U.S. Government Asked Amazon to Lie in Staples-Office Depot Merger Case, Judge Says

The U.S. government asked witnesses to lie to help it block a proposed merger between Staples and Office Depot, according to newly unsealed court documents.

In a hearing on the deal Wednesday, an executive at Amazon said that the Federal Trade Commission asked the ecommerce company to testify that it wouldn't be able to compete with the office suppliers until 2017, when in fact it has already entered that market. The FTC is trying to illustrate that the Staples and Office Depot deal would harm competition in the business supplies industry in an anti-trust case that the government brought in December in an attempt to prevent the merger.

While the hearing was supposed to be confidential, the federal judge presiding over the case insisted that those particular comments be made public. "The public ought to know that the government wanted Amazon to say some things that weren't true," Emmet Sullivan, U.S. District Judge for Washington, D.C., said, according to the court transcript unsealed Thursday.

The Amazon executive who testified was Prentis Wilson, vice president of Amazon Business, the ecommerce giant's online marketplace specializing in business and office supplies, which launched last year.

A Staples attorney pointed out that in Amazon's affidavit, the company had made line edits write noting that "the FTC has asked us to insert" a sentence saying it would not be able to offer office supplies contracts and next-day delivery to large business customers -- in other words, services competing with Staples and Office Depot -- for the next two years. "This is FTC's highest priority item," Amazon's affidavit said.

Amazon, however, refused to agree, and struck out the FTC's proposed language. "We were unwilling to say that, because we weren't sure if that was going to be true," Wilson testified. "We cannot commit to not having these available in two years."

Judge Sullivan pounced on Wilson's comments, grilling the witness on whether he was surprised the government would tell Amazon "what to say and not say" (Wilson said he was), and whether he was worried if "there might be repercussions or retaliation if you didn't say what the government wanted you to say." Wilson answered that he wasn't concerned that the government would punish him for refusing to comply, as long as he told the truth. "Good for you," the judge responded.

An FTC lawyer later told the judge that it "never asked" Amazon to say anything "that wasn't true," according to Bloomberg.

During the hearing, a Bank of America senior vice president also testified, but her comments remained redacted in the transcript.