Congressman David Cicilline (D-R.I.), the top Democrat on the House Judiciary Antitrust Subcommittee, has called for a hearing on Amazon’s proposed $13.7 billion acquisition of Whole Foods.
The merger, announced earlier this month, “could increase costs and decrease wages for Americans as a result of decreased competition in the marketplace,” Cicilline warns. “Competition is essential for a healthy economy. Congress has a responsibility to fully scrutinize this merger before it goes ahead. Failing to do so is a disservice to our constituents.”
Cicilline wrote to request that the Subcommittee on Regulatory Reform, Commercial and Antitrust Law hold an oversight hearing on the proposed acquisition.
“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,” he wrote. “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.
Amazon accounts for more than half of online food orders through its Fresh, Prime and Prime Now services. “Because of this existing footprint, the announcement of the proposed transaction has already affected this market,” he wrote. “For example, in the grocery delivery market, another prominent food company’s value [Blue Apron] was reduced by a third following the announcement of the transaction.”
Amazon’s proposed acquisition of Whole Foods may also threaten traditional retail grocers, including Walmart, Kroger, Costco and Target, Cicilline suggested. Some have also raised concerns that the transaction “will also increase Amazon’s online dominance, enabling it to prioritize its products and services over competitors.”
“Although the role of employment and inequality in antitrust enforcement has declined in recent decades, the subcommittee should have an active oversight role in determining whether this trend serves the public interest, is faithful to the legislative intent of the antitrust laws, or whether additional enforcement is warranted to reverse the harmful effects of consolidation on workers and labor inequality,” Cicilline concluded.