Amazon. com Inc. today disclosed in a securities filing that it has received a request for more information from the Federal Trade Commission on its planned $3.9 billion acquisition of 1Life Healthcare Inc., which runs primary-care clinics under the name One Medical.
Publicly held 1Life disclosed the investigation in a securities filing first reported by the Wall Street Journal. The disclosure says One Medical and Amazon each received a request on Friday for additional information about the deal from the FTC.
According to the filing, the so-called Second Request from the FCC is the next step in the standard regulatory review process. The impact, according to the filing, is to extend the waiting period until 30 days after both companies have complied with the Second Request. However, antitrust inquiries typically take many months to complete.
It’s not yet clear what the FTC is asking for, but the filing added, “Both parties expect to promptly respond to the Second Request and to continue to work cooperatively with the FTC in its review of the Merger.”
As the Journal noted, FTC Chairwoman Lina Khan is a longtime critic of Amazon. She wrote a 2017 law review article arging Amazon’s conglomerate structure shouldn’t have escaped antitrust scrutiny. Her concern revolved around use of more data it could use to battle rivals, and healthcare data is considered especially sensitive.
One Medical operates a network of 188 primary healthcare clinics for 767,000 members in 25 U.S. cities after launching the first one back in 2007. During the quarter ended March 31, the company generated net revenue of $254.1 million, up 109%.
“We think health care is high on the list of experiences that need reinvention,” Neil Lindsay, senior vice president of Amazon Health Services, said at the time. “Together with One Medical’s human-centered and technology-powered approach to health care, we believe we can and will help more people get better care, when and how they need it.”
Amazon may be betting a lot on its purchase of One Medical. Shortly after the deal was announced, it said it was shuttering its Amazon Care telehealth service by the end of the year, which likely had some overlap with One Medical. Amazon said the operation proved not to be “the right long-term solution for our enterprise customers.”
Lindsay, a longtime Amazon executive, was appointed to lead the company’s Amazon Health Services division last December. He had previously played a key role in offerings such as the company’s Prime membership program.
According to an internal memo first reported by Geekwire, the retail and cloud computing giant determined that Amazon Care failed to become “the right long-term solution for our enterprise customers.”
But the move cast some doubt on Amazon’s plans to make healthcare services a major offering for the company, and even on whether the One Medical deal would be completed.
Paddy Padmanabhan, founder and CEO of the healthcare and technology advisory firm Damo Consulting, told SiliconANGLE at the time that although the One Medical deal “leaves no doubt that Amazon is serious about healthcare, “the decision to shut down Amazon Care is unexpected and will raise a lot of questions about whether the One Medical deal will even go through or whether Amazon will choose to cancel the deal.”
The company’s technical expertise could help One Medical enhance its capabilities. Amazon’s cloud unit, Amazon Web Services Inc., offers multiple cloud services designed to streamline healthcare organizations’ operations. AWS also has an extensive ecosystem of partners focused on helping healthcare organizations adopt new technologies to support their work.