Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Friday, September 19, 2008

FTC vs. Whole Foods: Which Standards? Which Substitutes?

Posted by D. Daniel Sokol

Brennan110 Tim Brennan of the University of Maryland-Baltimore Department of Economics has written FTC vs. Whole Foods: Which Standards? Which Substitutes?

ABSTRACT: If email traffic over the American Bar Association’s Antitrust Section “conversation” list is any indication, the recent 2-1 decision by a panel of the U.S. Court of Appeals for the DC Circuit Court in FTC v. Whole Foods is the hottest current topic, at least in the U.S. corner of the competition policy community. In that decision, the DC Circuit reversed a district court’s denial of the U.S. Federal Trade Commission’s (“FTC’s”) request to enjoin Whole Foods’ acquisition of Wild Oats. The FTC provided evidence and expert testimony supporting a claim that these were the two largest chains of “premium, natural, and organic supermarkets” (“PNOS”). The parties contended that the firms would lack market power after the merger because consumers would respond to higher prices by going to conventional grocery stores.

The decision has inspired so much comment because of the quantity of issues it raises. In this article, I briefly discuss some legal issues, then turn to aspects of market definition, and conclude with observations relating to recent discussions on the role of distributional considerations in merger assessment.

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