Amazon Wins FTC And Whole Foods Shareholder OK for Its $13.7 Billion Deal

With the blessing of the Federal Trade Commission and Whole Foods Market Inc. shareholders, Amazon.com Inc. on Wednesday cleared the last significant hurdles in the way of its $13.7 billion deal to acquire the Austin, Texas-based chain of some 470 grocery stores. The deal, which was announced in June and which the parties expect to close later this year, will hand Amazon its first major foothold in brick-and-mortar retailing and brings with it implications for digital-payments players.

The FTC weighed in hours after the shareholder approval with a statement from Bruce Hoffman, acting director of the commission’s bureau of competition.

“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,” Hoffman said. “Based on our investigation we have decided not to pursue this matter further. Of course, the FTC always has the ability to investigate anticompetitive conduct should such action be warranted.”

Besides its ambitions to operate physical stores, Amazon has been experimenting with payments methods that could work to reduce the steps consumers have to perform to make payments. These experiments, observers say, could ultimately be replicated in some part or all of the Whole Foods chain. Amazon did not immediately respond to a request for comment on Wednesday’s developments.

Already, an experimental Amazon Go store in Seattle combines artificial intelligence with quick-response codes to remove the traditional checkout and give customers an Uber-like experience. Customers identify themselves when they enter the store by scanning a QR code on their phone. Sensors detect and identify products customers remove from shelves, and also detect items customers put back. When customers walk out, the purchase is automatically charged to a stored credit or debit card.

By embedding payment in the physical checkout, Amazon could lock down control not just of payments, but of the resulting data. “That’s not likely to be controlled by a third party,” Richard Crone, principal at Crone Consulting LLC, a San Carlos, Calif.-based payments consultancy, tells Digital Transactions News.

But, as Crone concedes, “It’s early days.” For now, the Amazon Go store is open only to Amazon employees, making it hard for outside experts to check out the technology. Crone, though, harbors few doubts about the ultimate outcome for Amazon.

“They’re working on it,” he says. “This will take years, [but] they will definitely perfect it.”