Amazon Could Be Facing Anti-Trust Hearing Over Whole Foods Deal
A Democratic congressional representative has raised concerns about the nature of Amazon's plans to purchase Whole Foods.
U.S. Representative David Cicilline, who serves on the House of Representatives antitrust subcommittee, has requested a formal hearing into the Amazon's purchase of Whole Foods.
Impact On The Grocery Industry
"Amazon's proposed purchase of Whole Foods could impact neighborhood grocery stores and hard-working consumers across America," Cicilline said in a statement. "Congress has a responsibility to fully scrutinize this merger before it goes ahead."
The deal's approval will most likely be overseen by the Federal Trade Commission. The House of Representatives has no direct control over the FTC's decision, but a hearing could be used to send a message about the impact this deal could have on consumers and the grocery industry. Amazon has not announced its plans for Whole Foods, but many industry analysts predicted that it could change the landscape of the grocery industry.
Amazon's Plans For Whole Foods
Amazon already provides home delivery service to customers in select areas by way of its Amazon Fresh program. Given the limited scope of Amazon Fresh, it hasn't made much of an impact on the market. However, the company's purchase of Whole Foods would give it access to a much larger consumer base than it currently has through Fresh.
Most industry experts expect that the deal will be approved, but some voices have spoken out against it due to fears that it could give Amazon too much power in the industry. We don't know what Amazon plans for Whole Foods, but it could use it as means to expand its grocery delivery service to more rural areas. Currently, Fresh is found in urban areas.
Douglas Kass, of Seabreeze Partners Management, has said that he is wary of the impact this could have on the Amazon deal.
"I am shorting Amazon today because I have learned that there are currently early discussions and due diligence being considered in the legislative chambers in Washington, D.C.," he wrote in an investor's note.
In his letter, Kass went on to warn that this deal's distribution could cause Amazon's stock to fall by as much as 10 percent.
News of the deal saw the value of Amazon's stock soar. In fact, the value of it stock following the deal actually made it so that Amazon paid virtually nothing for Whole Foods.
Eric Brackett Tech Times editor Eric Brackett is a tech junkie and a gamer, covering science and technology. Follow him on Facebook and Twitter for updates and his random thoughts on the latest trends in gaming, tech, and comic books.