Staples/Office Depot Merger Is a De Facto Monopoly.

[news]

Staples/Office Depot Merger Is a De Facto Monopoly.
Postal workers urge US to halt Staples, Office Depot merger

As the Federal Trade Commission weighs the proposed merger of Staples and Office Depot, the American Postal Workers Union is urging trust busters to nix the deal.

In a report released today, the union argues that the marriage would raise prices. It offers four reasons to block the deal:

    1. Mass market retailers, such as Target and Walmart, are not true office superstore competitors and cannot meet the needs of many office supply customers.
    2. Once the office supply superstore market shrinks to a single company, it will never grow back. The barriers to entry are too high. This will leave the combined Staples/Office Depot mega-corporation as a de facto monopoly.
    3. Internet retailers are not true competitors in the office supply market because they can’t compete for business from the more than one in five U.S. households who do not have Internet access.
    4. Higher prices and reduced choice – the inevitable consequence of a monopoly market – will cause disproportionate harm to communities of color and low-income households.

The FTC rejected in 1997 a marriage of Staples (Nasdaq: SPLS) of Framingham, Massachusetts, and Office Depot (NYSE: ODP) of Boca Raton. But proponents of the deal argue that the rise of Amazon, Walmart and Staples have changed the competitive landscape.

If the FTC and shareholders approve the deal, Palm Beach County would lose a Fortune 500 headquarters.

[Author]

May 28, 2015 at 12:57 PM