Washington, D.C. — Rep. David Cillicine (D-R.I.), the top Democrat on the House subcommittee on regulatory reform, commercial and antitrust law wrote a letter to the House Judiciary Committee and the subcommittee chairman requesting an oversight hearing on Amazon’s $13.7 billion acquisition of Whole Foods Market. Cillicine voiced concern about Amazon’s size and dominance on grocery retail stores.
“I have heard concerns that the combination of Amazon’s competitive advantage 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 writes. “Amazon accounts for ‘more than half of online food orders through its Fresh, Prime and Prime Now services.’”
While he concedes in the letter that certain anti-trust experts are not concerned by the acquisition, he notes that the transaction is taking place at a time of considerable consolidation that has empowered some firms to pay lower wages because the labor market is less competitive. “In this vein, some have expressed concerns that the proposed acquisition will result in additional consolidation in the retail sector, erode American jobs through increased automation and threaten local communities through diminished economic opportunity for hardworking Americans,” writes Cillicine.
Federal regulators, most likely at the Federal Trade Commission (FTC), must approve the acquisition and while Congress has no formal role in the process, a hearing would publicize the potential impact of the deal on consumers and other businesses. A hearing is unlikely to take place without Republican support, but as the New York Times reports, President Donald Trump, who is responsible for picking FTC members, has made statements prior to his election about Amazon having a “huge antitrust problem,” which can pose a potential threat to the acquisition.