Staples and Office Depot want to pledge their future and their fortunes together in corporate matrimony, and the Federal Trade Commission objects to their union. The companies and the Federal Trade Commission are making their cases before a federal judge, and the key question in this merger seems to be whether large corporations plan to buy their office supplies from Amazon in the future. An Amazon executive testified that they haven’t signed any major companies, and aren’t really pursuing big corporate contracts. Yet.
While their stores are important, the FTC is mostly concerned with both retailers’ commercial supply business, stocking the cabinets of businesses of all sizes. In Monday’s opening statements, the FTC cited e-mails from representatives of unnamed companies, who were worried that a united StaplesMaxDepot would enjoy monopoly power and raise everyone’s prices. The office suppliers argue that Amazon is aggressively going after the commercial office supply market, and they need to merge to stay in business.
On Tuesday, Prentis Wilson, vice president of Amazon Business, testified that the company has created tools for corporate supply orders, including a system that allows one employee to approve another’s purchases. Yet they aren’t pursuing corporate business in the same way that Staples, Office Depot, and their smaller regional competitors do.
While Amazon sells everything from uranium ore to Xfinity cable service, it’s new to the business-to-business office supply market, and doesn’t have all of the infrastructure yet. Amazon doesn’t create catalogs of approved supplies for a given company, for example, and they don’t deliver supplies right to customers’ cabinets.
More importantly, they generally don’t seek out companies’ requests for proposals to bid on supply contracts. Of the contracts that Amazon does handle, they don’t include the largest corporations. Wilson testified that his division isn’t the primary supplier to any corporations that take in more than $250 million per year, but that they hope to be capable of bidding on such large contracts in the next five years.
Amazon exec weighs in on proposed Staples-Office Depot merger [Reuters]
Amazon Executive Undercuts Staples Claim of Competitive Threat [Bloomberg]
by Laura Northrup via Consumerist
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