FTC Sues To Stop Staples And Office Depot Business Merger

On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Mergers & Acquisitions on Monday, December 28, 2015.

In all facets of society, there are laws and regulations which must be followed. The business world in California is no exception. However, many times it is not clear what the law actually allows and what it does not. One example is the case of the potential business merger between Staples and Office Depot which this blog previously reported on in October.

The latest development in the case finds Staples in the middle of a lawsuit filed by the Federal Trade Commission. The lawsuit claims that if Staples is allowed to move forward with its plans to purchase competitor Office Depot. it would be in violation antitrust laws. The FTC asserts that the merger would enable Staples to control 70 percent of the office supplies market. Reportedly, the merger would make the newly formed company much larger than the current third largest company in the market, W.B. Mason, which has locations in 13 states.

Staples counters that the FTC allegations apply antitrust laws in a misguided manner and that the complaint is fundamentally flawed. The company cited significant competition in the market from Amazon, Amazon Business and W.B. Mason. The defendant also denies that Office Depot is currently its closest competitor. The trial has been set for mid-March.

Staples will have to do more than just simply deny the allegations brought by the FTC in order to move forward with the business merger. While the government has the burden to prove its accusations by a preponderance of the evidence, Staples must be prepared to counter the allegations and offer strong proof that it is complying with applicable laws and regulations. Many California readers will surely be interested in how this planned business merger progresses.

Source: businessinsider.com, "Staples says U.S. regulators' complaint against merger is 'misguided'", Diane Bartz, Dec. 23, 2015

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