Has online retailer Amazon.com destroyed the retail industry across the U.S.? Those are the harsh words used this week by Treasury Secretary Steven Mnuchin.
The government has decided to look into whether Amazon has gotten too big -- too powerful for fair competition.
The outcome could be of particular interest to regions like Tampa Bay because the company not only has a digital presence here, it’s also got a huge physical presence.
Lisa Scott says business at the Hot Tomato in Ruskin has only gotten hotter since Amazon came to town. The restaurant is just down the street from the huge distribution center along I-75.
“It gets packed. It gets packed,” Scott said. “Yes, a lot of the employees come in here. And a lot of them we see are regular faces. Like two or three times a week.”
When the online retailer built its huge distribution center in Ruskin and its fulfillment Center in Lakeland, it was a catalyst. It created just jobs at Amazon, but also work for delivery drivers, maintenance techs, construction and service industries like restaurants and more.
At the same time, some jobs have disappeared. Big box stores like Kmart, Toys R Us, and Sears have blamed online competition.
So, this week, the U.S. Justice Department launched a formal antitrust review of some of the nation’s largest tech companies, including Facebook, Apple, Google and Amazon.
Treasury Secretary Steven Mnuchin said in his opinion it’s absolutely right to investigate.
“I think, as you know, if you look at Amazon, although there are certain benefits to it, they’ve destroyed the retail industry across the United States,” said Mnuchin. “So, there’s no question they’ve limited competition.”
In a statement, Amazon says small and medium-sized businesses are actually thriving thanks to its platform, and that independent sellers represent 58 percent of merchandise sold on Amazon.
Those companies have seen sales growth twice that of Amazon itself, said the online retailer, accounting for $160 billion worth of business in 2018.
“I know some people have some issues because of, the one, it puts a lot of people out of work, so to speak,” Amazon customer Rick Kensey said. “But I’m fine with it. I love the convenience of it.”
“It’s cheaper prices, but I can see for the small store owner, the small businessman, the one mom-and-pop type shops, it becomes more difficult for them to compete,” said Ron Kimble, describing himself as a huge Amazon fan.
The other tech giants under investigation deal mostly in information and entertainment, raising privacy and security concerns.
Amazon is the one that most likely to directly affect people’s pockets.
There’s been no word yet on what the government would do if it found antitrust issues. But the Tampa Bay region could have more riding on that decision than most.
“It would affect some of us you know, little people,” said Scott.
While Amazon’s influence is undeniable, the company points out its business represents less than 4 percent of U.S. retail.