Amazon closes acquisition of One Medical, but review of deal not complete

Washington, D.C. (CNN) Amazon completed its acquisition of healthcare provider One Medical and its parent company in a $3.9 billion deal on Wednesday, hours after the Federal Trade Commission said it would not contest the purchase, but that regulators were still investigating the deal’s potential harm to competition and consumers.

The landmark deal will transform the e-commerce giant into a primary medical care provider with access to more than 200 physical physician practices, as well as approximately 815,000 One Medical members, according to the company’s latest financials.

The One Medical deal would also allow Amazon to expand its telehealth services and gain valuable relationships with hospital systems, industry analysts said.

On Wednesday, Amazon said One Medical would offer new customers a $55 discount on annual subscriptions for a limited time.

“We are on a mission to enable people to find, choose, buy and engage with the services, products and professionals they need to be and stay healthy, and join One Medical is a big step forward on this journey,” said Neil Lindsay, senior vice president of Amazon Health Services, in a statement. “One Medical has set the bar for what a quality primary care experience should be, convenient and affordable. We are inspired by their human-centered, cutting-edge approach and excited to help 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 still challenge the deal after the fact.

“The FTC’s investigation into Amazon’s acquisition of One Medical continues,” FTC spokesman Douglas Farrar said. “The commission will continue to review the potential harm to competition created by this merger, as well as the potential harm to consumers 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 may enter into the deal at its own risk, an agency official said. Known as the “pre-consumer warning,” the FTC began sending such letters to companies merging in 2021 in response to a surge in proposed deals that threatened to overwhelm regulators’ investigative capacity.

The warning highlights continued legal risk to Amazon and potential concerns that prompted the FTC investigation. Concerns include not only Amazon’s ability to consolidate its economic dominance, but also concerns that its acquisition of valuable health data could lead to the misuse of that information for other purposes, such as targeted advertising or marketing. 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 has partnered with JPMorgan Chase and Berkshire Hathaway in an effort to provide better health care services and better insurance at a lower cost to workers and families at all three companies, and possibly other businesses as well. This effort, called Haven, ended in 2021.

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