On Wednesday, Amazon announced the completion of its $3.9 billion acquisition of primary care provider One Medical.
This move, agreed upon last July, aims to enhance Amazon’s presence in the healthcare sector and “dramatically improve” the medical care experience.
Amazon’s healthcare ambitions have been evident for some time, with previous acquisitions such as the online pharmacy PillPack in 2018 for $750 million, and initiatives like launching a virtual clinic for chronic conditions and offering prescription benefits to Prime members.
Through this deal, Amazon gains access to over 200 One Medical brick-and-mortar offices across 26 markets and approximately 815,000 members.
This acquisition is the first major deal announced since CEO Andy Jassy succeeded founder Jeff Bezos in July 2021.
Jassy has emphasized healthcare as a significant area for expansion, highlighting the need for disruption in the industry due to lengthy appointment wait times and the complexities of primary care.
“Customers want and deserve better, and that’s what One Medical has been working and innovating on for more than a decade,” Jassy stated.
“Together, we believe we can make the healthcare experience easier, faster, more personal, and more convenient for everyone.”
Amazon will offer discounted One Medical memberships for U.S. users, reducing the price from $199 to $144 for the first year, regardless of Prime membership status.
The deal’s closure follows the expiration of the Federal Trade Commission’s (FTC) challenge period. The FTC had conducted an in-depth review of the acquisition over the past several months, including issuing a second request for more information last September.
Although Amazon has met the requirements to finalize the deal, the FTC retains the right to challenge the merger later.
The FTC under Chair Lina Khan has informed some merging parties that while the initial review period has passed, investigations may continue, and legal action could be taken.
However, reversing a merger is typically more challenging once the businesses have integrated.
“The FTC’s investigation of Amazon’s acquisition of One Medical continues,” said FTC spokesman Douglas Farrar.
“The commission will continue to look at possible harms to competition created by this merger as well as possible harms to consumers that may result from Amazon’s control and use of sensitive consumer health information held by One Medical.”
The FTC has warned both companies that they are proceeding with the merger at their own risk and that specific concerns about the deal remain.
Amazon’s $8.5 billion acquisition of MGM also cleared regulatory hurdles last March. The company is currently facing an ongoing FTC investigation into its Prime program and online marketplace, as well as a review of its $1.65 billion purchase of iRobot, announced last year.
Lina Khan, a prominent critic of Amazon, gained recognition in antitrust circles with her 2017 Yale Law Journal article, “Amazon’s Antitrust Paradox.”
The article argued that the existing antitrust framework, which focuses on consumer welfare, is inadequate for assessing the impact of digital giants like Amazon.
