Whole Foods Fights FTC Rules

MARK HAMSTRA

WASHINGTON — Whole Foods Market is seeking to garner support for its opposition to a proposed Federal Trade Commission regulation that would set a five-month time frame for the evidentiary hearing from the date of the complaint in certain proceedings, including merger cases.

The Austin, Texas-based company, which is still battling the FTC over its acquisition last year of Wild Oats Market, said it was also seeking to extend the comment period on the proposed regulation beyond the 30 days that the FTC has set, and is opposed to other aspects of the FTC proposal granting more authority to the FTC and to administrative law judges overseeing adjudicative proceedings.

Attorneys for Whole Foods said on a conference call last week that the company was undertaking this effort on principle, to protect other businesses in the future; most of the FTC's proposals have already been applied in the Whole Foods case, they said.

“We believe this kind of regulation could undermine mergers that could be beneficial to consumers,” said Eileen O'Connor, an attorney with Orrick, Herrington and Sutcliffe, Washington.

A spokesman for the FTC declined to comment, citing its ongoing case against Whole Foods. In its proposal, the FTC said among the reasons for the suggested changes were complaints that its proceedings have sometimes gone on too long, deterring some mergers and raising legal expenses.

O'Connor, the Whole Foods attorney, said most of the reasons the FTC cited for blocking the Wild Oats acquisition have not materialized — “Retail prices have gone down for very many items,” she said. She also said Whole Foods has invested about 200,000 hours in training Wild Oats employees and has spent $32 million improving stores. In addition, 23% of Wild Oats workers have seen their pay increase, and many are now receiving health insurance coverage who were not covered at Wild Oats.