Tech

FTC Investigating Amazon Deal to Buy One Medical Network of Health Clinics

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WASHINGTON—The Federal Trade Commission is investigating

Amazon.com Inc.’s


AMZN -0.24%

$3.9 billion deal to buy

1Life Healthcare Inc.,


ONEM 0.35%

which operates One Medical primary care clinics in 25 U.S. markets.

1Life, which went public in 2020, disclosed the investigation in a securities filing. The disclosure says One Medical and

Amazon


AMZN -0.24%

each received a request on Friday for additional information about the deal from the FTC.

Amazon’s

bid for One Medical added momentum to the push by technology and retail giants to make inroads into the nation’s $4 trillion healthcare economy. The deal was the first major acquisition announced during the tenure of Chief Executive

Andy Jassy,

for whom expansion into healthcare is a priority.

The FTC’s move to investigate the deal could delay its completion as federal competition investigations often take months to finish. Significant U.S. antitrust probes on average take about 11 months, according to data compiled by law firm Dechert LLP.

FTC Chairwoman Lina Khan is a critic of Amazon, having written a 2017 law review article that argued Amazon’s conglomerate-like structure shouldn’t have escaped antitrust scrutiny. Ms. Khan said Amazon’s entry into businesses beyond its e-commerce platform allowed it to gather data it could use to undercut other companies.

The FTC is investigating Amazon’s Prime membership program, according to a legal petition Amazon filed last month. The company argued that FTC staff had made excessive demands on founder

Jeff Bezos

and other company executives and asked officials to quash the subpoenas.

An Amazon spokeswoman declined to comment.

Mr. Jassy is focused on healthcare as an industry in which Amazon could find significant growth opportunities. The company recently revealed that it plans to shut down a healthcare unit it launched in 2019 called Amazon Care after it announced the One Medical deal.

The transaction would give Amazon more than 180 clinics with employed physicians across roughly two dozen U.S. markets. One Medical Chief Executive

Amir Dan Rubin

is expected to remain as CEO once the deal closes.

The line between Amazon and Walmart is becoming increasingly blurred, as the two companies seek to maintain their slice of the estimated $5 trillion retail market while chipping away at the other’s share, often by borrowing the other’s ideas. Photos: Amazon/Walmart

As Amazon seeks to grow in healthcare, the company faces added challenges from competitors such as

UnitedHealth Group Inc.’s

Optum health-services arm and

CVS Health Corp.

, in addition to hospital systems.

In a memo to employees,

Neil Lindsay,

senior vice president of Amazon Health Services, said the healthcare industry continues to be an important arena for innovation.

“As we take our learnings from Amazon Care, we will continue to invent, learn from our customers and industry partners, and hold ourselves to the highest standards as we further help reimagine the future of health care,” Mr. Lindsay wrote.

Write to Dave Michaels at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the September 3, 2022, print edition as ‘FTC Probes Amazon Deal for One Medical.’

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