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This Congressman Is Worried About What Amazon Will Do With Whole Foods

Grocery stores shivered when news that Amazon, whose rise had led to the decline of brick-and-mortar stores, had purchased Whole Foods for $13.7 billion.

On Friday, U.S. Congressman from Rhode Island David Cicilline voiced that he too was concerned that Amazon would stifle competition in the space. In a letter to the House Judiciary Committee Chairman, Cicilline called for a hearing looking into the Amazon-Whole Foods deal.

“Amazon’s proposed acquisition of Whole Foods raises important questions concerning competition policy, such as how the transaction will affect the future of retail grocery stores,” Cicilline wrote. “Some have also raised concerns that the transaction will also increase Amazon’s online dominance, enabling it to prioritize its products and services over competitors.”

Still, most Wall Street analysts would likely say the congressman could be jumping the gun a bit. While investors in grocery stores such as Walmart and Kroger were certainly spooked by news of the purchase, they’re more afraid of the prospect of what Amazon-Whole Foods could become in the future. As of 2016, Walmart still dominated the grocery space, controlling 17.3% of the market. Whole Foods’ share of the overall U.S. grocery space on the other hand was 1.7%, with Amazon’s at 0.8% according to data from Cowen. Additionally on Friday, Goldman Sachs wrote a note arguing that Walmart would be able to withstand the Amazon-Whole Foods team up.

Cicilline acknowledged that most experts have voiced doubt that the deal would violate anti-trust rules. But he noted that the deal raised concerns about Amazon’s dominance in general in e-commerce.

He added that there had been “wave of consolidation in recent decades that have decreased wages and resulted in gross inequality in the workplace.”

As one user joked about the Amazon-Whole Foods deal:

The letter comes a day after hedge-fund manager Doug Kass said he would short the stock, adding that “at the core of my concern is that the disruptive impact of Amazon’s growth (and plans) could lead to government restrictions affecting that growth.”

In that letter, Kass said he had heard early talks in D.C. regarding Amazon and antitrust regulations. At the time, Kass also said that he expected Amazon shares to potentially fall 10% overnight if such antitrust opposition were announced.

Still, markets shrugged off the congressman’s Friday letter. Amazon remained flat in late Friday trading at $1,001 a share.