FTC Clears Purchase by Amazon of Whole Foods Market

On Wednesday, the Federal Trade Commission gave its okay to the purchase by Amazon.com of Whole Foods Market. The deal valued the specialty chain of grocery stores at just over $13.7 billion.

The federal regulator also announced that it would not be undertaking any additional investigation of this acquisition, which now should be finalized before the end of 2017.

Earlier on Wednesday, shareholders gave their ok to the deal, while shareholders of Amazon are not required to approve this acquisition.

The deal takes place at a time when some observe that the current antitrust law is quite antiquated and is not prepared to address today’s dynamic of the fast-changing and modern corporate landscape that has given rise to Internet giants such as Amazon, Facebook and Google.

The acting FTC director, Bruce Hoffman said through a prepared statement that the federal agency looked at this proposition acquisition as a way to determine if it substantially lessened the competition in the grocery store industry, and Hoffman said that the FTC made a decision not to pursue the matter any further.

With the purchase of Whole Foods, Amazon will have a share of 2% of the U.S. grocery market that is over $600 billion annually.

Walmart holds a stake in the market of more than 20%, while Kroger has 7%.

This is one of the FTC’s first big decisions since the election of President Donald Trump. The U.S. president has been critical of Amazon during the past, including claiming incorrectly that the business does not pay its taxes.

Trump wrote this month on Twitter that Amazon was doing big damage to retailers that pay taxes. He added that cities and states across the U.S. are being hurt with many jobs lost.

Amazon in its most recent annual report submitted to the Securities and Exchange Commission said it had paid income taxes of over $412 million in 2016, while it paid $273 million during 2015 and $177 million during 2014.

In every state where there is a sales tax, Amazon collects sales tax.

The deal, and probable acquisition of over 460 brick and mortar locations, signals a big turning point for the e-commerce behemoth, which for many years has struggled while trying to enter the U.S. grocery market.

Amazon has been quiet about plans for the food chain, based in Austin, Texas, while Whole Foods, has become an international chain that has close to $16 billion in revenue annually.

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