U.S. Congressman Calls For Hearings On Amazon's Whole Foods Bid
Congress should hold hearings to consider the potential effects of Amazon.com Inc.’s proposed purchase of Whole Food Markets Inc., a Democrat lawmaker from Rhode Island said.
“Amazon’s proposed acquisition of Whole Foods raises important questions concerning competition policy, such as how the transaction will affect the future of retail grocery stores, whether platform dominance impedes innovation, and if the antitrust laws are working effectively to ensure economic opportunity, choice and low prices for American families,” U.S. Representative David Cicilline wrote in a letter to the chairman of the House Judiciary Committee requesting the hearings.
Cicilline said the acquisition is part of a wave of consolidation that has “decreased wages and resulted in gross inequality in the workplace.”
Completing The Deal
Amazon’s agreement to buy the grocery retailer for $13.7 billion is expected to be completed later this year. Whole Foods would be the biggest acquisition in the e-commerce giant’s history and represents a dramatic shift in its business model from selling items online to luring shoppers into stores.
Analysts have largely dismissed any antitrust entanglements associated with the deal because Whole Foods had just 1.6 percent of the U.S. grocery market, according to Euromonitor, and is dwarfed by operators such as Wal-Mart Stores Inc., which has more than 26 percent of the market and Kroger Co. with 10 percent.
Cicilline’s call for hearings is the latest example of concerns about Seattle-based Amazon’s fast growth in a broad range of products, from books to electronics to toys to power tools, and the influence it wields in the market.
“I have heard concerns that the combination of Amazon’s competitive advantages in terms of size, consumer reach and ability to absorb losses may discourage innovation and entrance into emerging markets, such as grocery and food delivery,” Cicilline wrote.
Amazon and Whole Foods declined to comment.