ChewsWise Blog

ChewsWise Blog

Legal Eagles Ponder WFM v. FTC

I'm not a lawyer, but my thinking comes awfully close to these two legal scholars blogging on the FTC's opposition to the Whole Foods/Wild Oats merger.

Thomas Lambert of the University of Missouri law school writes of the FTC complaint: "This is bad news for consumers. If the FTC successfully blocks this merger, it will thwart consumer-friendly productive efficiencies without procuring any benefits in terms of constrained market power."

Geoffrey Manne at Lewis & Clark Law School writes at Truth on the Market:

The FTC argues that Whole Foods and Wild Oats compete for market share.  I have no doubt that’s true.  The question, left unanswered in this complaint, is whether, in a business notorious for razor thin margins, shifting market share injures anyone at all other than the losing competitor.  Likewise, other than John Mackey’s belief to the contrary, the question remains what evidence supports the seemingly crazy contention that this battle for market share is fought by these two merging companies alone, to the exclusion of practically everyone else.

This is similar to my point: the FTC is punishing Whole Foods for the way it markets natural and organic foods, finding that this creates a distinct industry. This has nothing to do with the actual products it sells, of which it would have combined 15 percent market share.