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TOTM Jarod M. Bona is the CEO of and Attorney at BonaLaw PC as well as a writer at The Antitrust Attorney Blog. Steven Levitsky is also an Attorney at BonaLaw PC and a writer at The Antitrust Attorney Blog.
One year ago, Amazon acquired Whole Foods in a $13.7 billion deal. At the time, David Balto, a disciple of current antitrust orthodoxy, wrote…
Read the full piece here.
TOTM Dirk Auer is a Research Fellow at the Liege Competition and Innovation Institute.
What is antitrust populism? In a deeply insightful paper, Barack Orbach defines it as “the use of thin ideas, exaggerations, and anxieties to advance antitrust theories”. From a policy standpoint, this often leads to the protection of small businesses and the identification of large business size as evil.
TOTM Hal Singer is a Principal at Economists Incorporated and an Adjunct professor at Georgetown University’s McDonough School of Business.
When the Federal Trade Commission (FTC) waved through Amazon’s purchase of Whole Foods without batting an eye last August, some New Brandeisians predicted doom. But I was a bit more sanguine. And that’s still the case on the one-year anniversary of the deal. Here’s why.
TOTM Will Rinehart is the Director of Technology and Innovation Policy at the American Action Forum.
When Amazon and Whole Foods announced they were pursuing a $13.7 billion deal in June of last year, the grocer was struggling. Whole Foods might have been an early leader in organic food, but with that success came competition. Walmart began selling organics in 2014 while Costcost and Safeway revamped product lines for changing consumer preferences. By 2017, same-store sales at Whole Foods had declined for the previous two years and Barclays estimated that the company had lost about 3 percent of their foot traffic between 2015 and 2017. Simply put, Whole Foods wasn’t well managed enough to compete.
TOTM Robert D. Atkinson is President of the Information Technology and Innovation Foundation.
One year after the Amazon/Whole Foods merger, prices at Whole Foods stores have gone down. Amazon Prime members receive discounts on select products and if they use their Amazon credit card they receive 5 percent back. Consumers in many markets can now order groceries online and have them delivered for free. Amazon is expanding the number of stores nationwide. Not surprisingly, consumers appear to like the post-merger changes. Moreover, competitors are fighting back. Kroger, for example, is increasing its stock of organic foods, starting free grocery delivery, and expanding private label goods to reduce prices.
TOTM Eric Fruits is the Chief Economist at the International Center for Law & Economics.
Last July, U.S. Congressman David N. Cicilline, who serves on the House Judiciary Antitrust Subcommittee, called for a hearing on Amazon’s proposed $13.7 billion acquisition of Whole Foods. The Congressman claimed he was not “taking a position on the legality” of Amazon’s attempt to purchase Whole Foods. In fact, his letter noted that “several leading antitrust scholars” had suggested the merger would be beneficial to consumers.
TOTM Steve Horwitz is the Distinguished Professor of Free Enterprise, Department of Economics, at Ball State University.
In considering the importance of the Amazon merger with Whole Foods, some history is helpful. The relevant historical context here is not just the history of those two firms, but the longer and broader history of the grocery industry. In particular, it’s helpful to see this merger as the next stage in a pattern of falling transaction costs and shifting specializations that have driven that evolutionary process. We can see how the two parties to this merger both came to prominence independently as part of that process, and how the merger is the natural next step.
TOTM One year ago tomorrow the Amazon/Whole Foods merger closed, following its approval by the FTC. The merger was something of a flashpoint in the growing populist antitrust movement, raising some interesting questions — and a host of objections from a number of scholars, advocates, journalists, antitrust experts, and others who voiced a range of possible problematic outcomes.
One year ago tomorrow the Amazon/Whole Foods merger closed, following its approval by the FTC. The merger was something of a flashpoint in the growing populist antitrust movement, raising some interesting questions — and a host of objections from a number of scholars, advocates, journalists, antitrust experts, and others who voiced a range of possible problematic outcomes.
Under settled antitrust law — evolved over the last century-plus — the vertical merger between Amazon and Whole Foods was largely uncontroversial. But the size and scope of Amazon’s operation and ambition has given some pause. And despite the apparent inapplicability of antitrust law to the array of populist concerns about large tech companies, advocates nonetheless contend that antitrust should be altered to deal with new threats posed by companies like Amazon.
For something of a primer on the antitrust debate surrounding Amazon, listen to ICLE’s Geoffrey Manne and Open Markets’ Lina Khan on Season 2 Episode 1 of Briefly, a podcast produced by the University of Chicago Law Review.
Beginning tomorrow, August 28, Truth on the Market and the International Center for Law & Economics will host a blog symposium discussing the impact of the merger.
One year on, we asked antitrust scholars and other experts to consider:
As in the past (see examples of previous TOTM blog symposia here), we’ve lined up an outstanding and diverse group of scholars to discuss these issues.
The symposium posts will be collected here. We hope you’ll join us!
Presentations & Interviews The argument over Big Data is split. Some argue Big Data makes a small number of platform companies extremely powerful. These companies have so much . . .
The argument over Big Data is split. Some argue Big Data makes a small number of platform companies extremely powerful. These companies have so much data and such resources that they can damage competition, erode our privacy and maybe even distort our democracy.
But not everyone shares this view. Others say the data giants are so gigantic because they serve us so well. We value what they offer and most of us don’t mind paying for it with our privacy. The ‘big is bad’ theory is not only wrong, it’s dangerous.
ICLE President Geoffrey Manne is one of the loudest critics. He argues that Big Tech opponents have failed to identify clear harms to consumer welfare and calls for an evidence-based approach using an error-cost framework. He also questions the wisdom of trying to shoehorn broader social and political concerns into the narrow economic remit of antitrust law.
In this episode of Competition Lore, Geoff explains why we need to be wary of claims about privacy intrusion as anti-competitive, why network effects should be seen as good not bad, and why the argument that large data-sets prevent new entry is overblown. He doesn’t buy the idea that big business effectively lobbies government to stifle regulation and he muses that the European crackdown on powerful platform companies may be anti-US protectionism at work. For him, the so far restrained approach of the US authorities is the right one. The risks of getting it wrong, he argues, are just too great.
The full episode is embedded below.
