Amazon HQ2: Is Jeff Bezos Keeping His Friends Close And DC Regulators Closer?

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Written by Dana Sanchez

While hype grows about Amazon HQ2, government regulators are changing the way they interpret antitrust law. They’re taking a closer look at the market power and digital economy of Amazon and other tech giants.

In an environment of anticipated regulations for big tech companies, is it a coincidence that there’s growing buzz about the Washington, D.C. area being a likely choice for Amazon’s second headquarters?

“One could see how 50,000 Amazon employees living alongside those who regulate them could be a promising arrangement for the boss. But those in Bezos’s circle warn against seeing the CEO’s travels here as a thumb on the scales in Washington’s favor.” — Washingtonian

Cities around North America have been offering tax incentives to Amazon in an effort to become the online retailer’s second headquarters. Amazon CEO Jeff Bezos, who owns the Washington Post, said Thursday that he plans to announce his HQ2 choice this year.

Part of the appeal is the expectation that Amazon HQ2 will bring an estimated 50,000 well-paying jobs to the region it chooses. Bezos made a commitment to spend $5 billion in the city that becomes HQ2. The company said it was looking at metropolitan areas with 1 million people and a stable, business-friendly environment.

Amazon HQ2
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In January, Seattle-based Amazon.com Inc. narrowed the field of wannabe HQ2 cities from 238 to 20. Included in the top 20 was Northern Virginia, Montgomery County, Maryland, and Washington, D.C. That means D.C. owns three spots on the short list. New York is the only other metro area on the list with more than one (New York and Newark, N.J.).

A Northern Virginia bid has long been viewed as the frontrunner, said Joseph Parilla, a fellow at the Brookings Institution’s Metropolitan Policy Program, in a Business Insider report.

President Donald Trump mounted a Twitter attack on Amazon, saying the world’s fourth-largest company is “costing the United States Post Office massive amounts of money for being their Delivery Boy.” Trump accused Amazon of being a “no-tax monopoly” and, according to a Vanity Fair article, is pondering ways to “f— with” Amazon CEO Jeff Bezos.

But it’s not Trump that Amazon has to worry about, CNBC reported:

“‘If Amazon is vulnerable to antitrust law, it will be because regulators are changing the way they interpret antitrust law’, said Lina Khan, who published ‘Amazon’s Antitrust Paradox’ in the Yale Law Journal in January. Amazon wouldn’t be punished for price gouging, since it generally pursues low prices at the expense of profits. Instead, it would be attacked for pushing other competitors out of the market. ‘It’s definitely true that you don’t want antitrust to be used in protectionist ways,’ Khan said. “But it’s also true that you can’t have competition without competitors.'”

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Amazon HQ2

There are plenty of signs pointing to Northern Virginia for HQ2, according to Business Insider. Speculation has focused on a 26-acre plot of largely undeveloped land near Dulles International Airport and an expanding Amazon presence near that site on the border of Loudoun and Fairfax counties. Less than three miles from that site is a new headquarters for Amazon Web Services, and the company plans to build a 600,000-square-foot data-center campus on a 44-acre plot of land within a 10-minute drive of the possible HQ2 location.

The site is also at the center of Data Center Alley, described as “the bull’s-eye of America’s internet” through which much of the world’s internet traffic travels, Business Insider reported.

Virginia had the highest average number of open Amazon job postings from May through July of any of the HQ2 finalists, according to GeekWire.

Bezos spends more time in Washington, D.C. than in any other city outside of Seattle—10 trips a year, give or take, Washingtonian reported in April. In addition to owning the local newspaper, Bezos owns the largest home in D.C. — a 27,000-square-foot mansion in Kalorama. In 2017 he began renovating and expanding it — “the plans for which foretell the ambitiousness of the life he intends to have here. All of this prefigures the question of whether Amazon will bring its new headquarters … to Washington, too.”

 


About Dana Sanchez

Dana Sanchez was born in South Africa and is a U.S. citizen. After working in advertising, she went back to school and earned a master's degree in journalism from the University of South Florida. As a business writer, she won regional and national writing awards. As editor of a daily newspaper, she coordinated staff writers, freelancers and photographers in the fast-paced environment of daily news. Dana was an editor at Moguldom Media Group for four years, helping to build and manage a team of staff and freelance writers. She works now on Moguldom.com for Nubai Ventures. A long-distance hiker and cyclist, she writes about the business of technology.