Federal Government won't block Amazon from acquiring Whole Foods

Federal Government won't block Amazon from acquiring Whole Foods

Federal Government won't block Amazon from acquiring Whole Foods

Whole Foods shares rose 0.7% in after-hours trading to $41.96, still shy of the deal's $42 per-share price tag.

Some argued the deal could give Amazon too much power over the USA economy and could violate antitrust laws on market competition.

Amazon's purchase of Whole Foods is another step closer to reality, after the Federal Trade Commission decided the grocery deal would not hamper competition or provide an unfair advantage. The acquisition is expected to close in the second half of 2017. Regulators tend to block deals when two direct competitors are combining, and Amazon - despite its dominance in the online marketplace - doesn't now have a big groceries business.

Last month, the top Democrat on the U.S. House of Representatives' antitrust subcommittee voiced concerns about the plan and sought a hearing to look into the deal's impact on consumers.

The review of the deal comes as technology giants like Amazon and Google are drawing greater criticism about their dominance of markets, from e-commerce to online advertising. Trump wrote in a tweet.

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Some critics, however, had argued that the government could attempt to block the merger since Amazon might leverage its retail and supply chain power to dominate a new market.

Amazon and Whole Foods have not given many details about what might change for customers, though Whole Foods CEO John Mackey gave some general clues at a town hall with employees after the deal was announced.

"The FTC quickly decided that the combination did not create a significant danger of lessening competition in any market", Erik Gordon, a business professor at the University of MI, said.

Consumer Watchdog, a group that had urged the FTC to take action to block the merger, said in a statement it was disappointed.

"Apparently the only way to hold Amazon accountable for its abuse of consumers is at the state level", the organization said in a statement. Of course, the FTC always has the ability to investigate anticompetitive conduct should such action be warranted."At the time of the announcement in June, the deal rattled the market as grocery stocks shifted, boosting Amazon and Whole Foods stocks 2.44% and 29.10%, respectively".

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