U.S. antitrust enforcers filed a lawsuit this week seeking to block Staples Inc.’s acquisition of rival Office Depot Inc., arguing that a tie-up of the last large national office-supply chains would eliminate important competition. The acquisition was announced back in February.
The lawsuit by the Federal Trade Commission alleged the transaction would mean higher prices and fewer options for big companies that buy office supplies in bulk.
“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,” FTC Chairwoman Edith Ramirez said in a statement.
The lawsuit marks the second time the FTC has intervened to prevent to the two companies from combining. The commission in 1997 won a ruling from a federal judge that blocked an earlier planned Staples-Office Depot merger.
Both companies argued the outcome should be different this time because the industry has evolved over the past two decades, including through growing retail competition from the Internet and big-box retailers. The FTC acknowledged this evolution in 2013 when it allowed Office Depot to merge with OfficeMax, then the No. 3 office-superstore chain.
The FTC’s new lawsuit doesn’t focus on how further consolidation would affect everyday retail customers. Instead, it focuses on big national business accounts served by Staples and Office Depot.
LEVERAGE will continue to monitor the lawsuit but says this will have no affect on the way its members’ do business with partner Office Depot. LEVERAGE‘s partnership with Office Depot was designed to help credit unions maximize savings through national, collaborative buying power. The program serves credit unions of all asset sizes through a cooperative purchasing program which maximizes discounted pricing, offering savings up to 70 percent off the catalog list price.
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