Amazon's foray into the grocery industry with the acquisition of Whole Foods for $14 billion had raised quite a few eyebrows for a variety of reasons. Critics had raised concerns that the acquisition will prove to be hard for workers and also have a toll on innovation. Yesterday, David Cillicine raised the stakes by stating that the Deal should be thoroughly scrutinized in order to make sure that the consumers do not end up getting a raw deal.
Challenge for Amazon
The concerns raised by David Cillicine, a Democrat member of the subcommittee involved with regulatory reform commercial and antitrust law, in a letter should prove to be a big cause for concern for Amazon.
The letter stated that considering Amazon's dominant position in the online retail industry could spill into the grocery retail industry and eventually lead to the death of competition. In a nutshell, Cillicine believes that Amazon's acquisition of Whole Foods could prove to be unfair for other companies which operate in the same industry.
Cillicine further stated that Amazon's acquisition of Whole Foods has taken place at a time when economic power is getting concentrated in a few hands and as such, it will further hamper workers' wages as well as their ability to choose between employers. He went on to add that the ‘fruit of economic growth' will end up in just a few hands and create monopolies.
Widespread concerns
In a statement released on Thursday, Cillicine said: “Congress has a responsibility to fully scrutinize this merger before it goes ahead. Failing to do so is a disservice to our constituents.” However, in this regard, it is important to point out that concerns about Amazon's acquisition of Whole Foods have been raised by plenty of critics and some lawmakers as well.
Ro Khanna, a Republican member of Congress had also criticized the deal and stated that Amazon's latest acquisition will hurt the businesses of local grocery stores.
Although the deal has been announced with much fanfare, it is yet to be completed and that will happen once federal regulators grant the necessary regulatory permissions.
It is assumed that the Federal Trade Commission will grant those permissions. Amazon's predatory pricing practices is another factor that might be an issue that could land them in trouble with antitrust regulators. Following the statement by David Cillicine, Amazon refused to make any comment regarding the developments.
