Critics have called for the Amazon – Whole Foods Market deal to be dropped amid concerns it grants the online giant an excessive advantage.
Although experts have predicted the deal will be approved by regulators, many have highlighted that its head start in infrastructure, logistics and leverage with suppliers grants it an advantage few rivals can hope to compete with.
This challenge could potentially act as grounds for the $13.7 billion (£10.8 billion) deal to be blocked amid antitrust breaches. Antitrust experts however believe the deal will be approved by the Federal Trade commission as Whole Foods is a relatively minor presence in the grocery landscape and Amazon sells very few groceries.
Grocers in both the US and the UK have seen their share prices plummet since the deal was announced a week ago. They fear that Amazon will slash prices in an already competitive market crippling the industry, just as it did to book sellers when it came to prominence.
READ MORE: Amazon set to acquire Whole Foods for £10.7bn
However antitrust enforcement generally approves deals which lower prices for consumers, especially in the face of looming economic turbulence.
“As a matter of policy, should this be blocked?” professor of antitrust law at Cleveland State University Chris Sagers said.
“There should be a challenge to this because there should be a strong presumption against growth by acquisition and in fact there is supposed to be such a presumption in our law. It’s what Congress intended.”
Amazon‘s extensive buying power could also damage the new partnership‘s suppliers, as its business model based on lots of products at low prices would push producer prices down.
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