The news at a glance

Retail: Amazon shifts tactics on sales taxes

Tax-free shopping on the Internet may soon come to an end, said Monica Langley in The Wall Street Journal. Republican governors in budget-strapped states, eager for revenue, are joining their Democratic colleagues by dropping their longtime opposition to collecting sales taxes on online purchases. Under pressure, Amazon, which has long relied on a 1992 court ruling that online companies don’t have to collect sales taxes if they lack a physical presence in the customer’s state, is now collecting taxes in six states, and by January 2014 will start doing so in seven more, including New Jersey, Indiana, and Virginia.

The irony is that Amazon’s capitulation on taxes could be the death knell for its offline retail rivals, said Barney Jopson in the Financial Times. The company is expanding its network of warehouses to states where it collects sales taxes, and plans to soon offer same-day delivery to millions of consumers. “If Amazon can deliver to work or home in three or four hours—and at little or no shipping cost to the consumer—then why bother with the store?” An Amazon promise of same-day delivery is “a major fear,” said New Jersey bookstore owner Rita Maggio. “I’m afraid we’ll never get back what we lost.”

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Media: NBC, Microsoft go their separate ways

After 16 years together, NBC and Microsoft agreed to an amicable Web divorce last week, said Brian Stelter in The New York Times. Visitors to MSNBC.com, the companies’ joint online-news venture, are now redirected to NBCNews.com. Early next year, MSNBC.com will be relaunched as a dedicated site for the liberal cable news channel of the same name. Comcast, NBC’s parent company, paid Microsoft roughly $300 million for the breakup, which gives Microsoft a freer hand in further developing its own news service, MSN.com.

Banking: JPMorgan’s losses widen

The losses from JPMorgan Chase’s trading debacle continue to mount, said Andrew Tangel in the Los Angeles Times. The bank announced last week that it had lost $5.8 billion as a result of its botched trades on risky credit derivatives, far more than the initial $2 billion estimate. Losses could total $7.5 billion. The bank also said that some of its traders may have tried to hide the full extent of their bad bets, and that several former employees will have to return up to two years of past pay.

Credit cards: In settlement, the threat of new fees

Consumers may soon pay extra for using their credit cards, said Karen Weise in Bloomberg Businessweek. Visa, MasterCard, and several major banks, including Bank of America, agreed to a $7.25 billion settlement last week over allegations that they conspired to fix prices for processing credit card payments. As part of the settlement, merchants will be allowed to charge a fee to customers who pay with credit. Merchants say the credit card networks charge them too much for processing transactions, and that the threat of the new surcharge gives them leverage to bring those costs down.

Economy: Bernanke predicts ‘slow’ jobs growth

Federal Reserve Chairman Ben Bernanke offered lawmakers few new clues this week about whether a fresh round of stimulus is coming, said Pedro da Costa and Mark Felsenthal in Reuters.com. Bernanke told a congressional committee that a reduction in the 8.2 percent unemployment rate “seems likely to be frustratingly slow,” and that the Fed is committed to helping the recovery if necessary. But he gave no indication of what that might involve. The best way for Congress to help the economy, he said, is “to work to address the nation’s fiscal challenges.”