John Naughton: Tech giants face no contest when it comes to competition law | John Naughton

Amazon’s acquisition of Whole Foods Market ought to be blocked by monopoly regulators, but as long as they keep delivering the goods no one seems to mind

The news that Amazon had acquired Whole Foods Market for $13.7bn sent shivers down the spine of every retailer in America. Shares in Walmart fell 7%, and rival Kroger by 17%. Amazon’s market capitalisation, in contrast, went up by $11bn. So why the fuss? At first sight it seemed straightforward: Amazon wanted to get into food sales, and it fancied having a network of 400 urban stores; and Whole Foods (which some of my American friends call “whole wallet” because of the cost of its products) was ailing. There was also a small political angle: John Mackey, co-founder of Whole Foods, had been enmeshed in a row with an activist investor that threatened to drive him from power; by selling to Amazon, he gets to keep his job. So: small earthquake in food retailing, not many dead?

Er, not quite, and only if you avoid taking the long view. And, with Amazon, the long view is the only one that makes sense. In the mid-1990s, people thought that its founder, Jeff Bezos, just wanted to run an online bookshop. After a while, as Amazon rapidly started selling lots of non-book stuff, people thought he just wanted the company to become the next Walmart. Spool forward a few more years and people realised that Bezos aspired to run “the everything store”. Then he launched Amazon Web Services (AWS) and rapidly became the dominant provider of cloud computing services. And so it went on, to the point where people began to ask: what business does Jeff Bezos not want to dominate? And the only answer to that currently is: no one knows.

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