Amazon's decision to pull out of NYC is latest setback
San Francisco — Amazon's decision to pull out of a massive New York City development Thursday is the latest complication for a company plagued by setbacks in recent weeks, including founder Jeff Bezos's clash last week with the National Enquirer and heightened antitrust scrutiny against the retail giant in Europe.
For the moment, those events are unlikely to threaten Amazon's brand and business with consumers, but they're indicative of the mounting challenges the online giant has to contend with as its reach and influence expands.
"As you get bigger and more successful, you have more of a target on your back," said Dan Ives, analyst at Wedbush Securities.
Amazon did not return a request for comment.
Amazon's New York investment would have put 25,000 jobs in the Long Island City neighborhood of Queens, at a cost of nearly $3 billion in tax breaks. Local activists called that a corporate giveaway, one made even less palatable by Amazon's anti-union stance.
That grass-roots rebellion suggests that people are growing more skeptical of big tech companies, especially when government is cutting them special deals, said Blair Levin, a policy adviser to New Street Research and a former chief of staff to a Federal Communications Commission chairman.
"Time and time again, the public has seen promises made and reality is different," he said. "So they're going to be skeptical of Amazon. And it's across the board, not just Amazon."
Several European nations are also investigating Amazon's alleged anti-competitive activity. On Thursday, Austria's antitrust agency said it is reviewing complaints that the company is favoring its own products and discriminating against other sellers on its e-commerce site. German antitrust authorities and the European Commission are investigating Amazon for similar claims.
In the U.S., politicians are also speaking out against Amazon's practices, said Barry Lynn, executive director of Open Markets, an institution that studies corporate monopolies in the U.S.
Lynn argues that Amazon is a monopoly that should be more heavily regulated by the government. He pointed to comments Sen. Elizabeth Warren, a Massachusetts Democrat who is running for president, made last year about Amazon's "anti-competitive" practices.
"The word is out, the discussion is ongoing," Lynn said. "It's not going to go away, it's only going to get louder."