David Cicilline, the top Democrat on the House of Representatives Judiciary Committee’s antitrust panel, has advised the subcommittee to hold a hearing regarding Amazon’s (NASDAQ:$AMZN) plans to purchase Whole Foods Market Inc (NASDAQ:$WFM).
Cicilline first proposed the hearing on July 14 in a letter to the chair of the House Judiciary Committee as well as the subcommittee chairman. It’s worth noting that in a mid-morning trading session on Friday Amazon’s shares were down 0.2%.
What does the Amazon ‘s Whole Foods deal mean?
The $13.7 billion Amazon-Whole Foods deal was announced last month. It is thought that it will help Amazon make the transition into the grocery and brick-and-mortar retail sector. However, Cicilline has a different opinion. “Amazon’s proposed purchase of Whole Foods could impact neighborhood grocery stores and hard-working consumers across America,” Cicilline said. “Congress has a responsibility to fully scrutinize this merger before it goes ahead.”
For the deal to go ahead, it has to be approved by U.S. antitrust enforcers, in this case, it will most likely be the Federal Trade Commission. While Congress does not have a role in the process, hearings do help to highlight the potential impact of deals on consumers.
It’s not just Cicilline that worries about Amazon’s impact. Also this week, Douglas Kass of Seabreeze Partners Management Inc announced that he was shorting shares of Amazon due to concerns about the retailer in Washington. According to Kass, he heard talk on Capitol Hill regarding concern about Amazon’s size and influence.
“I am shorting Amazon today because I have learned that there are currently early discussions and due diligence being considered in the legislative chambers in Washington,” Kass wrote in a letter to clients on Wednesday. “If I am correct, word of this could lower Amazon’s shares by 10% overnight.”
Amazon has declined to comment on the issue.
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