News Release Details

BOSTON--(BUSINESS WIRE)--Jun. 2, 2016-- Charles River Associates (NASDAQ: CRAI), a worldwide leader in providing economic, financial, and management consulting services, today announced that CRA provided antitrust and competition economics analysis support to the Federal Trade Commission (FTC) in its successful challenge of the $6.3 billion merger between Staples and Office Depot. In December 2015, the FTC sought a preliminary injunction to block the merger over concerns that it would significantly reduce competition nationwide in the market for consumable office supplies sold to large business customers for their own use. The ruling granting the preliminary injunction was announced on May 10, 2016.

CRA economists worked with the FTC throughout the merger review process and analyzed antitrust and competitive issues around the sale and distribution of consumable office supplies. Senior Consultant to CRA, Professor Carl Shapiro applied methods endorsed by the 2010 Horizontal Merger Guidelines to evaluate the merger. As the ruling noted, the concepts of cluster and targeted customer markets were critical in the definition of the relevant market in this case. Professor Shapiro testified that the relevant market is the sale and distribution of consumable office supplies to large customers, as distinct from the sales of other products used in offices and sales to small customers.

To calculate market shares, the CRA team built databases of sales of consumable office supplies by competitor using product level data obtained from both a sample of Fortune 100 customers and a sample of competitors. The resulting analyses showed that Staples’ and Office Depot’s combined market shares and the level of concentration in the relevant market were well above the levels that would trigger the presumption that the merger would be anti-competitive. The CRA team also analyzed win/loss data to evaluate the intensity of head-to-head competition between the merging firms. CRA’s analyses demonstrated that the two firms competed frequently with each other, providing customers with significant leverage in price negotiations, and that remaining competitors were unlikely to replicate this competition and the leverage it afforded customers.

“This project encapsulates the ability of CRA’s antitrust economists to apply sophisticated analysis in complex questions about market competition. In his opinion, Judge Emmet G. Sullivan cited Professor Shapiro numerous times and adopted Professor Shapiro’s testimony on all critical antitrust issues in the case including market definition and market shares,” said CRA's President and Chief Executive Officer Paul Maleh.

Principal Bharati Mandapati led a team of CRA economists supporting Carl Shapiro on the matter, including Principal Matthew Johnson, former Associate Principal Tina Lee, Associate Principal Marissa Beck, Senior Associate Hitesh Makhija, Consulting Associate Philip Taylor, Associate Andrew Goldstein, and Associate Duke Shao.

About CRA’s Antitrust & Competition Economics Practice
CRA’s competition economists provide economic analysis and testimony in competition matters around the world. Many have served in government antitrust agencies and are members of premier academic, economic, and law faculties. Their experience extends to many industries, including health care, energy, computer hardware/software, retailing, telecommunications, aerospace and defense, entertainment, transportation, natural resources, sports, chemicals, pharmaceuticals, financial services, and consumer products.

About Charles River Associates (CRA)
Charles River Associates® is a global consulting firm specializing in litigation, regulatory, financial, and management consulting. CRA advises clients on economic and financial matters pertaining to litigation and regulatory proceedings, and guides corporations through critical business strategy and performance-related issues. Since 1965, clients have engaged CRA for its unique combination of functional expertise and industry knowledge, and for its objective solutions to complex problems. Headquartered in Boston, CRA has offices throughout the world and celebrated its 50^th anniversary in 2015. Detailed information about Charles River Associates, a registered trade name of CRA International, Inc., is available at http://www.crai.com. Follow us on LinkedIn, Twitter, and Facebook.

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Source: Charles River Associates

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