What a Waste

The federal judges who ride the District of Columbia circuit of the United States Court of Appeals have until noon today to issue an injunction blocking a merger between Whole Foods and Wild Oats, reports the Wall Street Journal. A district court judge, Paul Friedman, a Clinton appointee, last week rejected a request by the Federal Trade Commission to block the merger. In an editorial on June 8, "Wild Oats," we called the FTC's attempt to stop the deal "a waste of federal resources" and an example of "regulatory overreach." We're pleased to see that Judge Friedman agreed with us.

Republicans and conservatives paid a lot of attention when Attorney General Spitzer's prosecution of Theodore Sihpol failed in court; the judicial okay given to the Whole Foods-Wild Oats merger is a similar signal event. It makes the Bush-appointed chairman of the FTC, Deborah Platt Majoras, look like a Bush-appointed Spitzer. The right move for the FTC now would be to cut its losses and quit trying to block this merger.

The FTC's "competition director," Jeffrey Schmidt, responded to the commission's loss in court by issuing a press release insisting that the merger would "most likely result in higher prices and reduced choices for consumers who shop at premium natural and organic supermarkets." If Ms. Majoras really believes that, nothing is stopping her from shopping somewhere else or from seizing the opportunity created by the supposedly artificially high prices to open up her own low-priced premium natural and organic supermarket. That would be a free-market approach to anti-trust enforcement, rather than the heavy-handed legalistic approach that has been on display so far against Whole Foods and Wild Oats.