The Federal Trade Commission’s recent unsuccessful challenge to Whole Foods Market Inc.’s acquisition of Wild Oats Markets Inc. provides merging parties with useful insights into how to navigate the regulatory review process. While the FTC lost this case, companies should not view this as signaling a retreat from the “narrow market” cases the FTC and U.S. Department of Justice historically have pursued. This case highlights how, in light of the agency’s practice of narrowly defining relevant markets when analyzing transactions, merging parties can help themselves resolve deals raising antitrust issues through early development of helpful facts and evidence.
On Aug. 16, the U.S. District Court for the District of Columbia denied the FTC’s motion for a preliminary injunction to block the merger of Whole Foods and Wild Oats. This matter received significant press coverage, including editorials criticizing the FTC for bringing a case based on a narrow product market limited to “premium natural and organic supermarkets.” See, e.g., Holman W. Jenkins Jr., “Lessons of a Food Fight,” Wall St. J., Aug. 29, 2007, at A14; Dan Mitchell, “Lots of Froth but No Bubble,” N.Y. Times, June 9, 2007.
