After all that, Amazon's Whole Foods deal may be delayed

The number of calls for regulatory review could set the merger back.
 By 
Patrick Kulp
 on 
After all that, Amazon's Whole Foods deal may be delayed
Credit: Scott Olson/Getty Images

It could be a while before your local Whole Foods starts recognizing your Prime membership.

A raft of regulatory questions may delay the $13.7-billion mega-merger between Amazon and the supermarket chain as Democratic lawmakers and government officials raise antitrust concerns.

Whole Foods told its investors in June that the deal was expected to close late this year, but the companies reportedly warned that it could take until May of 2018.

The most recent potential roadblock came last week when the Federal Trade Commission began looking into a complaint claiming that the comparison prices Amazon uses to demonstrate savings to customers are misleading. No formal probe has been launched, but a source said the agency is working fast to meet a deadline in case it decides to take the next step towards one.

That's not the only potential political challenge. David Cicilline, a House Democrat from Rhode Island, has called for a congressional hearing on whether or not the deal violates competition laws meant to prevent any one company from amassing too much market power.

Ohio representative Marcia Fudge led another group of House Democrats in a letter expressing concern to the FTC. The appeal called on the agency to expand the scope of its review beyond consumer impact, which has more or less been the sole focus of American antitrust law as it's been narrowly interpreted for the past 40 years.

"While we do not oppose the merger at this time, we are concerned about what this merger could mean for African-American communities across the country already suffering from a lack of affordable healthy food choices from grocers," the leader read.

Even New Jersey senator Cory Booker, widely seen as friendly towards Silicon Valley and a possible name for the 2020 presidential ticket, signed the letter and told Recode last week that he was wary of Amazon's growing size.

"I am skeptical of this particular merger, highly skeptical of it."

"I am skeptical of this particular merger, highly skeptical of it," Booker said on Recode's Decode podcast. “I worry about grocery consolidation, I worry about the jobs that many of these grocery stores create."

All this comes as Democrats unveil a brand new economic agenda meant to unify progressives and moderate Trump voters under a populist banner. A more aggressive antitrust approach seems to be a central pillar in that package.

But despite all the noise, most leading antitrust experts seem to agree that an antitrust case against the deal is unlikely under the current status quo. It's easy to forget that Whole Foods controls just two percent of the country's grocery market and online grocery as a whole represents just one percent.

Amazon has disputed the basis of the FTC's informal investigation -- a Consumer Watchdog complaint alleging it lied about discount periods. And the company also released its own letter last week in which a spokesperson said the company is making Congress' concerns a priority.

"We have every intention when the acquisition is complete to assist Whole Foods in bringing natural and healthy foods to more people," Brian Huseman, Amazon's vice president of public policy, said in the letter.

Substantiated or not, the growing worry around the merger in Washington will likely waylay the final stamp of approval for longer than the two companies originally anticipated -- even if regulators ultimately decide against blocking it.

Amazon will put forth a revised deadline for the deal in a Securities and Exchange Commission form this week, according to another filing from Whole Foods last week.

Topics Amazon Politics

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Patrick Kulp

Patrick Kulp is a Business Reporter at Mashable. Patrick covers digital advertising, online retail and the future of work. A graduate of UC Santa Barbara with a degree in political science and economics, he previously worked at the Pacific Coast Business Times.

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