Amazon’s $3.9B Deal Passed Despite Amazon Antitrust & Privacy Concerns

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The recent Amazon purchase of One Medical’s $3.9 billion deal (see Amazon Acquires One Medical, Making It a Leader in Hybrid Care) was completed hours after the Federal Trade Commission (FTC) announced it would not challenge the transaction. However, a history of FTC actions regarding Amazon may interest professionals following Telehealth.org’s reporting of Amazon’s moves into the healthcare arena. The FTC’s investigation of the OneMedical deal was initially released in late 2022 when a headline by the Wall Street Journal announced that the FTC was preparing a possible Amazon antitrust suit.¹ Amazon privacy concerns have also been voiced by leading US Senators.

Amazon Antitrust Concerns

Antitrust reform groups had been calling for the FTC to block the acquisition for months since Amazon’s announcement in July that it intended to buy One Medical. Proponents of antitrust reform argued that technology firms like Amazon hold so much data that they create a barrier to entry for rivals.

Amazon has invested in healthcare for years, including with an online pharmacy such as the $750 million acquisition of the online pharmacy PillPack in 2018. 

Senator Elizabeth Warren (D-Mass.), former law professor and the senior United States senator from Massachusetts, has been a prominent Amazon antitrust and privacy critic. In September of 2022, she challenged Amazon’s $1.65B acquisition of iRobot, calling on the FTC to oppose the purchase and, in her words, “raising concerns about Amazon’s anticompetitive practices that put consumers and their privacy at risk.” She reportedly added that the deal “should be deeply concerning to American families and antitrust regulators.” 

Amazon Privacy Concerns

Senator Warren’s website continues:

The lawmakers also expressed concerns about Amazon’s data privacy policies and impacts on consumer privacy if it acquires iRobot. Amazon has failed to protect consumers and consumer privacy – its Alexa voice assistant listens and records to consumers without consent, and it partners with over 600 law enforcement agencies through its Ring video doorbells. Since 2017, iRobot has moved into data collection, using mapping technology to improve its products and appeal to Big Tech companies. “Amazon’s acquisition of iRobot would give the company access to the inside of homes through Roomba’s mapping technology, building on the access it bought with the Ring and Blink purchases in 2017 and 2018 and effectively giving Amazon’s ‘eyes and ears’ inside the home – the stated goal of the company since at least 2017.

Privacy issues also involve Amazon’s ability to leverage its Prime Membership, which has an undisclosed registration count, guessed to be between 100 and 200 million in 2022. More specific to the Amazon One Medical acquisition, Warren was cited in the Washington Post as saying the following:

Amazon already has too much economic power, a terrible track record with workers, and alarmingly little clinical experience, which raises major questions about how this deal could impact consumer prices and health care choices.”

That same Washington Post article referenced Senator Amy Klobuchar (D-Minn.) as urging the FTC to thoroughly investigate the deal, adding the following:

Klobuchar cited Amazon’s “history of engaging in business practices that raise serious anticompetitive concerns,” including favoring their own services. “I also ask that the FTC consider the role of data, including as a potential barrier to entry, given that this proposed deal could result in the accumulation of highly sensitive personal health data in the hands of an already data-intensive company,” Klobuchar wrote.

Critics voicing a different viewpoint commented that even with the purchase of One Medical, Amazon will still be dwarfed by healthcare giants like United Health & Cigna.

A Wall Street Journal article was the first to mention the Amazon-One Medical acquisition on February 21, 2023. It added that the FTC chose “not to sue in time to block the $3.9 billion deal… but will continue its investigation of the merger.” For details, see the securities filings of One Medical’s parent organization, 1Life Healthcare, Inc., based in San Francisco.

Telehealth.org will keep you posted on any other FTC Amazon antitrust or Amazon privacy actions if they occur.