Staples brings Amazon into merger battle

March 14, 2016

The retailer has submitted a court motion to get more documents from its online competitor.

Sun Sentinel reported that the move, in a motion filed by Staples at the US District Court in Washington D.C., has seen Staples seek “more data” and documents from Amazon “as it prepares to fight” the FTC over its merger with Office Depot. The motion has demanded the court to “compel Amazon to produce more documents and data”, as a previous subpoena served by Staples only produced “15 heavily redacted documents”.

The move has taken place because both Staples and Office Depot “are trying to show in court that Amazon and other online and discount retailers create stiff competition that threatens the companies’ ability to survive separately”, Staples adding that “reasonable discovery from Amazon is not merely relevant to this proceeding, it is absolutely fundamental to test the veracity of [the FTC’s] market conclusions”.

Sun Sentinel added that “many of the court documents” that are being used in the case “are either redacted or under seal to protect proprietary information”, and that the FTC had already “questioned competitors and reviewed data” from companies including Amazon “during its investigation into the competitive landscape of the office supply industry”.

The Federal Trade Commission (FTC) filed a lawsuit last year to block Staples and Office Depot’s $6.3 billion (€5.8 billion) merger, with the suit seeing the companies offer to divest $1.25 billion (€1.14 billion) of commercial contracts in exchange for approval. This was rejected by the FTC, leaving Staples to call it “misguided”, and was an upgrade from a previous offer of $600 million (€558 million).

Both companies extended their merger agreement to May in January in light of the court case, after new developments earlier this year suggested “renewed optimism” in the merger being granted, but sources stated “the odds of a settlement are near zero”. Staples is also reportedly facing the threat of loans being withdrawn, and made a series of staff cuts. The two companies previously called the decision to block their merger “flawed”, with a court case likely in March.

However, the European Union recently approved the merger after Staples and Office Depot made concessions, while both companies also sold their corporate contract business to Essendant, but the FTC was said to have been “unimpressed” by the concession. Meanwhile, Staples has now revealed it plans to close 50 stores this year, and confirmed that over 1,000 jobs had been cut.