Hearing sought to air Amazon-Whole Foods antitrust issues
A congressman has called for a hearing to look into potential antitrust issues in the Amazon-Whole Foods deal.
A congressman, concerned about potential antitrust and competition in the Amazon-Whole Foods deal, wants the House to hold a hearing on the issue.
U.S. Rep.David Cicilline, D-R.I.. has written to Rep. Bob Goodlatte, R-Va., who is Judiciary Committee chairman; and Tom Marino, R-Pa., chairman of the Subcommittee on Regulatory Reform, Commercial and Antitrust Law, urging them to look into Amazon's bid to buy Whole Foods for $13.7 billion.
"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," Cicilline wrote. Among the issues he cites are how the transaction will affect the future of retail grocery stores, whether it will impede innovation and if the antitrust laws are working effectively.
Forty-three percent of all online U.S. retail sales in 2016 went through Amazon, according to Slice Intelligence, a digital commerce research firm.
Hedge fund manager Douglas Kass, the president of Seabreeze Partners Management, has written that he's shorting Amazon shares out of concern about what's brewing in Washington.
Cicilline is the ranking Democrat on the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law.
"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 wrote.
His other worries include lower wages for workers and technology displacing workers.
But Cicilline also cites two antitrust scholars who said there's no problem with the Amazon acquisition.
Amazon could not immediately reached for comment.
On June 16, the day the bid was announced, a company spokesperson said it didn't expect the deal to lead to automation causing layoffs.
GlobalData Retail's analysis finds Whole Foods has only 1.2% of the grocery market and Amazon, less than 1%. In contrast, Walmart has 14% and Kroger, 7%.
Amazon's share is bigger when looking at only online grocery sales, a small chunk of the overall grocery market. Amazon's piece jumps to roughly 20%, according to Slice Intelligence.
Maurice Stucke, a University of Tennessee law professor, questioned whether the Whole Foods acquisition would increase Amazon's clout in the marketplace and stifle competition.
"Antitrust laws are built on the deconcentration of power," he said. "The United States historically has been suspect of concentrated economic power, just as it’s suspect of concentrated political power."
Follow USA TODAY reporter Zlati Meyer on Twitter: @ZlatiMeyer
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