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Staples says judge should toss FTC case in Office Depot deal

🕐 2 min read

Staples says the U.S. government failed to show that the company’s takeover of Office Depot should be blocked and urged a federal judge to dismiss an antitrust lawsuit seeking to scuttle the deal.

Diane Sullivan, a lawyer for Staples, told U.S. District Judge Emmet Sullivan in Washington on Tuesday that Staples and Office Depot won’t present any evidence in the trial and that the judge can rule now solely on the government’s failure to make a convincing case that the deal will harm competition.

“They haven’t met their burden,” she said, calling the government’s case an “utter failure.”

The decision by Staples to decline to present witness testimony now puts the fate of the $6.3 billion takeover in the hands of the judge, who began hearing closing arguments from both sides Tuesday. A decision in favor of the government would spell the end of the merger.

“This is really unusual,” Andre Barlow, an antitrust lawyer at Doyle Barlow & Mazard, said about Staples’s move. “I assume Staples is fairly confident.”

The FTC argues that the combination of Staples and Office Depot, the No. 1 and No. 2 office-supply retailers, will mean one company will dominate the market for the sale of pens, notebooks and paper to large companies. The two companies go head-to-head for that businesses and by combining, corporate customers will see higher prices, the agency says.

That competition provides “tangible benefits that cannot be denied,” FTC lawyer Tara Reinhart told Judge Sullivan.

During her closing argument, the judge appeared skeptical of some parts of the FTC case. He questioned why the FTC was excluding ink and toner as part of the basket of products at issue in the case, calling it a “huge issue.” He also asked why the agency was focusing only on the biggest corporate customers rather than on smaller ones as well.

Judge Sullivan at times has been critical of the FTC’s handling of the case. He previously complained that the agency attempted to elicit false information from an Amazon.com Inc. executive to support its case, describing the FTC’s actions as “very disturbing.” And last week, he said he wouldn’t consider some testimony the commission planned to introduce about Amazon’s ability to be a competitor against Staples and Office Depot.

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