In 2015, when Amazon opened its first brick-and-mortar bookstore, there was a lot of speculation about what the company was really up to. Were the stores designed to sign up new Prime subscribers? Were they hubs for the company’s expanding same-day delivery operation? Could they be stations for the company’s budding drone fleet? Or perhaps these stores were just what they appeared to be: Amazon’s first step to replace the bookstores it had driven out of business.

By the end of 2017, Amazon will have seven bookstores, making it the fifth-largest chain bookstore in the country—itself an alarming sign of what happens when the company infiltrates a supply chain. But with its $13.4 billion purchase of the high-end grocery chain Whole Foods, all of that speculation seems quaint. Shortly after it opened its first bookstore, Vox’s Matthew Yglesias wrote, “Amazon is opening a bookstore for two big reasons: 1. It can. 2. It is driven by a relentless desire to conquer literally everything in its path, and brick-and-mortar retail is a thing.” The purchase of Whole Foods is a sign that CEO Jeff Bezos’s vision of the Everything Store is frighteningly literal: Amazon’s goal is a takeover of retail itself, both physical and digital.

The impact of the Whole Foods acquisition has already been dramatic. After the deal was announced, the value of Amazon’s stock went up by more than the purchase price, which means the deal paid for itself. The value of Amazon’s closest competitors, including Target, whose stock dropped by 10 percent, and Walmart, whose stock dropped by 5 percent, fell by an even larger amount.

This is not what is supposed to happen. Amazon’s stock is supposed to drop with the acquisition of a troubled company. But Wall Street is only reacting to what is obvious: that Amazon is so powerful that anything standing in its way is toast. And while this is great for Amazon’s shareholders, most Americans can’t afford to be so blithe. When one of the nation’s biggest companies enters—and threatens to overwhelm—a whole sector of the economy, the consequences are enormous. If Amazon now controls the pricing in the book industry, just imagine what it can do in the broader world of retail.

“This is horrible for competition,” the director of the New America Foundation’s Open Markets program Barry Lynn told the New Republic. “This is the crushing of competition. Amazon is monopolizing commerce in the United States. It set out to become the company that when you said to yourself, ‘I’m going to go buy something online,’ you would say, ‘I’m going to go to Amazon.’ Now Amazon is seeking to become the company when you say to yourself, ‘I’m going to go buy something’ you think Amazon.”

Like other unimaginably gigantic tech companies—most notably Google and Facebook—Amazon has benefitted from decades of a remarkably narrow interpretation of antitrust law. “Amazon has built its business strategy and rhetoric around lowering prices for consumers and serving consumers more generally,” Lina Khan, a fellow with the Open Markets program, told the New Republic. Under the current interpretation of antitrust law—which was deeply influenced by Robert Bork’s 1978 book The Antitrust Paradox—“harm to consumers is the only plausible harm,” Khan said. As long as Amazon keeps prices low—in other words, as long as it refrains from using its monopoly power to extort consumers—it’s safe from scrutiny.

But with its move into physical retail, the necessity for rethinking antitrust law has never been greater. Amazon and other tech quasi-monopolies have benefitted greatly from the relaxing of antitrust laws that began in earnest in 1982. “Walmart was the perfect creature to emerge from the antitrust changes that took place after the Bork revolution,” Lynn said. “But for the digital revolution that took place in the deregulated marketplace, the perfect creature is Amazon. Walmart understands that and they are scared.”


With the Whole Foods acquisition—and, to a lesser extent, its growing bookstore sideline—Amazon is changing the narrative that it and other tech companies have been selling for years. Tech companies have argued that the decimation of retail was an inevitable result of the digital revolution. It was the paradigm-altering innovation of companies like Amazon that was hollowing entire sectors of that economy. It was a “don’t hate the player, hate the game” argument—except they were telling people to love the game. The digital frontier was the future, and if that drove mom-and-pop stores and big-box giants out of business, well, that was the cost.

But Amazon’s acquisition of 400-plus stores of retail space suggests that it sees real value in brick-and-mortar. “You don’t spend $13 billion on physical stores because you believe that physical retail is over,” Lynn said. “What they’re proving by acquiring Whole Foods is that the collapse of retail that we’re seeing has nothing to do, or very little to do, with the technological revolution than it has to do with the abuse of power by a dominant retailer that intends to become much more dominant.”

What Amazon has planned for Whole Foods is anyone’s guess. “There are so many ways that Amazon can use its power that it’s simply impossible to figure out what it will do. Amazon probably doesn’t even know yet; it will discover and test them, relentlessly,” wrote Matt Stoller, riffing on Bezos’s original name for Amazon, relentless.com. Amazon Prime, same-day delivery, drones—all are options. What’s important is that, having taken over e-commerce, Amazon is looking for new worlds to conquer—and looking for new ways to encroach on Walmart’s turf. If the acquisition of Whole Foods isn’t challenged, Amazon will certainly continue to eat up physical retail the way it once ate up e-tailers like Diapers.com.

It is possible that the Whole Foods purchase will provoke a legal challenge from the likes of Walmart and Target. “Until this point they didn’t want to ever call Uncle Sam and say, ‘Uncle Sam we got a problem here,’ because that looks like weakness,” Lynn said. “But right now they are in a corner, their backs are against the wall. They’re going to call Uncle Sam because that’s the only thing that is going to save them from death.”

The judiciary is stacked with conservative appointments who have a narrow reading of antitrust law. But the issue isn’t with antitrust law itself so much as the current understanding of monopoly. Prices may stay low, but the effect of Amazon’s retail push will be profound for both consumers and producers, with Amazon controlling all kinds of supply chains.

“It’s really easy for the government just to say no to this merger,” Lynn said. “It’s pretty easy for enforcers to take on Amazon, the platform monopolists, to take them on in a coherent way; they’ve got more than ample tools with which to do that.” The problem, however, is finding willing regulators and an executive that’s willing to get in a fight. On the campaign trail, President Donald Trump suggested he would be willing to take on companies like Amazon (though his ongoing feud with Bezos and The Washington Post would certainly add political complications to any such effort). But in office he has shown an eagerness to placate monopolists and the mega-rich.

If Amazon’s bookstores were a toe-dip in the waters of physical retail, its acquisition of Whole Foods is a cannonball. “We’ve got ourselves a little challenge here in America: On one side you have Jeff Bezos and on the other side you’ve got democracy,” Lynn said. “We can choose who we want to trust in. Do we want to trust in America and Americans and American history? Or do we want to trust in Jeff Bezos? That’s what this comes down to.”