It is no secret that the FTC doesn’t want the two office supply giants, Staples and Office Depot, to merge into one company. The $6.3 billion company would, according to the FTC, be too large and violate monopoly laws. While the FTC normally wields significant power in these types of cases, and had recently voted 4-0 to attempt to block the merger.
The FTC’s concern is that there would be no significant competition to the combined company. No clear ‘#2 company’ so to speak that could rival the newly formed office supply juggernaut. The judge in the case, Emmet Sullivan, however, has been looking closely at Amazon and their ability to provide office supplies to companies quickly and easily, just as Staples-Office Depot can.
According to an affidavit that was recently ordered unsealed, Amazon said that, “the FTC asked us to insert” wording into their testimony that said they would be unable to provide businesses with next-day deliveries of office supplies for two years.
In a closed-door hearing that took place last week, Amazon balked at the request. As anyone who is at all familiar with Amazon’s services, next-day delivery is something that Amazon is in an excellent position to fulfill for nearly any products that they sell. If Amazon were to acquire significant business contracts for office supplies they could almost immediately implement changes that would allow them to meet the next day demand for these types of things.
Sullivan commented on this when ordering the affidavit unsealed saying, “The public ought to know that the government wanted Amazon to say some things that weren’t true.”
Of course, the FTC is denying that they specifically asked Amazon to lie, but so far there is no clarification of what exactly they did request of Amazon (and I very much doubt there will be).
While this revelation does not necessarily mean that the FTC will lose the antitrust case against the proposal, is certainly weakens it. Amazon is making it very clear that they are able to compete with the combined Staples-Office Depot company should it be permitted.
At this point it appears to some that the FTC is continuing to fight against the merger more to save face than any actual monopoly concerns, though of course they would deny this.
Readers of PMI will want to keep an eye on this case as the results could result in opportunities for those who are working as Amazon affiliates and may even open up opportunities for local suppliers to step in and meet the office supply needs of certain companies.
