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Amazon has ‘destroyed’ U.S. retail industry, Mnuchin says

Ryan Beene
Bloomberg News

U.S. Treasury Secretary Steven Mnuchin alleged that Amazon.com Inc. has “limited competition” and harmed the retail industry as the Trump administration announced a broad antitrust review into whether technology companies are using their power to thwart rivals.

“If you look at Amazon, although there are certain benefits to it, it destroyed the retail industry across the United States, so there’s no question they’ve limited competition,” Mnuchin said in an interview with CNBC Wednesday.

Amazon withdrew nearly $4,000 from the account of a student's father after the student was a few days late returning a rented textbook to the online retailer.

The Justice Department’s antitrust division disclosed plans to scrutinize tech platforms following mounting criticism across Washington that the companies have become too big and too powerful. The department didn’t specify which firms it would look at but strongly suggested Facebook Inc., Alphabet Inc.’s Google and Amazon are in the cross-hairs.

An Amazon spokeswoman pushed back on Mnuchin’s comments Wednesday, saying in a statement that “small and medium-sized businesses are thriving with Amazon” and that sales by independent sellers totaled $160 billion in sales on the platform last year. She also said roughly 90% of U.S. retail sales still occur at physical storefronts, citing government from the U.S. Census Bureau.

Amazon accounts for less than 4% of the U.S. retail market, the company said. Closely watched researcher EMarketer Inc. also estimates their share at about 4%. Other marketing estimates have indicated that the company’s share of U.S. retail sales is higher, with Euromonitor International Plc putting that figure as high as 7.7%.

“I think it’s very good that the attorney general is going to look into this,” Mnuchin said. “I think it’s an important issue and I look forward to him reporting back to the president and hearing his recommendations.”

Amazon slipped 1.2% in early trading as of 9:24 a.m. in New York. The stock is up more than 30% this year through Tuesday.

Of Amazon, Mnuchin said, “There’s areas where they’ve really hurt small businesses, so I don’t think this is a one-size-fits-all, and I don’t have an opinion going in other than I think it’s absolutely right that the attorney general is looking into these issues and I look forward to listening to his recommendations to the president.”

Mnuchin has seen firsthand the way e-commerce has disrupted traditional retailers. He was a board member of Sears Holdings Corp. from 2005 to 2016, an era in which the once-mighty department-store chain spiraled toward bankruptcy. His college roommate and longtime friend Eddie Lampert is still running the much-diminished retailer.