WASHINGTON – U.S. Rep. David N. Cicilline (D-RI), the top Democrat on the House Judiciary Antitrust Subcommittee, called for a hearing on Amazon’s proposed $13.7 billion acquisition of Whole Foods.
Per a press release, Cicilline suggests that the proposed merger could increase costs and decrease wages for Americans as a result of decreased competition in the marketplace.
“Competition is essential for a healthy economy. That’s true across the board. Amazon’s proposed purchase of Whole Foods could impact neighborhood grocery stores and hardworking consumers across America,” said Cicilline. “Congress has a responsibility to fully scrutinize this merger before it goes ahead. Failing to do so is a disservice to our constituents.”
Cicilline wrote on July 14 to Judiciary Committee Chairman Bob Goodlatte (R-VA), and Regulatory Reform, Commercial and Antitrust Law Subcommittee Chairman Tom Marino (R-PA), that Amazon’s proposed acquisition of Whole Foods “raises important questions concerning competition policy, such as how the transaction will affect the future of retail grocery stores, whether platform dominance impedes innovation, and if the antitrust laws are working effectively to ensure economic opportunity, choice, and low prices for American families.”
The Atlantic reports that U.S. Rep. Ro Khanna (D-CA), who represents a large portion of Silicon Valley, said that the Amazon-Whole Foods deal shows why the government should think differently about mergers. “This as a case study for how we think about antitrust policy,” he said. “It’s the particulars here.”
Khanna cited concerns about the impact the merger could have on local grocers, adding they already face plenty of pressure from larger retailers like Walmart and Target. “And that is something in my district: For example, you have Felipe’s Produce in Sunnyvale and Cupertino. These local groceries have already faced so much pressure … for many immigrant families, grocers are the route into the middle class and the path to wealth creation,” he told the news source.
Meanwhile, Produce Retailer reported that Robert Riegel, a Whole Foods shareholder, filed a lawsuit last week in the U.S. District Court for the Western District of Texas to block the company’s sale to Amazon. The suit claims that the deal undervalues Whole Foods and lacks sufficient transparency, and that the proxy statement filed July 7 by Whole Foods is misleading. According to the suit:
“The proxy statement states that, in connection with negotiating the merger agreement, Amazon had preliminary discussions with certain Whole Foods executive officers regarding Amazon’s desire to retain such officers following the closing. However, the proxy fails to disclose the timing and nature of all communications regarding the future employment and/or benefits relating to Whole Foods management.”
Amazon announced it would acquire Whole Foods for $13.7 billion in mid-June.