Merchant groups target Amazon in new political campaign

WASHINGTON -- Merchant groups are forming a national coalition to campaign for stricter antitrust laws, including measures that could force Amazon.com Inc. to spin off some of its business lines.

The effort is being launched Tuesday by trade groups that represent small hardware stores, office suppliers, booksellers, grocers and others, along with business groups from 12 cities, organizers say. Merchants plan to push their congressional representatives for stricter antitrust laws and tougher enforcement of existing ones.

The groups, which collectively represent thousands of businesses, want federal legislation that would prevent the owner of a dominant online marketplace from selling its own products in competition with other sellers, a policy that could effectively separate Amazon's retail product business from its online marketplace.

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Members of the House Antitrust Subcommittee are considering legislation along those lines as they weigh changes to U.S. antitrust law, though no bill has yet been introduced.

The merchant groups also want tougher enforcement of competition laws and legal changes that would make it easier for the government to win antitrust lawsuits against big companies.

In a statement, an Amazon spokesperson said the company's critics "are suggesting misguided interventions in the free market that would kill off independent retailers and punish consumers by forcing small businesses out of popular online stores, raising prices, and reducing consumer choice and convenience."

"Amazon and third-party sellers complement each other, and sellers having the opportunity to sell right alongside a retailer's products is the very competition that most benefits consumers and has made the marketplace model so successful for third-party sellers," the spokesperson added.

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Amazon also has developed its own public-relations campaigns to showcase success stories. At an event in Washington in 2019, sellers of baby products and cooking spices gave out free samples and talked about how their startups grew thanks to the Amazon marketplace.

Members of the coalition, dubbed Small Business Rising, include the National Grocers Association, the American Booksellers Association and the Alliance for Pharmacy Compounding.

They aim to capitalize on local business owners' connections to their hometowns by meeting with members of Congress and staff, writing letters, seeking coverage in local media, and other efforts.

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"Those stories are powerful and are motivating for lawmakers," said Stacy Mitchell, co-director of the Institute for Local Self-Reliance, a research and advocacy group that forms partnerships with independent businesses that led organization of the campaign. "It's a real business that is really going to go under with a real community that is going to suffer as a result."

The small-business owners might struggle to counter big businesses and their lobbyists, who are pressing Congress to leave antitrust laws alone. Amazon disclosed spending about $18 million on lobbying last year on antitrust and other issues, the second largest among U.S. corporations.

Proponents of stricter antitrust policy can count some victories early in the Biden administration. Two critics of Amazon and other big tech companies, Columbia University law-school professors Tim Wu and Lina Khan, have been named to jobs in the White House and Federal Trade Commission, respectively. (Ms. Khan's appointment still requires approval by the Senate.)

The Small Business Rising campaign has grown out of meetings the groups have held for months. It won't have its own staff and will rely on the existing budgets of member organizations.

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Besides lobbying, another goal is recruiting more business owners to talk publicly about antitrust issues, said Derek Peebles, executive director of the American Independent Business Alliance, a network of local business groups in places such as Cambridge, Mass., and Madison, Wis.

The business owners come from different industries, but competition from Amazon is a common thread.

Doug Mrdeza, a Michigan-based merchant on Amazon's marketplace, said he laid off close to 40 employees in late 2019 after Amazon raised his fees and struck deals with some of his suppliers to sell products itself, cutting him out of the supply chain.

David Guernsey, chief executive of Virginia-based office supplier Guernsey Inc., says government agencies are buying more on Amazon's site, but he is wary of selling there because it would mean giving Amazon access to data on his prices, transactions and customers.

"I've never had a competitor that had that kind of insight to my business," he said.

The Wall Street Journal has reported on some of Amazon's tactics and use of seller data.

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Allison Hill, chief executive of the American Booksellers Association, said some of the group's roughly 1,800 independent bookstores have started "sleeping with the enemy" -- selling on Amazon's marketplace -- to survive.

"If a company was operating that marketplace and was not your competitor, they would be offering very different support and services," she said.

Seventy-five of the bookstore group's members closed down in 2020.