Amazon HQ2: Is Jeff Bezos Keeping His Friends Close And DC Regulators Closer?
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.
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.'”
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.”
— Joshua Holland (@jholland218) September 12, 2018
"We need to prepare [for Amazon] whether it happens or not," says @tweetelissa. Even if #HQ2 goes to another nearby jurisdiction, it would still affect D.C. "We should start strategizing. How are we gonna deal with an influx of high-income workers?" @kojoshow
— Ally Schweitzer (@allyschweitzer) September 14, 2018
Be on the lookout for groups of 40ish people who don't look like tourists being bused through certain neighborhoods this week. May or may not be accompanied by the world's richest man. #HQ2 https://t.co/NxUKMAt0VH
— JDLand (@JDLand) September 11, 2018
Bezos and Amazon are playing municipalities with this protracted #HQ2 search. It will be important to see what sort of tax breaks the "winning" location gives
— Marc Christopher (@MarcC856) September 14, 2018
One wildcard Amazon #HQ2 destination I wouldn't rule out: Dallas
— Jason Del Rey (@DelRey) September 8, 2018
— Erin D. Caldwell (@ErinDCaldwell) September 14, 2018