Bezos to step down as Amazon’s CEO — but isn't leaving Washington behind

 

TECHNOLOGY

Bezos to step down as Amazon’s CEO — but isn't leaving Washington behind

 

Amazon's founder is leaving day-to-day leadership of a company that created a sprawling online empire and faces rising heat in the U.S. and Europe.

 

By CRISTIANO LIMA

02/02/2021 04:33 PM EST

Updated: 02/02/2021 08:15 PM EST

https://www.politico.com/news/2021/02/02/bezos-to-leave-amazon-ceo-role-465168

 

Jeff Bezos’ decision to step down as Amazon’s CEO comes as the online retailing giant is facing unprecedented scrutiny in Washington — from antitrust probes and criticism over its tax and labor practices to its role as a gatekeeper granting other companies access to the web.

 

And his chosen replacement has been in the thick of some of Amazon’s highest-profile battles.

 

As chief of Amazon Web Services, the company’s lucrative cloud division, Andy Jassy played a role in Amazon’s decision last month to boot the conservative-friendly social media platform Parler from the internet after last month’s Capitol riots. AWS is also embroiled in a court battle over a multibillion-dollar cloud contract that the Pentagon awarded to Microsoft, amid heavy scrutiny from former President Donald Trump. Antitrust advocates including Sen. Elizabeth Warren (D-Mass.) have specifically cited AWS as a piece of Amazon that the federal government should break off to lessen the company’s power.

 

Yet to hear Jassy tell it less than two years ago, Amazon hasn’t spent much time fretting about threats from Washington.

 

“We don’t spend a lot of time talking about it,” Jassy said during a June 2019 tech conference in Arizona, as POLITICO reported at the time. He spoke just as the antitrust heat on the tech industry was ramping up, with the news that the Justice Department was moving to open a probe of Google.

 

Less than a year ago, Jassy dismissed the idea that Amazon automatically wipes out any competitor it takes on, calling it “folklore.”

 

The company announced ahead of its latest quarterly earnings call on Tuesday that Bezos “will transition to the role of Executive Chair in the third quarter of 2021 and Andy Jassy will become Chief Executive Officer at that time.”

 

The announcement marks the biggest transition of power to date for the tech behemoth, which rose from humble beginnings as an online book-selling platform to become one of the first trillion-dollar companies in history, with a sprawling footprint that includes e-commerce, cloud computing, music and video, and brick-and-mortar retailers like Whole Foods.

 

"Right now I see Amazon at its most inventive ever, making it an optimal time for this transition," Bezos said in a statement announcing the move.

 

In an email to employees, he added that he will spend more time focusing on other "passions," including his space company Blue Origin and his ownership of The Washington Post, a role that made him the continual focus of broadsides from Trump. "I’ve never had more energy, and this isn’t about retiring," he wrote.

 

Bezos, though, isn’t walking away from some of the company’s highest-stakes decisions, Amazon CFO Brian Olsavsky said on an earnings call shortly after the news broke.

 

“Jeff will be the executive chair on the board,” said Olsavsky. “He will be involved in many large, one-way-door issues, as we say — meaning the more important decisions, things like acquisitions, things like strategies, and going into grocery.” (“One-way-door” is a favorite Bezos phrase for decisions nearly impossible to reverse.)

 

He will also continue to loom large in Washington — as the owner of both the Post and D.C.'s largest private house, and as Amazon plans a new headquarters that would spiral into the skyline across the Potomac in Arlington, Va.

 

Bezos has faced intense pressure in Washington and Europe during his time helming one of the world’s most powerful and profitable companies, as well as for long holding the title of world’s richest person — a title he recently ceded to Tesla founder Elon Musk. (Bezos' net worth is estimated at $188 billion.) The Amazon mogul in recent years became a frequent target for politicians of both major parties, including former Trump and President Joe Biden, who have taken aim at his vast wealth and at the company's business practices.

 

Democrats have assailed Amazon over its wages and treatment of its workers, an issue that has gained renewed attention as demand for online shopping has soared during the Covid-19 pandemic. Biden and other Democrats have also been critical of the company for not paying a larger tax share. Rival companies have accused it of leveling competitors across the economic landscape, as the rise of online commerce that Amazon helped pioneer has pummeled once-powerful retailers including Sears, Toys "R" Us, Borders and J.C. Penney.

 

"I've said it before, and I'll say it again: No company pulling in billions of dollars in profits should pay a lower tax rate than firefighters and teachers," Biden tweeted in May, alluding to reports that Amazon had paid $0 in federal income taxes in 2019. "It's time for Amazon to pay its fair share."

 

In November, European regulators charged Amazon with misusing data from its third-party merchants and opened an investigation into potential anticompetitive practices. Allegations of how it uses sellers' data also prompted conservative Sen. Josh Hawley (R-Mo.) to call for a criminal investigation last year.

 

Earlier Tuesday, the Federal Trade Commission announced that Amazon would pay $61.7 million to reimburse customer tips it that it had withheld from its delivery drivers. The agency is separately investigating the company over alleged antitrust violations and its prior acquisitions.

 

Bezos defended the company’s business practices and approach to competition at a House antitrust subcommittee hearing in July, the tech mogul’s first congressional testimony ever and possibly last as Amazon CEO. House lawmakers had threatened to subpoena Bezos after the company initially declined to explicitly commit to making him available, but he ultimately appeared voluntarily alongside the CEOs of Facebook, Apple and Google.

 

Rep. Pramila Jayapal (D-Wash.), who grilled Bezos on how Amazon competes with rivals on its own e-commerce hub, said Tuesday that she looks forward to meeting with Jassy and "continuing to work with Mr. Bezos in his new role to ensure fairness and justice for my constituents and for our country.”

 

"I intend to continue my work to ensure that we have a tax system that demands that the largest corporations and wealthiest individuals pay their fair share in taxes, and — as a member of the Antitrust Subcommittee of the House Judiciary Committee — that we aggressively challenge dominant tech platforms such as Amazon and others and rein in anti-competitive behavior and monopolistic practices," added Jayapal, who hails from Amazon's home state.

 

Rep. Ken Buck (R-Colo.), another member of the subcommittee, tweeted on Tuesday that he already has "some questions for Mr. Jassy."

 

Bezos also became a lighting rod for conservatives over his separate ownership of The Post, an independently run newspaper, which Trump and his GOP allies accused of unfair coverage. But Bezos has had his own run-ins with the media — specifically the National Enquirer, which he accused two years ago of trying to "blackmail" him with compromising photos.

 

His departure from the CEO role elevates Jassy, who in 2003 helped launch AWS and in 2016 took over as that branch's chief executive officer.

 

Jassy will take the mantle atop the tech giant as it faces unprecedented levels of scrutiny from policymakers and regulators around the world, including over allegations it has used its monopoly power to unfairly squelch competitors and mistreat its workforce.

 

Robert Weissman, president of the progressive advocacy group Public Citizen, called the shift in leadership "a chance for Amazon to turn over a new leaf."

 

He added that Bezos' transition "should be an inflection point for the U.S. government. We can’t rely on Amazon to reform itself. Amazon should be broken up and its business model refashioned.”

 

Nancy Scola contributed to this report.