Lawyers working for The US Federal Trade Commission (FTC), who have gone to court in an attempt to block a merger between two office-supply powerhouses, are being accused of trying to convince an Amazon executive to provide false testimony.
Transcripts from a closed-door hearing before U.S. District Judge Emmet Sullivan were released on Thursday. Sullivan presides over a case involving the FTC’s request for an injunction to block office-supply chain Staples from acquiring rival Office Depot.
The transcripts show that on Wednesday, Staples provided the court with information about the extent to which the FTC tried to get Amazon to provide testimony favorable to its case. Sullivan concluded that the FTC had attempted to convince Prentis Wilson, an Amazon vice president in charge of Amazon Business, to sign a declaration that made statements Wilson knew were false. Sullivan seemed outraged.
“The public ought to know that the government wanted Amazon to say some things that weren’t true,” Sullivan said, according to court transcripts.
The FTC filed a lawsuit last year that argues a combined Staples and Office Depot would possess too much market share, eliminate competition and lead to higher prices. Staples argues the deal should be approved because plenty of competition exists in the market, much of it coming from Amazon. Since the case began, the FTC has tried to paint Amazon Business, launched in 2015, as a fledgling service that won’t be competitive with Staples and Office Depot for years.
One of the most compelling revelations to come out of all this, however, is that Amazon Business appears to have already become a serious player in office supplies.
Wilson said the government provided Amazon with a list of “blockers” that would prevent the retailer from competing with Staples and others. One “blocker” had to do with requests for proposals (RFPs), which is when companies ask suppliers to make bids. The FTC wanted Wilson to say that Amazon wouldn’t be in a position to respond to RFPs from corporate clients until 2017.
On the stand, Wilson said that wasn’t true. He said Amazon management was trying to respond to RFPs right now.
Earlier this week, under questioning by FTC attorneys, Wilson made statements that seemed to downplay Amazon’s chances of competing in the area of corporate office supplies. He was asked whether Amazon was the “primary supplier of office supplies to an enterprise customer?” Wilson said not to his knowledge.
But when Staples’ attorneys cross examined Wilson, he revealed that during the first 11 months of Amazon Business’ existence, about 300,000 customers opened accounts.
In court, Sullivan praised Wilson for being honest.
THE COURT: Were you surprised that the government was telling you what to say and not say?
THE WITNESS: Yes.
THE COURT: Why?
THE WITNESS: Well, we should say what we think is — is —
THE COURT: Is true?
THE WITNESS: Is true.