Amazon's New Chief Andy Jassy Predicts Rough Roads Ahead with Regulations and Unions

[Asia Economy Reporter Yujin Jo] Andy Jassy officially took office as Amazon CEO on the 5th (local time), following Jeff Bezos. While Amazon's major businesses, which expanded aggressively under Bezos' strong ownership, have structurally experienced growth, numerous challenges remain to be addressed amid intensified antitrust regulations under the Joe Biden administration and labor disputes shaking the company's no-union principle.

(Photo by NBC)

◆ ‘Offense in Business, Defense in Regulation’ Contrasting Survival Strategies = CEO Jassy is expected to tighten the reins on Amazon's core businesses, which have formed a triangular alliance in e-commerce, cloud, and content sectors. Leveraging the structural growth momentum gained during the COVID-19 pandemic, he aims to achieve a 40% market share in the entire U.S. e-commerce market by the end of this year.

In the AWS business, which is both a cash cow and a key growth driver, a major task is to overcome losing contract bids to competitor Microsoft (MS) and to secure new growth engines in the online video streaming service (OTT) market following the approval of the MGM acquisition.

Addressing the simultaneous antitrust controversies raised by Congress and regulatory authorities is also a formidable challenge.

The Wall Street Journal (WSJ) reported last month that among the package bills introduced by the U.S. House of Representatives to regulate unfair monopolies by big tech companies, the ‘Platform Monopoly Prohibition’ bill could, in the worst case, force Amazon to divest parts of its business, causing significant damage. Additionally, antitrust lawsuits from the U.S. Department of Justice in Washington D.C. and a recusal request against Federal Trade Commission (FTC) Chair Lina Khan represent urgent regulatory threats.

Foreign media have noted that the powerful lobbying team built by Bezos to counter regulatory tightening by Congress and the Biden administration will be a major support for CEO Jassy. According to the Center for Responsive Politics (CRP), a U.S. private organization, Amazon spent $18.7 million on political lobbying last year, marking one of the largest lobbying expenditures alongside Facebook.

◆ Could Labor Union Conflicts Become a New Obstacle? = Labor union conflicts in the delivery and logistics workforce are also identified as major challenges he will face. Although the first unionization attempt by warehouse workers in Alabama failed in April, new unionization movements are emerging in alliance with the International Brotherhood of Teamsters.

If the first union is formed in the U.S., it could trigger similar attempts nationwide, potentially shaking Amazon's ‘no-union management principle.’ Foreign media have reported that appropriate measures will be needed to address the unfair labor practice allegations by the Retail, Wholesale and Department Store Union (RWDSU) and criticisms of unfair labor practices.

◆ Task to Find a Breakthrough to Overcome Stock Price Stagnation = Despite quarterly sales growth exceeding 20%, Amazon's stock price has been stagnant for a year. As of the closing price on the 2nd, Amazon's stock was $3,510.98, roughly flat compared to $3,057.04 a year ago.

The biggest reason for Amazon's stock price hovering around last year's level is regulatory risk. Breaking through this regulatory risk and presenting a new vision to find a breakthrough will be CEO Jassy's new challenge, foreign media predict.

NBC reported, "Investors believe that successor CEO Jassy will struggle to maintain the growth achieved by Bezos," adding, "Just as Bill Gates' successor Steve Ballmer and Steve Jobs' successor Tim Cook faced criticism for years, technology companies operated by founders for 27 years will go through a transitional period to earn the trust of employees and shareholders."

This content was produced with the assistance of AI translation services.