Congressman Calls for Antitrust Hearing on Amazon’s Whole Foods Purchase

Congressman David Cicilline (D-RI), the ranking Democrat on the House Judiciary Antitrust Subcommittee, is calling for a hearing on Amazon’s proposed $13.7 billion acquisition of Whole Foods.

“Competition is essential for a healthy economy,” Rep. Cicilline said in a statement. “That’s true across the board. Amazon’s proposed purchase of Whole Foods could impact neighborhood grocery stores and hardworking consumers across America. Congress has a responsibility to fully scrutinize this merger before it goes ahead. Failing to do so is a disservice to our constituents.”

In a letter to House Judiciary Committee Chairman Robert Goodlatte (R-VA) and House Antitrust Subcommittee Chairman Thomas Marino (R-PA), Cicilline stressed that Amazon’s proposed acquisition of Whole Foods raised important questions concerning competition policy, including whether “antitrust laws are working effectively to ensure economic opportunity, choice, and low prices for American families.”

Waves of consolidation in the recent decade have led to lower wages and inequality in the workplace, he continued. “In light of these questions, I respectfully urge that the Subcommittee hold a hearing on this proposed acquisition to carefully consider whether it will harm consumers, workers, and small businesses in our communities,” Cicilline wrote. “It is essential that Americans have meaningful choice about the products we buy, the businesses we support, and where and how we work.”

Among booksellers, the negative effects of Amazon’s dominance are well known. Amazon has as large a market share in the entire book business as Standard Oil did in 1911, right before it was broken up into 34 companies. Amazon controls approximately 75 percent of online sales of physical books, more than 65 percent of e-book sales, more than 40 percent of new book sales, and about 85 percent of sales of self-published e-book authors.

To garner support for an antitrust investigation into Amazon’s business practices and their impact on the book industry, the American Booksellers Association launched an Antitrust Action Kit, providing booksellers with template letters they can adapt to urge their state and federal officials to investigate Amazon for antitrust violations in the book industry.

A report released in late 2016 by the Institute for Local Self-Reliance, Amazon’s Stranglehold: How the Company’s Tightening Grip Is Stifling Competition, Eroding Jobs, and Threatening Communities, reported that Amazon’s growth raises serious antitrust questions, at least.

“Amazon increasingly controls the underlying infrastructure of the economy,” the report notes, including its Marketplace for third-party sellers, a dominant platform for digital commerce; its Web Services division, which has the largest market share for cloud computing services; and its own distribution network, which includes warehouses and, increasingly, shipping and package delivery. “By controlling this critical infrastructure, Amazon both competes with other companies and sets the terms by which these same rivals can reach the market.”