Date: January 4, 2019
In Case You Missed It!
Thanks to HQ2, Amazon now has a database of private information about U.S. cities
As a result of the HQ2 bidding process, Amazon knows when, where and how communities plan to invest — giving it even more of a competitive edge.
Robert B. Engel
Dallas Morning News
January 4, 2019
Amazon was promised nearly $5 billion in taxpayer incentives from HQ2-sweepstakes winners New York City and Northern Virginia — corporate welfare that has been condemned by both progressives and conservatives.
But less attention has been paid to the troves of rarely public data Amazon received from Dallas and the 235 other losers of the yearlong competition, data on everything from economic development projects and infrastructure investments to population projections and anticipated employment trends. In fact, as reported by the New York Times, almost no attention has been paid to the secret set of follow-up questions Amazon posed to the 20 HQ2 finalist cities. Only a few location’s answers have been made public.
Amazon having this enormous database is a threat to businesses big and small across the country that do not readily have access to the same information. Dallas lawmakers should call for this data to be made widely available — not merely in a PDF addressed to Amazon — for all businesses so that those operating in or wanting to locate to Dallas can compete fairly against Amazon. This public disclosure should include the secret answers to Amazon’s follow-up questions. Lawmakers should also pledge to ensure that Amazon doesn’t use this information to stamp out its competition.
Amazon fielded bids from 238 municipalities in total, and many of those bids offered economic development plans; transportation information and infrastructure planning; labor and wage rate information; housing capacity; crime rates; and energy costs. Having this data on hand, Amazon now has a systematic advantage the other businesses wanting to operate or locate in Dallas do not have.
While most of Dallas’ HQ2 bid is still under lock and key, there is little doubt that Dallas walked into the same trap so many others did. Las Vegas submitted a 142-page proposal that provides a color-coded map of a new planned transportation corridor between Las Vegas and Phoenix. San Francisco put together a 160-page proposal that details housing development plans and presents a chart with a neighborhood-by-neighborhood breakdown. Wisconsin’s bid included a profile of the burgeoning Capitol East District that describes facilities under construction. In Toledo’s bid, there was a “Supplemental Materials” section with a full mark-up of a planned shopping complex — including which buildings certain companies will occupy.
A critical question is what Dallas told Amazon in secret answers responding to the follow-up questions sent to all HQ2 finalists. The follow-up answers for New York have come to light, and even in that case, the city acted as though they had something to hide. After the document was briefly made available online, it was abruptly taken down — a city spokesperson said, according to The New York Times, it contained proprietary information. What propriety information did Dallas’ secret answers include?
Holly Sullivan, Amazon’s head of economic development, said in a company press release that the HQ2 bidding process gave them insight into the future economic plans of the 238 communities that submitted bids. “Through this process, we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation,” she said. Was this what prompted Amazon to launch a bidding war in the first place? Amazon sent an extensive set of questions to all of the finalists.
Amazon’s competitors that have long warned of the company’s anticompetitive business practices now have to contend with a $1 trillion company that knows the ins-and-outs of their local economies. Stacy Mitchell, a director of the Institute for Local Self-Reliance, quoted in Business Insider, said that a “godlike” view of local economies might be “the most valuable thing that Amazon has gotten out of this.” And Public Source quoted the executive director of national economic policy center Good Jobs First, Greg LeRoy, raising the question of what Amazon will do with this trove of data, saying “it’s counterintuitive that they wouldn’t try to monetize it somehow.”
The impact on Dallas businesses and local economies across the country could be devastating. Amazon has already expanded its shipping and distribution network in recent years and gained an unprecedented competitive edge by raking in public subsidies. This has crushed independent retailers. In an Institute for Local Self-Reliance survey, 90 percent of independent retailers said Amazon is having a negative impact on their revenue. Amazon is even striking deals with local governments to supply school materials, in some cases, according to the Washington Post, undercutting local suppliers.
Now, as a result of the HQ2 bidding process, Amazon knows when, where and how communities plan to invest — giving it even more of a competitive edge.
We recommend Dallas officials immediately release all HQ2 bid information, including the secret answers to Amazon’s follow-up questions, so that Dallas businesses can compete on a level playing field.
Robert B. Engel is a member and chief spokesperson for the Free and Fair Markets Initiative, and he is a retired chief executive of CoBank.
To access the full op-ed, click here.
ABOUT THE FREE & FAIR MARKETS INITIATIVE
The Free & Fair Markets Initiative (FFMI) is a non-profit coalition of businesses, consumer advocacy groups, workers and community activists committed to scrutinizing and highlighting emerging market trends that are stifling competition and innovation, influencing federal and local government spending, putting consumer data in harm’s way and limiting consumer choice. For a list of members, please visit https://freeandfairmarketsinitiative.org/about-us/members/. For more information on the Free & Fair Markets Initiative, please visit https://freeandfairmarketsinitiative.org