On Monday, after a speedy approval process, Amazon took control of supermarket chain Whole Foods. Now, at least one elected official is questioning the seeming lack of scrutiny applied to the deal.
On Aug. 23, Bruce Hoffman, acting director of the Federal Trade Commission’s Bureau of Competition, issued the following statement: “The FTC conducted an investigation of this proposed acquisition to determine whether it substantially lessened competition under Section 7 of the Clayton Act, or constituted an unfair method of competition under Section 5 of the FTC Act. Based on our investigation we have decided not to pursue this matter further”
“Of course, the FTC always has the ability to investigate anticompetitive conduct should such action be warranted,” Hoffman added.
Sen. Amy Klobuchar (D-Minn.) questioned the scope and speed of the FTC’s review and approval.
“As Ranking Member of the Antitrust Subcommittee, I am concerned about the Federal Trade Commission's decision not to fully review Amazon's acquisition of Whole Foods,” she says. “Amazon's increased access to data on consumers and their behavior, and its dominance in internet retail sales, raises questions about whether this merger harms consumers and suppresses competition.
“Examining such complicated issues is the FTC's primary responsibility and I will be calling on the FTC to provide an explanation for why they made such a quick decision regarding this merger,” Klobuchar added.
In July, shortly after the proposed merger was announced, Rep. David Cicilline (D-R.I.), the top Democrat on the House Judiciary Antitrust Subcommittee, scrutinized the $13.7 billion deal.
The merger, he fretted, “could increase costs and decrease wages for Americans as a result of decreased competition in the marketplace.”
“Without taking a position on the legality of the transaction under the antitrust laws, 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,” Cicilline said at the time. “While several leading antitrust scholars have expressed doubt that the transaction will result in higher prices for consumers, it nevertheless occurs amidst waves of consolidation in recent decades that have decreased wages and resulted in gross inequality in the workplace.”
“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,” he added.