WASHINGTON, DC (CNN) Amazon on Wednesday completed its $3.9 billion acquisition of healthcare provider One Medical and its parent company, hours after the Federal Trade Commission said it would not contest the purchase, regulators said however, potential competitors and consumers are still investigating the transaction’s harm.
The landmark deal will transform the e-commerce giant into a primary healthcare provider with access to more than 200 in-patient medical practices and some 815,000 One Medical members, according to the company’s latest financial statements.
The deal with One Medical would also allow Amazon to expand its telehealth services and build valuable relationships with hospital systems, according to industry analysts.
On Wednesday, Amazon announced that One Medical would be offering a $55 discount on annual memberships to new customers for a limited time.
“We’re dedicated to making it significantly easier for people to find, choose, afford and engage with the services, products and professionals they need to get and stay healthy , and partnering with One Medical is a huge step forward in that journey,” said Neil Lindsay, senior vice president of Amazon Health Services, in a press release. “One Medical has set the bar for how a high-quality, convenient and affordable primary care experience should be like. We are inspired by their people-centric, technology-centric approach and look forward to helping them continue to grow and serve more patients.”
But while Amazon can close the deal without the immediate threat of an FTC antitrust lawsuit, the agency is still investigating the acquisition and can contest the deal after the fact.
“The FTC’s investigation into Amazon’s acquisition of One Medical continues,” said FTC spokesman Douglas Farrar. “The Commission will continue to assess potential competitive harm resulting from this merger, as well as potential consumer harm that may result from Amazon’s control and use of sensitive consumer health information held by One Medical.”
The FTC plans to warn Amazon that it could do the deal at its own risk, an agency official said. Known as the “Pre-Consummation Warning,” the FTC began sending such letters to merging companies in 2021 in response to a surge in proposed deals that threatened to overwhelm regulators’ investigative capabilities.
The alert highlights the ongoing legal risk for Amazon and the potential concerns driving the FTC investigation. Concerns include not only Amazon’s potential to consolidate its economic dominance, but also fears that acquiring valuable health data could lead to the misuse of that information for other purposes, such as targeted advertising or e-commerce, the agency official said.
Amazon’s deal to acquire One Medical follows its 2018 purchase of online pharmacy service PillPack, which later became Amazon Pharmacy. Separately, Amazon partnered with JPMorgan Chase and Berkshire Hathaway to offer better healthcare and insurance at a lower cost to the three companies’ workers and families, and potentially other companies as well. This effort, called Haven, ceased in 2021.