Antitrust Law

Court Sides With 'Long Shot' FTC Appeal in Whole Foods Antitrust Battle

When the Federal Trade Commission sought to overturn a judge’s ruling and unravel Whole Foods’ purchase of rival Wild Oats, the appeal was dubbed a long shot.

Regulators usually give up antitrust litigation after a deal is completed because of the difficulty of unwinding it. But the FTC persisted and won in a ruling today by the U.S. Court of Appeals for the District of Columbia, Reuters reports. The court said a lower court judge applied the wrong legal standard for market definition when he denied the FTC’s request for an injunction.

U.S. District Judge Paul Friedman “underestimated the FTC’s likelihood of success on the merits” when he denied the agency’s request last August, the court said in its opinion (PDF).

The appeals judges disagreed with Whole Foods’ argument that the FTC has no authority to undo the deal, making the appeal moot. “Only in a rare case would we agree a transaction is truly irreversible,” the court said.

“The fact that Whole Foods has sold some of Wild Oats’ assets does not change our conclusion,” the court said. “The FTC is concerned about eighteen different local markets. If, as appears to be the situation, it remains possible to reopen or preserve a Wild Oats store in just one of those markets, such a result would at least give the FTC a chance to prevent [an antitrust] violation in that market.”

The court remanded the case for further proceedings.

A hat tip to How Appealing.

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