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Trade Deals
Global markets are conquered by good products, competitive prices, and ethical policies. Amazon is one of the global companies whose latest trade agreements have helped the company in its international endeavors. The company decided to leave potentially unethical practices in the past and declared that from now on, it will pay sales taxes in the countries it operates. According to France 24, “More than two years ago, we began the process of establishing local country branches of Amazon EU Sarl, our primary retail operating company in Europe” (par. 3).
The company is going to operate according to the taxation legislation of the various regions of Europe. It should facilitate the process of business conducting and avoid accusations of the taxes’ evading practices. Amazon was heavily criticized for its practice of paying taxes in tiny Luxembourg. It should be noted that such practice is still used by such giants of the IT business as Google and Apple, and other companies from the different industries (France 24 par 7). Today, the company is aimed at gaining a larger share in the international markets, so fair tax-paying practices are one of the methods of gaining a competitive advantage.
Laws
The tax issue has become the target of the laws regulating monopolization of the market. It appeared that such a method of evading tax paying in the countries where large companies operate created the risk of gaining an unfair advantage over the other companies. Amazon agreed to change its tax-paying practice in Europe and “has begun booking revenue by country in some of its biggest markets, including the U.K., Germany, Italy, and Spain” (CBC News par. 3).
It will clearly impact the growth of Amazon globally. However, only fair tax-paying practices can provide Amazon with the opportunity to develop globally and penetrate other strategic markets throughout the world. Unfair competition is advantageous in terms of the market share and revenue in the short term perspective only.
Amazon’s Lobby
Amazon appears to be a significant lobbyist in D.C. It is in the top 50 of the countries that spent about $715 million for lobbying activities in 2015. Amazon is among such corporate giants as Boeing, Lockheed Martin, Exxon Mobil Corp., and others (Wilson par. 1-2). The company tends to spend money on lobbying laws that regulate the taxation policies of internet sales. Online retailers like Amazon do not have to collect taxes from the items sold in the states where these retailers are not present physically.
Brick-and-mortar stores state that such a policy is unfair and provides companies like Amazon with a critical competitive advantage. Amazon applies a large amount of lobbying efforts to stop the adoption of the laws against such practice (Plumer par. 7-8). Another area of Amazon’s interests in Washington is the control on the lawsuits regarding antitrust policies of the country. Apple was recently sued for the unlawful activities with books’ prices, so Amazon wants to avoid the same situation.
Federal contracting is in the sphere of Amazon’s interests as well. Thus, the company lobbied a $600 million deal with the government to provide CIA with cloud-computing services (Plumer par. 16). Additionally, Amazon is active in the political arena as well, donating rather extensively to both Democrats and Republicans. It shows that Amazon’s lobbying activities are based on the rather diverse interests of the company in the different areas of business.
Bibliography
CBC News. 2015. “Amazon.com moves away from tax-shifting in Europe.” Web.
News Wires. 2015. “Amazon to Begin Paying Sales Tax in Europe.” France24. Web.
Plumer, Brad. 2013. “Here’s What Amazon Lobbies for in D.C.” The Washington Post. Web.
Wilson, Megan. 2016. “Lobbying’s Top 50: Boeing, Amazon on the Rise.” The Hill. Web.
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