Staples Inc. and Office Depot are pursuing a huge merger sure to turn the office supplies industry on its head.
The FTC (Federal Trade Commission) however, is challenging the major merger in protection of antitrust laws. The merger, the FTC argues, has the potential to seriously curb competition in the office supplies industry. In the spirit and protection of U.S. capitalism, the FTC is hoping to block the merger. However, the FTC is under fire now, as it may have used questionable tactics to support its case against the merger. Brent Kendall from the Wall Street Journal has detailed some of the allegations against the FTC.
In its case against the merger, the Federal Trade Commission requested the online e-commerce giant Amazon.com to testify against the merger. Although not illegal, the FTC’s request for Amazon to testify in a script-like fashion perturbed many. Reportedly, the government agency pushed Amzazon.com to sign a document that held statements Amazon simply did not believe to be true. By signing the document, Amazon would testify that it was not ready to meet the office supply needs of larger companies if the Staples-Office Depot merger prevailed. Amazon did not believe this to be true.
Amazon just last year launched Amazon Business, a site that offers office supplies and products to its business customers. The online retailer’s new move has disturbed companies like Staples and Office Depot, who could potentially lose market share with the rise of Amazon’s new branch. Amazon is not new to rattling feathers in unfamiliar industries though. The company has disturbed other industries in the past, the most recent of which includes brick and mortar bookstores, frustrating companies like Barnes & Noble and Books-A-Million. Regardless of what the opposing parties say, the FTC continues to fight the merger.
In attempts to block the merger, the FTC wanted Amazon to testify its own inability to compete with the merging companies. This included saying that it would not be able to meet customers’ needs for at least another year, and comment on its lack of control over its third-party sellers in its own marketplace. However Amazon rejected testifying using that language, citing concerns about accuracy.
Prentis Wilson, a vice president at Amazon Business, was cited saying, “ “That’s why we were unwilling to say that, because we weren’t sure if that was going to be true or not.”
Last week, the U.S. District Judge Emmet G. Sullivan called the FTC’s tactics “very disturbing”. The FTC defends itself saying that it often takes the lead drafting witness declarations and documents.
“Ensuring the integrity of a declaration—that the statements are truthful, accurate and clear—is critical to the FTC,” the commission said.
According to the government agency, the drafted declarations are meant to inform the commission on whether or not to sue, and are often used by judges to properly weigh the government’s case. In an attempt to compete with the e-commerce giants, Staples and Office Depot will continue pushing for the merger, as will the FTC against the merger.
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