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FTC and Whole Foods Settle Messy Antitrust Dispute
Legal Times
March 06, 2009
The Federal Trade Commission announced Friday that it has settled its dispute with Whole Foods Market, resolving the agency's charges that the 2007 merger between Whole Foods and Wild Oats Markets, another high-end organic grocery chain, violated federal antitrust laws.
The terms of the settlement mandate that Whole Foods sell 32 of the 74 former Wild Oats grocery stores that it acquired under the merger, as well as relinquish related intellectual property rights, including rights to the Wild Oats brand name. The FTC says the settlement will restore competition in 17 geographic markets. A divestiture trustee now has six months to sell the former Wild Oats stores and related assets to FTC-approved buyers.
The settlement brings a messy legal battle to an end. In June 2007, FTC lawyers sought to block the merger, but initially lost in both the U.S. District Court for the District of Columbia and the U.S. Court of Appeals for the D.C. Circuit. Whole Foods and Wild Oats finalized the merger in August 2007.
But the FTC continued to pursue its appeal, and ultimately got the appellate court to reverse its earlier decision and throw the case back to the trial judge. The FTC took it a step further, pursuing administrative litigation against Whole Foods as well. In December, with the help of Orrick, Herrington & Sutcliffe's Lanny Davis, Whole Foods sued the FTC in D.C. federal court, alleging bias and due process violations. The complaint sought to convince a federal judge to block the FTC's administrative proceedings against the grocery chain.
Davis was not immediately available for comment. In a statement, FTC Chairman Jon Leibowitz said, "As a result of this settlement, American consumers will see more choices and lower prices for organic foods." He added that the resolution of the legal battle "allows the FTC to shift resources to other important matters and Whole Foods to move on with its business."
First reported in The BLT: The Blog of Legal Times
