Jeff Bezos, Amazon billionaire in the hot seat

"Mr Bezos, I believe you're on mute." Photo / Getty

Back in January, Jeff Bezos was so eager to hobnob with the Washington elite that he invited dozens of them to his $23m mansion, even though parts of the property were still under renovation.

The gathering of heavy hitters at the converted museum now dubbed the "Amazon embassy" included Ivanka Trump and Jared Kushner, Federal Reserve chairman Jay Powell and former defence secretary Jim Mattis, yet somehow "it was very small, low key", one guest said. Bezos casually mingled over cocktails, with no overt agenda. "It must be strategic, right?" the guest said. "He's not an idiot. He just doesn't wear it on his sleeve as others have. He's doing a good job of being subtle, ingratiating himself in DC."

On Wednesday, Bezos found himself trying to cash in on that accumulated goodwill. He, and his equivalents at Apple, Facebook and Google, were summoned — remotely — to defend the runaway success of their companies at that most awkward of Washington gatherings, a congressional committee hearing. In the spotlight over antitrust concerns, Bezos sought to defend the sprawling technology company that has made him the world's richest man with an opening statement steeped in dreamy American rhetoric of opportunity and inclusion.

"My mom, Jackie, had me when she was a 17-year-old high school student in Albuquerque," he began, adding that the father who adopted him at the age of four was a Cuban immigrant who arrived in the US unable to speak a word of English. "Together with my grandparents", Bezos said, "these hardworking resourceful and loving people made me who I am."

After graduating from Princeton, Bezos worked in New York. But at 30 he left a "steady job on Wall Street" — at hedge fund DE Shaw — to move cross country to Seattle in order to found an online bookstore, "fully understanding that it might not work". Since then he has competed ruthlessly, pouring investment into reducing delivery times for his online retailing company and expanding into a cloud computing business. Documents released by congressional investigators appeared to show how Amazon executives hatched aggressive strategies to price out, and then buy up, competitors.

For years, Bezos convinced investors to forgo profits in favour of long-term investments in logistics, robotics and last-mile delivery. That has paid off in the pandemic, as locked-down shoppers drove sales up 40 per cent year on year. On Thursday, Amazon revealed record quarterly profits of $5.2bn, despite $4bn in costs related to coronavirus. Its share price has risen around 70 per cent since the start of the year.

Losing the goodwill of powerful figures in Washington is the biggest threat to Bezos's plans, not just for Amazon but also his separate space exploration group, Blue Origin. Politicians on both sides of the aisle appear ready to take action on competition concerns. In his first ever congressional appearance, the Amazon chief seemed less poised than the other Big Tech bosses and ill-prepared to parry claims that the company might be misusing the data of independent merchants or deliberately promoting counterfeit goods to generate advertising sales.

But Amazon has been shelling out more than ever on lobbying — $8.7m so far this year. It also hired Jay Carney, former press secretary to President Barack Obama, as head of global corporate affairs, who brought a more combative style to press efforts on cable news and Twitter.

Bezos is also personally involved. His 2013 purchase of the Washington Post, gave him "a front-row seat beside some of the most wise and seasoned DC observers," says Juleanna Glover, a former Republican strategist and corporate lobbyist who does not work for him. "I don't really think Bezos is playing the typical DC game  . . .  I don't see him trying to spin up dirt on competitors via the usual nonsense. Seems to me like he's growing his own presence in DC primarily because his businesses demand he be here," she adds.

Owning the Post is a "complexifier", Bezos has admitted, drawing unwelcome attention from opponents of its journalism. In 1993 he married Mackenzie Tuttle and the couple have four children. Their divorce last year was billed as the biggest settlement of its kind. She walked away with $38bn in Amazon stock but left voting rights with her ex-husband. Four months after they announced the end of their marriage, the National Enquirer ran stories containing details, including text messages, of Bezos's affair with TV personality Lauren Sanchez.

Investigators commissioned by Mr Bezos blamed Saudi Arabia, suggesting it had hacked the messages and sent them to the Enquirer in retaliation for the Post's coverage of its murdered columnist, Jamal Khashoggi. The Saudi government dismissed the claims as "absurd".

President Donald Trump, meanwhile, routinely argues that the "Amazon Washington Post" treats him unfairly. After Amazon lost a cloud computing contract to Microsoft, it accused the Pentagon of allowing Mr Trump's dislike of the company to influence the process. The decision is on appeal.

Mr Bezos may be stepping up his charm offensive in Washington, but he seems to be having trouble getting his message across. At Wednesday's hearing, which was plagued by technical glitches, one member of the committee had to nudge him: "Mr Bezos, I believe you're on mute."

© Financial Times