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RI Rep. Calls for Hearing on Amazon-Whole Foods Deal

A U.S. Representative from Rhode Island has called for a hearing on Amazon.com's anticipated acquisition of Austin, Texas-based Whole Foods Market, believing that it could negatively impact consumers' wages.

The proposed merger could increase costs and decrease wages for Americans as a result of decreased competition in the marketplace, David Cicilline (D-R.I.) argued.

“Competition is essential for a healthy economy – that's true across the board,” he stated. “Amazon's proposed purchase of Whole Foods could impact neighborhood grocery stores and hardworking consumers across America. Congress has a responsibility to fully scrutinize this merger before it goes ahead. Failing to do so is a disservice to our constituents.”

The transaction, Cicilline said, occurs during a long period of economic concentration that already has caused a decline in worker wages and mobility, essentially allowing a small number of monopolists to hoard the “fruit of economic growth.”

“Mounting economic research indicates that decades of consolidation has empowered a small number of firms to pay lower wages to employees precisely because these businesses 'have an incentive to employ fewer workers at a lower wage than they would in a competitive labor market,'” he noted.

Cicilline shared other concerns, too, including one regarding suggestions of increased automation and resulting job losses, thus threatening America's 16-million-strong service and retail workforce.

“While online retail will and should continue to grow, we need to better understand the impact of this transaction on small businesses and retailers in our local communities,” he said.

Others have shared their disapproval of Amazon's proposed purchase of Whole Foods: Last week, Whole Foods shareholder Robert Riegel filed a lawsuit in the U.S. District Court for the Western District of Texas in an attempt to block the deal, citing that the grocer's July 7 proxy statement was misleading, and that it failed to disclose critical information to stakeholders.

And just today, The Washington Post reported that Marc Perrone, president of the United Food and Commercial Workers International Union sees the Amazon-Whole Foods deal as a threat to American jobs. This spurred his plan to file a complaint to the Federal Trade Commission to argue that letting Amazon buy Whole Foods would trigger a wave of store closures and, eventually, quash customer choice.

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