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Staples and Office Depot Fight FTC for Merger

March 21, 2016

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Two office supplies leaders, Staples and Office Depot, face challenges from the Federal Trade Commission (FTC) which argues that their proposed $6.3 billion merger will reduce market competition. The merger hinges on the companies’ ability to convince the FTC that online competitors, in particular Amazon, will maintain the market’s competitiveness following the merger. Fenwick antitrust and unfair competition chair Mark Ostrau spoke with Law360 and Marketplace about the case.

“This is a case where one party is going to try to show Amazon would be a significant competitor to take up the loss of competition, and the government is going to say, ‘No, in fact, Amazon would not replace that competition,’” Ostrau told Law360.

The FTC’s concerns do not stem from worry about the merger’s impacts on individual consumers or small to medium-sized businesses, Ostrau told Marketplace.

“The concern is that a certain class of customer — large national buyers — doesn’t have the same alternatives,” Ostrau said. "It’s not just the products, but it’s the whole package of service and support and national distribution networks that they are accessing.”

In opposing the merger, the FTC aims to prevent the number of major competitors for large corporate purchasing contacts to decrease from two to one, Ostrau said.

A trial began on March 21 and is expected to last two weeks, according to Marketplace.

The full articles are available through the Marketplace and Law360 websites (subscription required).