Judge Scolds FTC For Maybe Telling Amazon Exec What To Say In Staples-Office Depot Hearing

Is Amazon a valid competitor to Staples and Office Depot for the business of corporate office supply customers? In a hearing in the federal lawsuit that the Federal Trade Commission has filed against the two retailers, the government argues that it isn’t yet, and the two stores argue that it is, or soon will be. Yesterday, an attorney for Staples accused the FTC of telling an Amazon executive what to say in his testimony about his company’s plans for office supply domination, earning criticism from the judge.

We downloaded the transcript of Wednesday’s testimony from Amazon VP Prentiss Wilson, head of the Amazon Office division, which is a quick read for a 92-page document since the session was supposed to be closed, and access to the transcript limited. (You can download the PDF here, if you like scrolling through a series of black rectangles interspersed with some text.)

The FTC’s goal in this hearing, which is expected to last through the end of next week, is to get a preliminary injunction and stop the proposed merger.

Staples attorney Diane Sullivan asked Wilson whether the FTC had specifically asked him to say that Amazon wasn’t as far along in developing their commercial business supply operation as Staples and Office Depot claim.

She pointed to a draft affidavit that the FTC gave to Amazon’s lawyers, which said that Amazon wouldn’t be prepared to compete for large business supply contracts within the next two years.

That wasn’t actually the case: Wilson said that it’s possible that Amazon may be able to bid on large corporate contracts relatively soon. Amazon Business has already started to bidding on a few contracts, and the company is working to get the infrastructure in place that they’ll need to compete with Staples, Office Depot, or a merged StaplesMaxDepot.

Sullivan recounted the FTC’s draft comments for the court during her cross-examination of Wilson:

Currently, Amazon Business does not believe it will be in a position to respond more comprehensively to large office supply customer RFPs until the beginning of 2017. And Amazon Business will do so only if it can successfully develop and launch the required technologies over the course of 2016.

U.S. District Judge Emmet Sullivan ordered that the parts of the transcript recounting the FTC’s helpful suggestions be made public. “The public ought to know that the government wanted Amazon to say some things that weren’t true,” he told the court, “and that’s going to be public.”

Staples Judge Slams FTC for False Testimony in Office Depot [Bloomberg]
TRANSCRIPT OF PRELIMINARY INJUNCTION AFTERNOON SESSION – SEALED TRANSCRIPT [PDF]