FTC Approves Amazon’s $13.7 Billion Whole Foods Acquisition: Critics Worry Over Antitrust Issues
Amazon can breathe a sigh of relief after clearing two of the biggest hurdles in its acquisition of Whole Foods on Wednesday, Aug. 23. Both the U.S. Federal Trade Commission and the grocery chain's shareholders have approved the purchase.
The FTC said in a statement it would not pursue investigation over concerns about the deal potentially lessening competition.
Critics Disappointed After FTC Approves Amazon-Whole Foods Merger
Long before this development, critics have spoken a great deal about the Amazon and Whole Foods merger, with some saying it would violate antitrust laws, which are there to keep an open marketplace and prevent companies from restraining trade or monopolizing an industry.
In July a Democratic lawmaker pushed for a more thorough review of the acquisition.
The FTC approved the sale within a 30-day review period without an in-depth investigation after it determined the purchase would not hurt competition.
"Based on our investigation we have decided not to pursue this matter further. Of course, the FTC always has the ability to investigate anticompetitive conduct should such action be warranted," the FTC said.
The FTC allowed Amazon to pursue the sale because the company and Whole Foods aren't close competitors, and that shoppers will have several alternatives to buy their groceries from, according to antitrust lawyer Norm Armstrong.
'Huge Antitrust Problem'
President Donald Trump has previously criticized Amazon and its CEO, Jeff Bezos. In July, Trump said Amazon has a "no-tax monopoly" and told Fox News in 2016 that Bezos has a "huge antitrust problem."
"Amazon is doing great damage to tax paying retailers. Towns, cities and states throughout the U.S. are being hurt — many jobs being lost!" Trump tweeted.
Amazon Whole Foods Acquisition: What Happens Next
Amazon is expected to close the merger by the end of this year. The purchase lends Amazon significant foothold in the brick-and-mortar business, which could expand its online shopping dominance even further. According to The New York Times, the deal also gives Amazon over 465 physical stores around the country.
Despite criticisms over the deal, analysts expected it to push through. However, that didn't stop detractors from arguing that the government could attempt to block the merger since Amazon might use it as a way to dominate a new market with its retail and supply chain power.
All told, Whole Foods would become Amazon's biggest purchase to date, eclipsing its $1.2 billion Zappos buyout. Buying Whole Foods represents a landmark shift in the way Amazon will do business in the future, evolving from ecommerce to add brick-and-mortar operations.