Former Walmart CEO, of All People, Says Congress Should Break Up Amazon

Racked is no longer publishing. Thank you to everyone who read our work over the years. The archives will remain available here; for new stories, head over to Vox.com, where our staff is covering consumer culture for The Goods by Vox. You can also see what we’re up to by signing up here.

Here is something that a former Walmart executive, Donald Trump, and you, probably, agree on: Amazon is putting a lot of people out of business, and that is probably not a great thing.

Yesterday on CNBC, Bill Simon, the former CEO of Walmart US, said that Congress should consider splitting up Amazon, because it’s “destroying jobs, and it’s destroying value in the [retail] sector,” adding, “It’s anti-competitive, it’s predatory, and it’s not right.”

The one-time leader of the largest company in the world also expressed concern that Amazon will “hurt small retailers, and it’ll hurt specialty chains. You see what’s happened to Toys R Us and department stores. J.C. Penney is in trouble.”

Empathy for underdogs feels particularly hypocritical coming from Simon, who presided over Walmart US when the U.S. Department of Labor forced it to pay $4.83 million in back wages and damages for violating the Fair Labor Standards Act’s overtime provisions. Walmart’s ability to sell items at unmatchably low prices is built on low wages and poor benefits for its more than one million hourly workers — which is comparable to Amazon’s mistreatment of its factory employees as well as its white-collar workers.

The statements are also reflective of the long-standing competition between the two retailers, with Walmart holding onto its big box stores in rural areas and Amazon dominating the online space. Though Walmart’s overall revenue is three times that of Amazon’s, over the past two years, Walmart has attempted to increase its internet influence by purchasing online retailers from Jet to Modcloth, ShoeBuy, Moosejaw, and Bonobos.

But by now, Simon is far from alone in expressing concern over Amazon’s unprecedented dominance. Just yesterday, the President tweeted criticism that “they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!” [sic]. Some of his comments, however, were outdated or mistaken — Amazon now does pay sales tax on its own goods (though not on those sold by third parties), and the U.S. Postal Service benefits from Amazon using it. And besides, they may have more to do with Trump’s disdain for the Washington Post, which Amazon CEO Jeff Bezos also owns.

What would a broken-up Amazon even look like? That’s pretty unclear: A recent Fast Company piece noted that while in the past, monopolies were broken up when they gained control over the platforms through which their products were distributed, in our current digital economy, the platform is the business.

So yes, powerful people are closing in around Amazon — but as the New York Times recently pointed out in regards to antitrust allegations, “anyone bringing that against Amazon would have to explain why Walmart would not be a target, too.”