FTC and judge make mistake in ending Office Depot/Staples merger

It's a fairly common view within retailing circles that merging two struggling companies gets you one larger, still struggling business. That, I must admit, was my view on the proposed merger between Office Depot and Staples. Even so, the decision by a federal judge to uphold the Federal Trade Commission's (FTC) case to scuttle the merger was a mistake. The FTC case was based largely on the sale of office supplies to large corporate accounts. The agency argued that combining the top office supply chains into one would reduce competition in the marketplace, resulting in higher prices and other negative aspects associated with monopolies. The FTC was able to produce business customers that testified a merger could hurt their negotiating positions. It also put Amazon.com on the stand which testified that its B2B business is still in the early stages and therefore not a significant immediate threat to either Office Depot or Staples. Staples, which attempted to acquire Office Depot, argued that the FTC's objection was based on too narrow a definition of the competitive market. The company argued that both its and Office Depot's consumer businesses were under assault from a whole host of competitors, ranging from Amazon to Walmart. In Amazon, Office Depot and Staples had a great example of the quickly changing nature of the office supplies market. A few years back, the two chains were mostly concerned with each other, OfficeMax (later acquired by Office Depot) and regional businesses such as W.B. Mason, which are more focused on the business market. Today, Amazon is viewed as a major source of lost consumer business for both Office Depot and Staples. Is there much doubt Amazon, Jet.com or other emerging entities could soon serve as similar threats in the B2B market? I don't think so. I'm just not sure why the FTC and the federal judge that stopped the merger didn't think so, as well.