Back in June, Amazon announced that it would be acquiring Whole Foods for $13.7 billion. Critics were quick to respond that the deal was a huge threat to competition in the grocery industry and that it shouldn’t receive approval from regulators.
Nevertheless, it looks like the deal will likely close by the end of 2017. Both Whole Foods shareholders and the U.S. Federal Trade Commission (FTC) cleared the acquisition on Wednesday, according to a Reuters report.
“The FTC conducted an investigation of this proposed acquisition to determine whether it substantially lessened competition under Section 7 of the Clayton Act, or constituted an unfair method of competition under Section 5 of the FTC Act,” the agency said in a statement. “Based on our investigation we have decided not to pursue this matter further.”
At the end of its statement, the FTC asserts that it “always has the ability to investigate anticompetitive conduct should such action be warranted,” butErik Gordon, a business professor at the University of Michigan, said that it was always likely that the deal would win government approval.
“[The FTC] declined to block the deal based on a fear that a big, powerful company could use its muscle in some markets to reduce competition in another market. If Amazon actually does that, the commission can step in,” he said.
However, despite this line of reasoning, the decision is still a bitter pill for opponents of the deal. Consumer Watchdog, an advocacy group that had pressured the FTC to block the merger, expressed its disdain for how things turned out.
“Apparently the only way to hold Amazon accountable for its abuse of consumers is at the state level,” the organization said in a statement.
Whole Foods' union workers were also dismayed.
“Amazon’s reach will ultimately reduce the number of grocery competitors that consumers can choose from,” said Marc Perrone, president of the United Food and Commercial Workers International Union, in a July statement. “Regardless of whether Amazon has an actual Whole Foods grocery store near a competitor, their online model and size allows them to unfairly compete with every single grocery store in the nation.”