Following the concerns by some groups over Amazon’s acquisition of Whole Foods, US regulators will have to review Amazon’s Whole Foods acquisition worth $13.7bn (£10.5bn). Democrats have pointed out the possible effects of the deal on consumer choice. As such, they have called upon the authorities to consider the consequences of the deal on places with lesser shopping options.
In June, Whole Foods stated that it hopes to close the deal during the second half of 2017, but it has cautioned investors that the deal may extend to May 2018. Likewise, many suggest a possible scenario where the deal goes beyond May 2018.
While analysts point to the possible benefits of lower prices and delivery ideas to the consumers, they deny the fact that the company would be faced with competition from many strong firms like Walmart, Target and other well-established companies.
However, the proposed merger has increased fears that the aftermath of the consolidation in various US industries including banking, airlines, and telecommunications.
Amazon’s anti-trust deals
Democrats have voiced the anti-trust concerns of the economic agenda. And President Trump spoke about Amazon, saying it has an enormous anti-trust problem. Amazon plans to make another submission of paperwork to the Federal Trade Commission this week, fixing a new date for a primary review of the deal by the government. This was disclosed in a filing by the Whole Foods with the Securities and Exchange Commission on Friday.
As analysts envisage the effects of Amazon’s venture into the supermarket sector, the news sent showed prices at other supermarkets submerging. The industry has undergone consolidation with the closure of smaller shops and pronounced bankruptcies.
David Cicilline, a Democratic Rep called on Congress earlier this month to stage hearings and make investigations over the deal. Cicilline said that Democrats raised vital questions about the competition policy.
Deal may not go through smoothly
A set of Democrats headed by Marcia Fudge of Ohio wrote to the Department of Justice and the Federal Trade Commission telling the body to scrutinize the deal beyond the standard antitrust review method that hones its focus on the competitive impact.
The Federal Trade Commission and the Department of Justice are in charge of the investigation over the transaction. The Democrats said they are not against the merger but are concerned about the effects of such merger on African American groups across the country already under the problems of getting healthy food from grocers.
Likewise, a consumer guard dog, Consumer Watchdog told the authorities to halt the deal pending the Amazon’s change of its products listings, as they mislead buyers with their discounts.
While Reuters reported that the administration would put Consumer Watchdog’s idea into consideration, Amazon debunks the claim by Consumer Watchdog. In addition to Democrats and Consumer Watchdog’s idea, three shareholders of Whole Foods have filed suits against the proposed merger, saying that such act devalues the company.