On Tuesday, the judge hearing an argument between Staples and the US government whether the office supply store may merge with a smaller competitor expressed doubt over several claims made by the company.
According to The Wall Street Journal, the Federal Trade Commission sued Staples to challenge the merger. US District Judge Emmet Sullivan, who oversees the case, must decide whether the court should issue a preliminary injunction that will prevent Staples-Office Depot deal. Judge Sullivan noted that the legal standards governing the suit gave him a limited role, a circumstance in favor of the FTC.
The judge also said that his duty in deciding on the injunction was only to decide whether the FTC had established the building blocks of its case and not conclude with finality whether the proposed merger would violate antitrust laws. He pointed out that the FTC's plans to hold a separate trial on the deal early next month, criticizing the US commission for attempting to elicit false information from an Amazon Inc. executive to support the lawsuit and block the merger, reports Bloomberg.
Reuters reported that the FTC seeks a preliminary injunction to prevent the $6.3 billion deal. If the government wins the injunction, it would likely terminate the merger since the companies struggle to hold mergers together during a long-running litigation.
Attorney Diane Sullivan said in the closing arguments for Staples that the FTC incorrectly described the office supply market to exclude ink and toner, which is one of the key issues in the lawsuit. The attorney recalled a 1962 case called the United States v. Brown Shoe Co. which gives guidance on appropriate tests for creating a merger is illegal. Meanwhile, Judge Sullivan said that her description of the case is somewhat incorrect.
In 1997, FTC has prevented a merger attempt between two companies, but Staples was encouraged to make this attempt to purchase Office Depot after that chain succeeded in buying OfficeMax in November 2013.
