Whole Foods Settles with the FTC
The Wall Street Journal law blog has a good primer on the antitrust settlement reached last week between Whole Foods and the Federal Trade Commission over Whole Foods' merger with the Wild Oats grocery chain:
In the settlement announced Friday, Whole Foods agreed to divest itself of 31 Wild Oats stores in 12 states, including 19 stores that already have been closed, and one Whole Foods store. Whole Foods also agreed to relinquish the rights to the Wild Oats brand, which could be sold to a potential competitor.
In exchange, the FTC will drop its legal bid to undo the merger, a bid that had wound up and down through the federal courts…. The commission had argued that the merger would lessen competition in the market for natural and organic foods.
Read the rest here.
As an interesting footnote, libertarian-leaning Judge Janice Rogers Brown wrote the September 2008 federal appellate court decision that ruled against the merger. From The Los Angeles Times:
"The courts have the power to grand relief on the FTC's complaint, despite the merger's having taken place, and the case is therefore not moot," Judge Janice Rogers Brown, a former member of the California Supreme Court, wrote in the 2-1 appellate court decision.
Specifically the three-judge panel said the lower court erred when it ruled that the FTC's definition of what constituted the market for natural and organic foods was too narrow. The FTC wanted a preliminary injunction to stop the takeover while it argued its position in court.
"The court should have taken whatever time it needed to consider the FTC's evidence fully," Brown wrote.
Back in October 2005, Whole Foods CEO (and self-described libertarian) John Mackey debated the social responsibility of business with Cypress Semiconductor founder and CEO T.J. Rodgers and the great Milton Friedman.
Full Disclosure: John Mackey is a donor to Reason Foundation, the nonprofit organization that publishes this website.