The Federal Trade Commission is challenging a proposed merger between Staples and Office Depot.
The government agency filed an administrative complaint on Monday that opposed Staples acquiring Office Depot for a proposed $6.3 billion.
It’s a move they believe would violate the antitrust laws by significantly reducing competition nationwide in the market for “consumable” office supplies sold to large business customers for their own use.
“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.
“The FTC’s complaint alleges that Staples and Office Depot are often the top two bidders for large business customers.”
According to the complaint, both Staples and Office Depot provide the low prices, nationwide distribution and combination of services and features that many large business customers require. The FTC says eliminating the competition between the two companies would lead to higher prices and reduced quality.
Additionally, the complaint states if a office supply business were to enter the market it would do little to counteract the competitiveness of the merger.
The FTC has authorized staff to seek in federal court a temporary restraining order and a preliminary injunction to prevent the parties from consummating the merger and to maintain the status quo pending the administrative proceeding.
Both Office Depot and Staples intend to contest the FTC’s decision.