FILE PHOTO: The logo of Amazon is seen at the company logistics centre in Boves, France, January 19, 2019. REUTERS/Pascal Rossignol/File Photo
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Another week, another Amazon acquisition. WiFi start-up Eero should help with the company’s plan to fill homes with connected gadgets. But smart speakers and doorbell cameras are one thing. The possibility of Amazon monitoring online browsing more closely may be less popular.

Chief executive Jeff Bezos knows the value of digital privacy. Eero says it has no interest in tracking online use. Still, start-ups have a habit of misjudging the ambitions of acquirers. Think of Whatsapp’s bewilderment that Facebook wanted to introduce targeted adverts. Website snooping may not even be necessary. Amazon could use Eero data to track smart-home device use as it expands in hardware.

This is just the sort of scheme sure to rile antitrust campaigners. Amazon is already being investigated for anti-competitive behaviour in Europe. If breaking up a homegrown success story proves unpalatable to politicians there may be appetite to limit ways in which Amazon uses data to give its own products and services a market edge.

For now, antitrust risk is not reflected in Amazon’s share price. The company trades at 60 times expected earnings — more than Alphabet, Facebook and Apple. Potential growth in advertising and cloud computing outweighs the fear of regulators.

High-margin revenue contributed to free cash flow of just over $19bn in 2018 — more than double 2017. Ignore any suggestion that this will translate to Amazon finally paying out a dividend. With close to half a million shares trading at $1,638, the entire pot would provide a fairly unimpressive dividend yield of some 2 per cent.

For now, acquisitions like Eero show that money is still being ploughed back into the business. This means annual capital expenditure has more than tripled in five years, exceeding $13bn in 2018. Amazon expects to spend even more this year. The only stumbling block is political pushback. No one knows how much data tech giants can collect before governments intervene. Eero could help provide the answer.

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