Amazon’s deal with Whole Foods should be scrutinized by Congress, lawmaker says
A member of the House urges Congress to hold a hearing to discuss the acquisition of whole foods proposed by Amazon from a 14 billion merger that critics say could fix cable innovation and injure workers.
The agreement could affect grocery stores and consumers across the country, said David Cillicine representative (DR.I.), the first MP Democrat in the House subcommittee on regulatory reform, trade and defense right The competition said Thursday in a statement: “Congress has the responsibility to examine this merger before it happens. Failure to do so is a bad service to our constituents.”
In a letter presented to the panel’s Republican leaders, Cillicine focuses on Amazon’s online retail domain and the opportunity for the e-commerce giant to use its control over whole foods unfairly disadvantage other companies.
“This transaction comes during a long period of economic concentration that has already led to lower wages and labor mobility,” said the representative, “allowing essentially a small number of monopolists to accumulate the fruits of economic growth.”
Amazon declined to comment on the matter. Amazon Chief of Staff Jeffrey P. Bezos also owns The Washington Post.
The cillicine is not the only member of Congress to require careful examination of the transaction. Rep. Ro Khanna (D-Calif.), Which is a Silicon Valley district, told CNBC last month that the acquisition would “damage local grocery stores.”
The agreement could have important implications for the future of grocery stores and on-demand delivery services, analysts said.
“This is not what Amazon gets, but what Amazon can do with them is to adjust the distribution,” said James Bailey, an administration professor at George Washington University.
The purchase of Amazon must be approved by federal regulators – probably the Federal Trade Commission – before it can continue.
But competition experts differ on whether the acquisition is expected to generate warning signals. Historically, operations with companies in different industries have obtained a pass, especially if they are prone to driving at lower prices.
Amazon has made competition from market prices and from proven competition willing to suffer financial losses.
Sometimes met with the company in trouble. In 2013, Amazon has settled an antitrust lawsuit filed by publishers, including Harper Collins, Hachette and Penguin, which accused Amazon of pricing eBooks.
However, some consolidation opponents recognize that the Amazon-Whole Foods case may be difficult for regulators to refuse.
As for general industry groceries, Whole Foods only control the single digit percentages of the market – and Amazon, and even less. (Critics of the agreement argue that regulators should consider procurement in the broader context of electronic commerce, not just grocery stores.)
“There are a lot of people scared by the sheer size of Amazon, but it’s not clear to me that there is no harm to direct competition in this transaction,” said Gene Kimmelman, president of consumer group Public Knowledge.