Allow Amazon to devour Whole Foods

In just 20 years as a publicly traded company, Amazon has become a retailing colossus, decimating traditional brick and mortar stores on its way to a market valuation of nearly half a tril

lion dollars. So since Amazon announced plans this month to buy high-end grocer Whole Foods, some consumer groups have lined up against the deal.

Companies hold 2.5% of market

Their concern is understandable. The $13.7 billion purchase has the feel of something that could mark the beginning of a downward spiral for grocery stores, not unlike what has happened to department stores.

But for federal authorities to block the deal would be a huge mistake. To do so would require a novel interpretation of antitrust laws going back to the late 19th century.

Whole Foods controls less than 2% of the grocery business, Amazon less than 1%. Those are hardly the types of market shares that should raise regulatory red flags.

More important, blocking the deal would essentially be punishing Amazon for its success. Amazon became the largest online retailer in much of the world largely by innovating and inventing whole new ways of serving customers. The company has cut costs and made shopping much more convenient.

For many people with a constant demand for baby products, pet foods, health care sundries and more, having these things arrive at the door is a vast improvement over frequent trips to the store. The same goes for people who’d rather get a root canal than venture into a shopping mall parking lot at the height of the holiday rush.

There is, to be sure, reason to be wary of Amazon, just as there is with other high-flying companies that have invented or reinvented whole industries.

Google and Facebook collect two-thirds of digital advertising revenue, as traditional media companies have faltered. Amazon and Netflix have become major distributors of film and television, much to the dismay of broadcasters and cable providers. Amazon and, to a lesser extent, Walmart have become the titans of online retail as the likes of Sears and J.C. Penney decline.

If these trends continue and a few companies come to dominate much of the economic landscape, lawmakers might eventually have to revisit the core principles of antitrust. E-commerce has already evolved to the point where online retailers no longer deserve to be exempt from sales taxes, even in states where they don’t have a physical presence.

But for now, the positions of Amazon and other tech titans are primarily the result of a technological revolution. Better to let that revolution play out, continuing to produce product advances and efficiency gains, than to step in with a heavy hand to curb Amazon’s appetite.