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Saturday, February 22, 2020

PBS "Frontline" episode analyzes Amazon, including HQ2

The PBS series "Frontline" on February 18 broadcast a nearly two-hour investigation of Amazon, "Amazon Empire: The Rise and Reign of Jeff Bezos." There were many important points to the story.

Naturally, there was coverage of the HQ2 auction, with an interview of Good Jobs First executive director Greg LeRoy, who also spoke on Amazon's early benefit of avoiding sales tax, something brick and mortar stores can't do. In fact, Amazon did not collect sales tax nationwide until 2017.

Labor relations were another important focus of the show. Amazon is infamously anti-union, one of the issues that came up after the company announced it would put half of HQ2 in New York City. Blowback on that score was one reason Amazon pulled out of that investment. Speedup and related safety issues (i.e., that it was difficult to "make quota" in the warehouse without cutting safety corners) are one more source of contention the story focused on. The company also chose to use a delivery truck that was too small for Department of Transportation regulations to apply to it, despite having thousands of drivers and their traffic accidents. The thing is, while we can easily find out how many vehicle accidents drivers for FedEx and UPS have, there is no comparable source of information for Amazon due to its avoidance of regulation.

Needless to say, Amazon has used tax haven subsidiaries to avoid paying taxes. According to Think Progress in 2012, all of these subsidiaries were in Luxembourg. Its report said the company's tax arrangements under so-called "check-the-box" provisions of the U.S. tax code saved it $700 million in U.S. taxes up to that point. The European Union pursued tax agreements between Amazon and Luxembourg as an illegal state aid, ordering the company to repay €250 million ($294 million) to Luxembourg in 2017.

Finally, "Frontline" covers the question of whether Facebook is a monopoly or has market power. Hilariously -- and tellingly -- company executives never use the phrase "market share," only coming as close as "market segment share." But the show interviewed numerous people who recounted what happened when Amazon suddenly stopped carrying their products, and many people were afraid to come on the show because of fear of retribution from Amazon. I recommend it highly.


  1. Thanks for the reminder. I will watch this soon. I had no idea about the Department of Transportation thing; wow.

    1. Hi Patrick. Yes, the avoidance of Department of Transportation was new to me, but it certainly fits with Amazon's avoidance of taxes and regulation.