## Facts

- Whole Foods Market, Inc. agreed to acquire Wild Oats Markets, Inc., combining the two largest chains described by the FTC as “premium, natural, and organic supermarkets” (PNOS).
- The FTC alleged the merger would substantially lessen competition by eliminating the closest PNOS rival in numerous local markets where the firms competed head-to-head.
- The FTC filed an administrative complaint under §7 of the Clayton Act and sought a TRO and preliminary injunction in federal court under §13(b) of the FTC Act.
- The district court granted a TRO but denied a preliminary injunction, concluding the FTC had not shown a likelihood of success because PNOS was not a distinct relevant product market separate from overall supermarkets.
- After the denial, Whole Foods consummated the merger and began integrating Wild Oats, including closing or selling certain stores.
- The FTC appealed the denial of preliminary injunctive relief.

## Issues

1. Whether the district court applied the correct standard for a preliminary injunction sought by the FTC under §13(b) of the FTC Act.
2. Whether the FTC raised sufficiently serious questions that PNOS could constitute a relevant antitrust product market or submarket, rather than a broad market of all supermarkets.
3. Whether consummation and integration of the merger rendered the case moot or otherwise prevented effective relief.

## Decision

- The D.C. Circuit reversed the denial of the preliminary injunction and remanded for further proceedings under the proper §13(b) standard.
- The court held the district court demanded too much at the preliminary stage by effectively requiring the FTC to prove the ultimate §7 violation rather than showing serious merits questions warranting administrative adjudication.
- The court concluded the FTC presented substantial evidence supporting a PNOS submarket theory, including internal company documents and economic evidence suggesting Whole Foods and Wild Oats were especially close competitors.
- The court rejected the argument that the case was moot after closing, explaining that structural remedies, including divestiture, can remain available post-consummation.

## Legal Principles

- In an FTC action for a preliminary injunction under §13(b), the Commission carries a comparatively lighter burden; it need not prove an actual §7 violation at the preliminary stage.
- A preliminary injunction may issue when the FTC raises serious, substantial questions on the merits that warrant resolution through the FTC’s administrative process.
- Relevant market analysis may recognize a narrower antitrust submarket within a broader product category where evidence shows distinct competition for a group of customers and limited practical substitutes.
- Market definition should not turn solely on the ability of marginal consumers to switch; evidence about “core” customers and differentiated offerings may support a narrower market.
- Internal business documents and empirical price and entry evidence may be probative of competitive proximity and likely competitive effects.
- Merger consummation does not automatically moot an antitrust challenge; courts may still grant effective relief, including divestiture.

## Conclusion

The D.C. Circuit held that the FTC met the §13(b) threshold by presenting serious questions that the Whole Foods–Wild Oats merger could harm competition in a PNOS submarket, and it remanded for consideration of appropriate interim relief despite the merger having already closed.


F.T.C. v. Whole Foods Mkt., Inc., 548 F.3d 1028 (D.C. Cir. 2008)