Amazon's Acquisitions: A Path to Future Growth or Regulatory Headwinds?

Amazon.com Inc. (AMZN) has been on an acquisitive streak, targeting new sectors and expanding its reach. The company's recent deals, including the acquisition of One Medical and iRobot, have raised eyebrows among investors and regulators alike. As Amazon continues to grow and diversify its offerings, it faces potential regulatory challenges that could impact its future growth prospects.



Amazon's M&A strategy appears tailored to withstand the scrutiny faced by its Big Tech peers, some of which are pulling back on dealmaking amid heightened regulatory headwinds. The company's recent acquisitions, valued at $4.3 billion and $1.58 billion respectively, would account for its third- and fourth-largest acquisitions ever if approved. However, concerns about how Amazon will handle sensitive data like medical records could lead to roadblocks for the company's recently announced acquisitions.

The One Medical deal, a cash transaction valued at about $4.3 billion including the target's net debt, would be Amazon's fourth in healthcare or related services. The acquisition is expected to expand the reach of Amazon Care, allowing nonemployees to access its telehealth and in-person services. Meanwhile, the $1.58 billion iRobot deal would add to Amazon's smart home portfolio, which includes Alexa-powered speakers and other devices.



However, Amazon's acquisitive streak has also drawn the attention of regulators. Sen. Josh Hawley, R-Mo., sent a letter to the Federal Trade Commission (FTC) asking for a review of the One Medical transaction to evaluate the potential for mishandling or misuse of patient data. An FTC spokesperson confirmed receipt of Hawley's letter but declined to comment further. Amazon declined to comment on the concerns voiced in Hawley's letter but stated that it plans to comply with all applicable privacy laws and Health Insurance Portability and Accountability Act regulations. The company also stated that it would not share the personal health information of One Medical customers "without clear permission from the customer."

The potential for mishandling or misuse of sensitive data is a valid concern, as Amazon has faced criticism in the past for its data handling practices. In 2019, the company was fined $700,000 by the FTC for violating the Children's Online Privacy Protection Act (COPPA) by allowing children to make in-app purchases without parental consent. Additionally, Amazon's use of facial recognition technology has raised concerns about privacy and civil liberties.



As Amazon continues to expand its reach through acquisitions, it must address these concerns and demonstrate a commitment to responsible data handling practices. The company should be transparent about its data handling practices and work with regulators to ensure that its acquisitions do not harm consumers or stifle competition.

In conclusion, Amazon's acquisitive streak is a testament to the company's ambition and drive to expand its reach and offerings. However, the company must address the potential regulatory challenges that arise from its acquisitions, particularly in the areas of data privacy and market dominance. By doing so, Amazon can continue to grow and innovate while maintaining the trust of its customers and the broader public.