of its US$3.1 billion in operating income for the same time period.

Amazon has so far steered clear of most of the regulatory antitrust interest, as Facebook is receiving record fines and Google is also under a microscope, but the company is reportedly the subject of inquiries from the Federal Trade Commission (FTC) and the House Judiciary Committee. There is also a looming investigation by the Justice Department that does not name specific companies.

Data is a big part of the equation, as Amazon collects a lot of information from sellers on its platform. House Judiciary Committee members recently asked AWS and Amazon how that data is used and shared.

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