Amazon exec weighs in on proposed Staples-Office Depot merger

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A box from is pictured on the porch of a house in Golden, Colorado July 23, 2008. REUTERS/Rick Wilking/Files
A box from is pictured on the porch of a house in Golden, Colorado July 23, 2008.

Reuters/Rick Wilking/Files

An executive with Inc’s (AMZN.O) unit that sells office supplies to businesses gave testimony on Tuesday that appeared to bolster a U.S. regulator’s wariness over a potential merger of Staples Inc (SPLS.O) and Office Depot Inc (ODP.O).

The U.S. Federal Trade Commission filed a lawsuit last year to block the proposed $6.3 billion acquisition of Office Depot by Staples, arguing that it would hurt competition and lead to higher prices for consumers.

A federal judge is considering whether to issue a preliminary injunction to block the deal. The decision will depend in part on whether Amazon is perceived as a potential big player in the office supply business.

The Amazon executive will be cross-examined by lawyers for Staples on Wednesday.

During the second day of a hearing on Tuesday, Prentis Wilson, vice president of the relatively new Amazon Business unit, testified that his business had no big corporate customers, did not stock shelves and often did not bid for a customer’s business.

Wilson’s comments appeared to support the FTC’s argument that the online retailer could not provide the same level of services as Staples and Office Depot.

Wilson testified that Amazon Business, which began in early 2015 as a successor to Amazon Supply, is starting to respond to some demands by corporate customers. It allows companies to approve purchases by their employees. It has also started permitting companies to pay an invoice instead of paying for purchases up front.

But Wilson said that Amazon Business responded to requests for proposals, which are essentially bids, only in a “limited way.” He said the unit does not create customized catalogs for companies and does not stock shelves for companies.

“At this point, Amazon Business does not negotiate contracts with large business customers,” he said.

Asked if Amazon was the primary supplier to any company with revenue over $250 million, Wilson said, “Not to my knowledge, no.”

In opening arguments on Monday, Staples’ lawyer, Diane Sullivan, argued that her client feared Amazon, which said in 2015 that it planned to enter the office supplies market in a serious way.

The hearing is expected to last for up to two weeks.

(Editing by Matthew Lewis)