FTC Target of Merger Challenge Proclaims Proposed Rule Changes Unfair

Whole Foods Market, Inc., which is currently litigating the FTC’s challenge to its merger with Wild Oats Markets, has submitted comments on the commission’s proposed merger rule changes and is urging others to join its “Ad Hoc Committee for FTC Fair Play” to do so as well. Apparently, the FTC will allow comments for only 30 days, which Whole Foods characterizes as “unusually short,” and has proposed (i) setting evidentiary hearings five months from the date of the complaint in merger cases, regardless of complexity, (ii) giving the commission
the authority to decide “all dispositive pre-hearing motions,” (iii) giving the commission or an individual commissioner the authority to preside over discovery, and (iv) providing that “the norm should be that the Part 3 case can proceed even if a [federal] court denies preliminary relief.”

Whole Foods contends, “The proposed regulatory changes collectively will create an antitrust double standard by exacerbating the procedural differences between the Department of Justice and the FTC. If a company happens to be under FTC jurisdiction, it will face a rushed administrative hearing, without a truly independent ALJ [administrative law judge], that carries serious risks of due process violations.” The company asks, “Why should unmitigated due process rights be afforded to companies in the airline, financial institution, steel and other industries that are subject to DOJ merger review, but not to supermarkets and companies in other industries subject to FTC merger review?” The company is also seeking an extension to the comment deadline. See Federal Register, October 7, 2008; Whole Foods Press Release, October 27, 2008.