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The Federal Trade Commission has taken the first step toward blocking the proposed $6.3 billion merger of Staples and Office Depot, saying the deal would hurt competition in the market for office supplies sold to large corporations.

 charging that the merger between Massachusetts-based Staples, the world's largest seller of office supplies, and Florida-based Office Depot would violate antitrust laws.


"The Commission has reason to believe that the proposed merger between Staples and Office Depot is likely to eliminate beneficial competition that large companies rely on to reduce the costs of office supplies," said FTC Chairwoman Edith Ramirez.

Many large business customers buy office supplies by contract, the FTC said. That provides them with a wide range of office supplies at competitive prices, fast and reliable nationwide delivery, dedicated customer service and customized online catalogs, among other things, it said.

"That business-to-business market is distinct from the more competitive retail markets for office supplies sold to consumers," Ramirez said.

The FTC blocked a merger between the companies in 1997, but the companies were hoping the changes in the market since then would persuade regulators to see this deal differently. Big-box stores and Internet retailers play a much bigger part in the business.

 saying the FTC's vision of the office supply market is outmoded and "based on a flawed analysis and misunderstanding of the intensely competitive landscape in which Staples and Office Depot operate":


In addition to the administrative complaint, the FTC has authorized its staff to seek an injunction against the merger. An administrative trial will begin on the FTC's complaint on May 10, 2016.

Business and Economic News

Jim Zarroli

Author

The Federal Trade Commission says the proposed $6.3 billion merger would violate antitrust laws.

FTC sues to block Office Depot, Staples merger

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