Leesburg have to pay more $7 for the same product. The percent of price difference is 39%. Horizontal Merger Guidelines (1992) states that fiver percent is used as the threshold of “a small but significant and non-transitory price increase”. In other words, if Office Depot becomes a monopolist in the office supply industry, it would increase price over than 5%. Moreover, based on the result of the FTC’s econometric analysis, it predicts that the price of office supplies would be increased by 8.49%, greater than 5%.
To sum up, the FTC concludes that OSS firms and Non-OSS firms are not in the same market and the office supply market is a relevant market. Therefore, the proposed merger would cause that the number of existing OSS firms decreases from three to two and the price constraints also diminishes. It is likely to bring about anti-competitive effect and higher market price. That is one of main reasons that the FTC blocked this proposed merger.
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It made customer’s purchase more easy. However, with the rapid improvement in technology, one-stop-shopping is not state-of-the-art. Nowadays, the competition becomes more and more significant in the office supply market. OSS firms face stiff competition not only from Non-OSS merchants but also from online retailers. A large number of Non-OSS retailers, such as Walmart and Costco, constantly improve their service and offering in office supplies so that they are capable of competing with OSS