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The New York Times reports that Judge Emmet G. Sullivan of the Federal District Court for the District of Columbia ruled yesterday that the proposed $6.3 billion acquisition by Staples of rival Office Depot "would 'substantially impair' competition in the business of selling office supplies."

The Federal Trade Commission (FTC) had sued to block the merger of the two companies, saying that it would result in too much power residing in the hands of one company, and higher prices for large corporations and institutions.

The Times writes, "In the case of Staples and Office Depot, the two would have had about $37 billion in revenue and roughly 3,500 stores. In 1997, the F.T.C. blocked a previous attempt by the two companies to combine.

"The companies had fought back in court, arguing that joining forces was necessary with much-larger competitors like Walmart and Amazon. Other antitrust regulators, including in Europe, signed off on the deal after the two companies agreed to sell off certain parts of their businesses.

"In statements on Tuesday, both Staples and Office Depot said that they planned to move on from the failed merger. Under the terms of the deal, Staples will pay Office Depot a $250 million breakup fee."

The Times goes on to say that the ruling handed the Obama administration another "huge victory" in its ongoing efforts to block "big deals they say create juggernauts that would unfairly dominate their industries."
KC's View:
Add Judge Sullivan's name to the list of people who seem never to have heard of the internet and clearly never have shopped on Amazon. Because this ruling is a crock ... and based on competitive rules that were drawn up decades ago, when people couldn't shop online.

The rationale appears to be that because corporate and institutional processes make it harder to just go on Amazon and buy stuff, those processes cannot be changed. Which is another crock.

Let's start the countdown clock now for when Office Depot ends up filing for bankruptcy protection.