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Staples, Office Depot fight back against FTC’s resistance to their merger

This week began a federal court hearing where Staples and Office Depot are having to make their cases for their merger. At the heart of the matter is one central question: are Fortune 500’s likely to go shopping for their office supplies on Amazon?

Fighting for their merger

This week began a federal court hearing where Staples and Office Depot are having to make their cases about whether a proposed merger of the two companies would be beneficial to or terrible for consumers. At the heart of the matter is one central question: are large corporations, such as Fortune 500 companies, likely to go shopping for their office supplies on Amazon?

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FTC’s concerns

When we think of Staples and Office Depot, we often focus on the stores and consumer-facing websites, but it is their commercial supply businesses that are most lucrative. It is both retailers’ commercial supply business that concerns the FTC. Back in December, the FTC filed a lawsuit to block the merger arguing that a merged company would reduce competition nationwide in the market for “consumable” office supplies – pens, paper, sticky notes, etc. – sold to large business customers.

Staples CEO Ron Sargent and Office Depot CEO Roland Smith, sent out an open letter to customers three days before a hearing on the merger was set to start.

In the letter, both CEOs called the FTC “simply wrong” in wanting to stop the merger and argued the FTC’s findings are “based on a flawed analysis of the marketplace and a deep misunderstanding of the competitive landscape.”

“The FTC has cherry picked a few facts to fit its narrative and support its case,” the letter said. “In making its case, the FTC refuses to even acknowledge the rise of new competitors, such as Amazon, and the disruptive effects of the digital economy.”

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Merger “necessary” to compete with Amazon

Now that the hearing is in progress, all parties are finally having their say. In Monday’s opening statements, the FTC shared emails from companies concerned that a mega-StaplesMaxDepot would enjoy monopoly power over the supply business and raise everyone’s prices.

The office suppliers argue that they have to merge or else face going out of business now that Amazon is aggressively going after the commercial office supply market. However, Amazon is new to the business-to-business office supply market and doesn’t have the entire infrastructure in place to include the largest corporations. On Tuesday, Prentis Wilson, vice president of Amazon Business, testified that his division isn’t yet the primary supplier for corporate business in the same way as Staples and Office Depot, but that they have hopes of bidding on large contracts in the next five years.

#StaplesMaxDepot

Written By

Nichole earned a Master's in Sociology from Texas State University and has publications in peer-reviewed journals. She has spent her career in tech and advertising. Her writing interests include the intersection of tech and society. She is currently pursuing her PhD in Communication and Media Studies at Murdoch University.

3 Comments

3 Comments

  1. Pingback: Oddly, Staples introduces coworking space in their stores (really) - The American Genius

  2. Pingback: Office Depot still open to buyers - just not you, Staples

  3. Pingback: Office Depot closing three Denver-area stores, including downtown - BusinessDen

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