Regulators Should Block Amazon’s Acquisition Of Whole Foods
Above Photo: Oli Scarff/Getty Images
Deal Raises Significant Anti-Competitive Concerns
In response to Amazon’s announced acquisition of Whole Foods, Stacy Mitchell, co-director of the Institute for Local Self-Reliance (ILSR) and co-author of Amazon’s Stranglehold, made the following statement:
“Amazon’s acquisition of Whole Foods raises significant anti-competitive issues that should be deeply concerning to federal antitrust regulators and the public. This deal would allow Amazon to leverage Whole Foods’ 444 U.S. stores in ways that would dramatically amplify Amazon’s online market power, by integrating these locations into its vast logistics and delivery network. And it would give Amazon, which already sells more clothing, books, toys, and consumer electronics than any other retailer, a substantial share of an even bigger consumer goods category, groceries. Regulators should block this acquisition.”
ILSR’s recent report Amazon’s Stranglehold traced Amazon’s rapidly expanding reach and its impacts. The report found:
- Amazon is rapidly monopolizing online retail — Today 55% of all online shopping searches start directly on Amazon. Amazon captured 46% of the nearly $400 billion that Americans spent online last year. That’s up from 30% of online sales just three years ago.
- Both Prime and Echo are strategies for locking in consumers and ensuring they don’t shop anywhere else — Half of all U.S. households are subscribed to Prime, and belonging to Prime dramatically decreases comparison shopping. Fewer than 1 percent of Prime members visit competing retail sites while shopping on Amazon.
- Amazon already leads in several major consumer categories — Amazon sells more books and toys than any retailer, online or off, and is on track to become the leading seller of apparel and consumer electronics this year.
- Amazon’s building a vast logistics network to control package delivery — In the last year, Amazon doubled the number of warehouse facilities in its U.S. distribution network, and is building a delivery system that can challenge UPS and FedEx.