In 1997 the Federal Trade Commission was granted a preliminary injunction on a proposed merger between Staples and Office Depot

Question

The FTC was able to convince the federal district court that allowing the merger would create the potential for anticompetitive prices since it would give the newly merged company a 75% market share and would only leave Office Max as the remaining office supply superstore. Critically evaluate the FTC's use of "office supply superstores" as the relevant market.

Answer 1

The problem with narrowly defining the relevant market as only including office supply superstores ignores the obvious fact that there are large numbers of stores that are not office supply superstores that still compete with Staples, Office Depot and Office Max. Included in this list would be stores like Walmart, Sam's Club, Best Buy not to mention the hundreds of small independent office supply stores all across the country.