A month after Amazon and Whole Foods announced they would be joining forces in wedded grocery bliss, one lawmaker is asking his colleagues on a House antitrust panel to hold a hearing on the $13 billion merger plan.
U.S. Representative David Cicilline, the top Democrat on the House of Representatives Judiciary Committee’s antitrust panel, sent a letter [PDF] to the chairman of the Committee on the Judiciary and the chairman of the antitrust subcommittee, urging them to hold a hearing to consider whether the merger will harm consumers, workers, and small businesses.
He cites 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 notes that Amazon accounts for more than half of online food orders. Because of this existing footprint, the news of the deal has already impacted the market, he says.
“For example, in the grocery delivery market, another prominent food company’s value was reduced by a third following the announcement of the transaction,” he writes.
It’s worth noting that while Whole Foods currently has about a 2 percent share of the U.S. grocery market — and Amazon less than that — Walmart currently has more than 20 percent.
“Amazon’s proposed purchase of Whole Foods could impact neighborhood grocery stores and hardworking consumers across America,” Cicilline said in a statement, noting that competition is “essential for a vital economy.”
Beyond the grocery business, Cicilline writes that others have raised concerns that the deal will increase Amazon’s online dominance overall, “enabling it to prioritize its products and services over competitors.”
On the other hand, “several leading antitrust law scholars have suggested that the transaction appears unlikely to injure competition or consumers,” Cicilline acknowledges.
In any event, he wants Congress to take a long, hard look at the deal ahead of its completion.
“Congress has a responsibility to fully scrutinize this merger before it goes ahead,” he writes.
Source: Consumer Reviews