Amazon’s bid to acquire Whole Foods has sparked political concerns and prompted policymakers and legal experts to ask: How big is too big?
Amazon.com, America’s fifth-largest company by market value, is still growing like an adolescent and planting flags in new markets. That is prompting some policymakers and legal experts to ask: How big is too big?
It’s a key issue for an economy being rapidly reshaped by e-commerce, a sector where Amazon and the merchants operating on its platform account for up to a third of all U.S. sales, according to some estimates.
It’s also critical for Seattle, a city that has hitched its wagon to the e-commerce titan, and that once saw another local champion, Microsoft, mired in a lengthy antitrust battle. That fight, over Microsoft keeping a rival internet browser off PCs running Windows, almost led to the split-up of the Redmond software giant.
E-commerce is not Amazon’s only game. It also dominates cloud computing, and it may soon have a significant brick-and-mortar presence, with its pending acquisition of Whole Foods Market. The unexpected $13.7 billion deal announced in June spurred an outcry among critics of the company and some members of Congress who asked the Federal Trade Commission to take a close look at the deal.
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Last month Marc Perrone, president of the United Food and Commercial Workers International Union, which represents grocery workers, wrote to the FTC that Amazon’s proposed takeover of the organic food purveyor “is a competitive threat to our economy that will hurt workers and communities.”
Legal experts say it’s really hard to build an antitrust case against the Whole Foods deal, which would give Amazon just a small percentage of the U.S. grocery market.
Amazon’s budding dominance in other markets, too, is likely to remain unchallenged in the long term, unless the philosophy underlying antitrust regulations changes. In fact, U.S. regulators have sided with Amazon against its rivals’ anti-competitive moves — such as when they charged Apple and top New York publishers with conspiring to raise prices for e-books, a market Amazon dominates.
Under the current U.S. antitrust view, how consumers are treated is the prime factor, not the company’s dominance in a market. To take antitrust action against Amazon, regulators would have to prove that the company somehow harms shoppers —…