Judge Slaps Down FTC's Attempt To Block Whole Foods/Wild Oats Deal

from the buh-zing! dept

When the FTC stepped in to block the merger between Whole Foods and Wild Oats, it seemed like an obvious case of a market being defined too narrowly. Yes, both companies place a similar emphasis on organic foods, but organic foods represent a small slice of the overall food market, and there's no question that organic and conventional foods are substitute goods. The whole situation was roughly analogous to the situation facing XM and Sirius in their attempt to merge, as the NAB would like the FCC to define the market as simply satellite radio, while in fact it's clearly much broader. It looks like the FTC's argument has been thoroughly rejected as a federal judge declared that the merger should not be blocked. The judge's ruling remains sealed, so his exact rationale isn't known, but it sounds like this could be a useful precedent in other cases going forward.

Filed Under: antitrust, ftc
Companies: whole foods, wild oats

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  1. identicon
    Engin Grad, 17 Aug 2007 @ 2:05pm

    Oligopolies gone wild

    I torn over this article: I admire Whole Foods for several reasons and they are the only company I know who has put voluntary caps on executive pay, however, I'm very wary of monopolies as well as oligopolies (markets with few sellers). U.S. Anti-trust law is designed to prevent the formation of tight oligopolies as well as monopolies. For more info on this I recommend "Market Domination!" by Stephen Hannaford. The book documents the problems of market concentration, and shows that market concentration will only lead to more market concentration. I also recommend "Is Wal-Mart Good for America" by PBS. The documentary shows how Wal-Mart went to court defending a Chinese suppliers practices, which the court later ruled clearly violated trade-laws. Its scary to think the amount in influence large corporations wield these days.

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