Court Opinion

ID: 9852750
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:35:58.498233+00
Date Added: 2024-06-11T09:22:33.923142
License: Public Domain

TATEL, Circuit Judge,
concurring in the judgment.
I agree with my colleagues that the district court produced a thoughtful opinion under incredibly difficult circumstances, that this case presents a live controversy, and that the district court generally applied the correct standard in reviewing the Federal Trade Commission’s request for a preliminary injunction. I also agree with Judge Brown that the district court nonetheless erred in concluding that the FTC failed to “raise[ ] questions going to the merits so serious, substantial, difficult and doubtful as to make them fair ground for thorough investigation, study, deliberation and deter*1042mination by the FTC in the first instance and ultimately by the Court of Appeals.” FTC v. H.J. Heinz Co., 246 F.3d 708, 714-15 (D.C.Cir.2001). Specifically, I believe the district court overlooked or mistakenly rejected evidence supporting the FTC’s view that Whole Foods and Wild Oats occupy a separate market of “premium natural and organic supermarkets.”
I
“Section 7 of the Clayton Act prohibits acquisitions, including mergers, ‘where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.’ ” Id. at 713 (quoting 15 U.S.C. § 18). “Congress used the words ‘may be substantially to lessen competition,’ to indicate that its concern was with probabilities, not certainties.” Brown Shoe Co. v. United States, 370 U.S. 294, 323, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962).
When the FTC believes an acquisition violates section 7 and that enjoining the acquisition pending an investigation “would be in the interest of the public,” section 13(b) of the Federal Trade Commission Act authorizes the Commission to ask a federal district court to block the acquisition. 15 U.S.C. § 53(b); Heinz, 246 F.3d at 714. Because Congress concluded that the FTC — an expert agency acting on the public’s behalf — should be able to obtain injunctive relief more readily than private parties, it “incorporat[ed] a unique ‘public interest’ standard in 15 U.S.C. § 53(b), rather than the more stringent, traditional ‘equity’ standard for injunctive relief.” FTC v. Exxon Corp., 636 F.2d 1336, 1343 (D.C.Cir.1980) (citing H.R. Rep. No. 93-624, at 31 (1973), U.S.Code Cong. & Admin.News 1973, pp. 2417, 2533). Under this more lenient rule, a district court may grant the FTC’s requested injunction “[u]pon a proper showing that, weighing the equities and considering the Commission’s likelihood of ultimate success, such action would be in the public interest.” 15 U.S.C. § 53(b). In this circuit, “the standard for likelihood of success on the merits is met if the FTC ‘has raised questions going to the merits so serious, substantial, difficult and doubtful as to make them fair ground for thorough investigation, study, deliberation and determination by the FTC in the first instance and ultimately by the Court of Appeals.’ ” Heinz, 246 F.3d at 714-15 (quoting FTC v. Beatrice Foods Co., 587 F.2d 1225, 1229 (D.C.Cir.1978) (Appendix to Joint Statement of Judges MacKinnon & Robb)); accord FTC v. Freeman Hosp., 69 F.3d 260, 267 (8th Cir.1995); FTC v. Warner Commc’ns Inc., 742 F.2d 1156, 1162 (9th Cir.1984).
Critically, the district court’s task is not “to determine whether the antitrust laws have been or are about to be violated. That adjudicatory function is vested in the FTC in the first instance.” Heinz, 246 F.3d at 714 (quoting FTC v. Food Town Stores, Inc., 539 F.2d 1339, 1342 (4th Cir. 1976)). As Judge Posner has explained:
One of the main reasons for creating the Federal Trade Commission and giving it concurrent jurisdiction to enforce the Clayton Act was that Congress distrusted judicial determination of antitrust questions. It thought the assistance of an administrative body would be helpful in resolving such questions and indeed expected the FTC to take the leading role in enforcing the Clayton Act....
Hosp. Corp. of Am. v. FTC, 807 F.2d 1381, 1386 (7th Cir.1986).
The dissent accuses Judge Brown and me of “diluting] the standard for preliminary injunction relief in antitrust merger cases, such that the FTC ... need not establish a likelihood of success on the merits.” Dissenting Op. at 1059 (internal quotation marks omitted). This is baffling *1043given that our opinions scrupulously follow Heinz’s articulation of the likelihood-of-success standard, which even Whole Foods insists we apply, see Appellee’s Br. 32 (urging that “the district court performed the role Congress delegated” to it by “applying the standard of review this Court prescribed in Heinz ”). The Supreme Court’s recent decision in Munaf v. Geren, — U.S.-, 128 S.Ct. 2207, 171 L.Ed.2d 1 (2008), does nothing to undermine this precedent: it concerns the common law standard for preliminary injunctions, not section 13(b)’s “unique ‘public interest’ standard,” Exxon Corp., 636 F.2d at 1343. Cf Dissenting Op. at 1060. In his zeal to reach the merits and preempt the FTC, it is in fact our dissenting colleague who ignores both circuit precedent and section 13(b).
II
In this case the district court concluded that the FTC had failed to raise the “serious, substantial” questions necessary to show a likelihood of success on the merits. FTC v. Whole Foods Market, Inc., 502 F.Supp.2d 1, 49 (D.D.C.2007). Following the FTC’s lead, the court focused on defining the product market in which Whole Foods and Wild Oats operate, saying:
[I]f the relevant product market is, as the FTC alleges, a product market of “premium natural and organic supermarkets” ..., there can be little doubt that the acquisition of the second largest firm in the market by the largest firm in the market will tend to harm competition in that market. If, on the other hand, the defendants are merely differentiated firms operating within the larger relevant product market of “supermarkets,” the proposed merger will not tend to harm competition.
Whole Foods, 502 F.Supp.2d at 8. Thus, the “ ‘case hinge[d]’ — almost entirely — ‘on the proper definition of the relevant product market.’” Id. (quoting FTC v. Staples, Inc., 970 F.Supp. 1066, 1073 (D.D.C.1997)). And after reviewing the evidence, the district court concluded that “[t]here is no substantial likelihood that the FTC can prove its asserted product market and thus no likelihood that it can prove that the proposed merger may substantially lessen competition or tend to create a monopoly.” Id. at 49-50.
I agree with the district court that this “ ‘case hinges’ — almost entirely — ‘on the proper definition of the relevant product market,’ ” for if a separate natural and organic market exists, “there can be little doubt that the acquisition of the second largest firm in the market by the largest firm in the market will tend to harm competition in that market.” Id. at 8 (quoting Staples, 970 F.Supp. at 1073). But I respectfully part ways with the district court when it comes to assessing the FTC’s evidence in support of its contention that Whole Foods and Wild Oats occupy a distinct market. As the Supreme Court explained in Brown Shoe Co. v. United States: “The outer boundaries of a product market are determined by the reasonable interchangeability of use or the cross-elasticity of demand between the product itself and substitutes for it.” 370 U.S. at 325, 82 S.Ct. 1502. In this case the FTC presented a great deal of credible evidence — either unmentioned or rejected by the district court — suggesting that Whole Foods and Wild Oats are not “reasonably] inter-changeab[le]” with conventional supermarkets and do not compete directly with them.
To begin with, the FTC’s expert prepared a study showing that when a Whole Foods opened near an existing Wild Oats, it reduced sales at the Wild Oats store dramatically. See Expert Report of Kevin M. Murphy ¶¶ 48-49 & exhibit 3 (July 9, 2007) (“Murphy Report”). By contrast, when a conventional supermarket opened *1044near a Wild Oats store, Wild Oats’s sales were virtually unaffected. See id. This strongly suggests that although Wild Oats customers consider Whole Foods an adequate substitute, they do not feel the same way about conventional supermarkets. Rejecting this study, the district court explained that it was “unwilling to accept the assumption that the effects on Wild Oats from Whole Foods’ entries provide a mirror from which predictions can reliably be made about the effects on Whole Foods from Wild Oats’ future exits if this transaction occurs.” Whole Foods, 502 F.Supp.2d at 21. But even if exit and entry events differ, this evidence suggests that consumers do not consider Whole Foods and Wild Oats “reasonably] interchangeable]” with conventional supermarkets. Brown Shoe, 370 U.S. at 325, 82 S.Ct. 1502.
The FTC also highlighted Whole Foods’s own study — called “Project Goldmine” — showing what Wild Oats customers would likely do after the proposed merger in cities where Whole Foods planned to close Wild Oats stores. According to the study, the average Whole Foods store would capture most of the revenue from the closed Wild Oats store, even though virtually every city contained multiple conventional retailers closer to the shuttered Wild Oats store. See Murphy Report ¶ 70 & app. C; Rebuttal Expert Report of Kevin M. Murphy ¶¶ 31-32 (July 13, 2007) (“Murphy Rebuttal”). This high diversion ratio further suggests that many consumers consider conventional supermarkets inadequate substitutes for Wild Oats and Whole Foods. The district court cited the Project Goldmine study for the opposite conclusion, pointing only to cities in which Whole Foods expected to receive a low percentage of Wild Oats’s business. Whole Foods, 502 F.Supp.2d at 34. These examples, however, do not undermine the study’s broader conclusion that Whole Foods would capture most of the revenue from the closed Wild Oats, and the district court never mentioned the FTC expert’s testimony that the diversion ratio estimated here “is at least four times the diversion ratio[] needed to make a price increase of 5% profitable for a joint owner of the two stores.” Murphy Rebuttal ¶ 32. The dissent also ignores this testimony, saying incorrectly that the Project Goldmine study “says nothing about whether Whole Foods could impose a five percent or more price increase.” Dissenting Op. at 1056.
Several industry studies predating the merger also suggest that Whole Foods and Wild Oats never truly competed with conventional supermarkets. For example, a study prepared for Whole Foods by an outside consultant concludes that “[Whole Foods] will not encounter significant, if any, competition from leading mainstream retailersf] (Safeway, Wal-Mart, Costco, etc.) entry into organics.” Tinderbox Consulting, Exploring Private Label Organic Brands 4. Another study concludes that “[w]hile th[e] same consumer shops” at both “mainstream grocers such as Safeway” and “large-format natural foods store[s] such as Wild Oats or Whole Foods Market,” “they tend to shop at each for different things (e.g., Wild Oats for fresh and specialty items, Safeway for canned and packaged goods).” The HaRtman GRoup, ORGANIC 2006, at ch. 8, p. 1 (May 1, 2006). In addition, Wild Oats’s former CEO, Perry Odak, explained in a deposition why conventional stores have difficulty competing with Whole Foods and Wild Oats: if conventional stores offer a lot of organic products, they don’t sell enough to their existing customer base, leaving the stores with spoiled products and reduced profits. But if conventional stores offer only a narrow range of organic products, customers with a high demand for organic items refuse to shop there. Thus, “the conventionals have a very difficult time getting into this business.” Investigation*1045al Hearing of Perry Odak 77-78 (quoted in Murphy Report ¶77) (“Odak Hearing”). The district court mentioned none of this.
In addition to all this direct evidence that Whole Foods and Wild Oats occupy a separate market from conventional supermarkets, the FTC presented an enormous amount of evidence of “industry or public recognition” of the natural and organic market “as a separate economic entity”— one of the “practical indicia” the Supreme Court has said can be used to determine the boundaries of a distinct market. Brown Shoe, 370 U.S. at 325, 82 S.Ct. 1502. For example, dozens of record studies about the grocery store industry — including many prepared for Whole Foods or Wild Oats — distinguish between “traditional” or “conventional” grocery stores on the one hand and “natural food” or “organic” stores on the other. See, e.g., Food Mktg. Inst, U.S. GROCERY Shopper Trends 2007, at 20-22 (2007). Moreover, record evidence indicates that the Whole Foods and Wild Oats CEOs both believed that their companies occupied a market separate from the conventional grocery store industry. In an email to his company’s board, Whole Foods CEO John Mackey explained that “[Wild Oats] is the only existing company that has the brand and number of stores to be a meaningful springboard for another player to get into this space. Eliminating them means eliminating this threat forever, or almost forever.” Email from John Mackey to John Elstrott et al. (Feb. 15, 2007). Echoing this point, former Wild Oats CEO Perry Odak said that “there’s really only two players of any substance in the organic and all natural [market], and that’s Whole Foods and Wild Oats.... [TJhere’s really nobody else in that particular space.” Odak Hearing 58. Executives from several conventional retailers agreed, explaining that Whole Foods and Wild Oats are not “conventional supermarkets” because “they focus on a premium organic-type customer” and “don’t sell a lot of the things that ... a lot of people buy.” Dep. of Rojon Diane Hasker 128-29 (July 10, 2007) (“Hasker Dep.”). As Judge Bork explained, this evidence of “ ‘industry or public recognition of the submarket as a separate economic’ unit matters because we assume that economic actors usually have accurate perceptions of economic realities.” Rothery Storage & Van Co. v. Atlas Van Lines, Inc., 792 F.2d 210, 218 n. 4 (D.C.Cir.1986).
The FTC also presented strong evidence that Whole Foods and Wild Oats have “peculiar characteristics” distinguishing them from traditional supermarkets, another of the “practical indicia” the Supreme Court has said can be used to determine the boundaries of a distinct market. Brown Shoe, 370 U.S. at 325, 82 S.Ct. 1502. Most important, unlike traditional grocery stores, both Whole Foods and Wild Oats carry only natural or organic products. See http://www.wholefood smarket.com/products/index.html (“We carry natural and organic products ... unadulterated by artificial additives, sweeteners, colorings, and preservatives .... ”). Glossing over this distinction, the dissent says “the dividing line between ‘organic’ and conventional supermarkets has been blurred” because “[m]ost products that Whole Foods sells are not organic” while “conventional supermarkets” have begun selling more organic products. Dissenting Op. at 1054. But the FTC never defined its proposed market as “organic supermarkets,” it defined it as “premium natural and organic supermarkets.” And everything Whole Foods sells is natural and/or organic, while many of the things sold by traditional grocery stores are not. See, e.g., Hasker Dep. 130-34; http://www. wholefoodsmarket.com/products/ unacceptablefoodingredients.html (explaining that Whole Foods refuses to carry any food item containing one of dozens of “un*1046acceptable food ingredients,” ingredients that can be found in countless products at traditional grocery stores).
Insisting that all this evidence of a separate market is irrelevant, Whole Foods and the dissent argue that the FTC’s case must fail because the record contains no evidence that Whole Foods or Wild Oats charged higher prices in cities where the other was absent — i.e., where one had a local monopoly on the asserted natural and organic market — than they did in cities where the other was present. This argument is both legally and factually incorrect.
As a legal matter, although evidence that a company charges more when other companies in the alleged market are absent certainly indicates that the companies operate in a distinct market, see, e.g., Staples, 970 F.Supp. at 1075-77, that is not the only way to prove a separate market. Indeed, Brown Shoe lists “distinct prices” as only one of a non-exhaustive list of seven “practical indicia” that may be examined to determine whether a separate market exists. 370 U.S. at 325, 82 S.Ct. 1502. Furthermore, even if the FTC could prove a section 7 violation only by showing evidence of higher prices in areas where a company had a local monopoly in an alleged market, the FTC need not prove a section 7 violation to obtain a preliminary injunction; rather, it need only raise “serious, substantial” questions as to the merger’s legality. Heinz, 246 F.3d at 714. Thus, the dissent misses the mark when it cites the FTC’s Horizontal Merger Guidelines to suggest that the Commission may obtain a preliminary injunction only by “mak[ing] a sufficient showing that the merged company could ... profitably impose a significant and nontransitory increase in price” of 5% or more. Dissenting Op. at 1052 (internal quotation marks omitted). Such evidence in a case like this, which turns entirely on market definition, would be enough to prove a section 7 violation in the FTC’s administrative proceeding. See Hosp. Corp., 807 F.2d at 1389 (stating that “[a]ll that is necessary” to prove a section 7 case “is that the merger create an appreciable danger of [higher prices] in the future”). Yet our precedent clearly holds that to obtain a preliminary injunction “[t]he FTC is not required to establish that the proposed merger would in fact violate section 7 of the Clayton Act.” Heinz, 246 F.3d at 714. Moreover, the Merger Guidelines — which “are by no means to be considered binding on the court,” FTC v. PPG Indus., Inc., 798 F.2d 1500, 1503 n. 4 (D.C.Cir.1986)— specify how the FTC decides which cases to bring, “not ... how the Agency will conduct the litigation of cases that it decides to bring,” Horizontal Merger Guidelines § 0.1 (emphasis added); see also id. (“[T]he Guidelines do not attempt to assign the burden of proof, or the burden of coming forward with evidence, on any particular issue.”).
In any event, the FTC did present evidence indicating that Whole Foods and Wild Oats charged more when they were the only natural and organic supermarket present. The FTC’s expert looked at prices Whole Foods charged in several of its North Carolina stores before and after entry of a regional natural food chain called Earth Fare. Before any Earth Fare stores opened, Whole Foods charged essentially the same prices at its five North Carolina stores, but when an Earth Fare opened near the Whole Foods in Chapel Hill, that store’s prices dropped 5% below those at the other North Carolina Whole Foods. See Tr. of Mots. Hr’g, Morning Session 125-30 (July 31, 2007); Supplemental Rebuttal Expert Report of Kevin M. Murphy ¶¶2-6 (July 16, 2007) (“Murphy Supp.”). Prices at that store remained lower than at the other Whole Foods in North Carolina for nearly a year, *1047until just before the Earth Fare closed. See Murphy Supp. ¶¶ 4-5. Whole Foods followed essentially the same pattern when an Earth Fare opened near its stores in Raleigh and Durham — the company dropped prices at those stores but nowhere else in North Carolina. See id.; Tr. of Mots. Hr’g, Morning Session 127 (July 31, 2007). The FTC’s expert presented similar evidence regarding Whole Foods’s impact on Wild Oats’s prices, showing that a new Whole Foods store opening near a Wild Oats caused immediate and lasting reductions in prices at that Wild Oats store compared to prices at other Wild Oats stores. See Tr. of Mots. Hr’g, Morning Session 132 (July 31, 2007); Murphy Report ¶¶ 57-59 & exhibit 5. In addition to this quantitative evidence, the FTC pointed to Whole Foods CEO John Mackey’s statement explaining to the company’s board why the merger made sense: “By buying [Wild Oats] we will ... avoid nasty price wars in [several cities where both companies have stores].” Email from John Mackey to John Elstrott et al. (Feb. 15, 2007).
The dissent raises two primary arguments against this pricing evidence. First, it relies on a study by Whole Foods’s expert to conclude that Whole Foods’s prices remain steady regardless of the presence or absence of a nearby Wild Oats, Dissenting Op. at 1053, calling this “all-but-dispositive price evidence,” id. at 1053. In fact, this study is all-but-meaningless price evidence because it examined Whole Foods’s pricing on a single day several months after the company announced its intent to acquire Wild Oats; this gave the company every incentive to eliminate any price differences that may have previously existed between its stores based on the presence of a nearby Wild Oats, not only to avoid antitrust liability, but also because the company was no longer competing with Wild Oats. See Hosp. Corp., 807 F.2d at 1384 (“[E]vidence that is subject to manipulation by the party seeking to use it is entitled to little or no weight.”). Second, the dissent asserts that all Mackey’s statements are irrelevant because — it claims — anticompetitive “intent is not an element of a § 7 claim.” Dissenting Op. at 1057. But the Supreme Court has clearly said that “evidence indicating the purpose of the merging parties, where available, is an aid in predicting the probable future conduct of the parties and thus the probable effects of the merger.” Brown Shoe, 370 U.S. at 329 n. 48, 82 S.Ct. 1502 (emphasis added); see also 4A Phillip E. Areeda et al., Antitrust Law ¶ 964a (2d ed. 2006) (“[E]vidence of anticompetitive intent cannot be disregarded.”).
To be sure, the pricing evidence here is unquestionably less compelling than the pricing evidence in some other cases, and perhaps this will make a difference in the Commission’s ultimate evaluation of this merger. Cf. Staples, 970 F.Supp. at 1075-77 (showing price differences of up to 13% where competitors were absent). But at this preliminary, pre-hearing stage, the pricing evidence here, together with the other evidence described above, is certainly enough to raise “serious, substantial” questions that are “fair ground for thorough investigation, study, deliberation, and determination by the FTC.” Heinz, 246 F.3d at 714-15.
Attempting to make these serious questions disappear, Whole Foods points to evidence the district court cited in concluding that the FTC could never prove a separate natural and organic market. That evidence, however, fails to overcome the “serious, substantial” questions the FTC’s evidence raises.
To begin with, the district court relied on a study by a Whole Foods expert concluding that the post-merger company would be unable to impose a statistically significant non-transitory increase in price *1048because the “actual loss” from such an increase would exceed the “critical loss”— the point at which the revenue gained from raising prices equals the revenue lost from reduced sales. The FTC’s expert, however, reached the exact opposite conclusion, finding that the combined company could impose a statistically significant non-transitory increase in price. Murphy Report ¶ 147. He also raised a number of criticisms of the Whole Foods expert’s study. Most important, he pointed out that the Whole Foods expert “provide[d] literally no quantitative evidence for the magnitude of the Actual Loss ... and no methodology for calculating the Actual Loss.” Murphy Rebuttal ¶ 11. He further argued that the Whole Foods expert’s study embodied a widely recognized flaw in critical loss analysis, namely that such analysis often overestimates actual loss when a company has high margins — which Whole Foods does. See id. ¶¶ 6-16 (explaining that when a company has high margins the critical loss is small, so one might predict an “Actual Loss greater than the Critical Loss,” but “this story is very incomplete because a high margin tends to imply a small Actual Loss” given that high margins suggest customers are price insensitive (quoting Michael L. Katz & Carl Shapiro, Further Thoughts on Critical Loss, AntitRust Source, March 2004, at 1, 2)); see also Daniel P. O’Brien & Abraham L. Wiekel-gren, A Critical Analysis of Critical Loss Analysis, 71 Antitrust L.J. 161, 162 (2003). In light of these cogent criticisms — which neither Whole Foods’s expert nor the district court ever addressed — this study cannot eliminate the “serious, substantial” questions the FTC’s evidence raises. Although courts certainly must evaluate the evidence in section 13(b) proceedings and may safely reject expert testimony they find unsupported, they trench on the FTC’s role when they choose between plausible, well-supported expert studies.
The district court next emphasized that when a new Whole Foods store opens, it takes business from conventional grocery stores, and even when an existing Wild Oats is nearby, most of the new Whole Foods store’s revenue comes from customers who previously shopped at conventional stores. According to the district court, this led “to the inevitable conclusion that Whole Foods’ and Wild Oats’ main competitors are other supermarkets, not just each other.” Whole Foods, 502 F.Supp.2d at 21. As the FTC points out, however, “an innovative [product] can create a new product market for antitrust purposes” by “satisfyfing] a previously-unsatisfied consumer demand.” Appellant’s Opening Br. 50. To use the Commission’s example, when the automobile was first invented, competing auto manufacturers obviously took customers primarily from companies selling horses and buggies, not from other auto manufacturers, but that hardly shows that ears and horse-drawn carriages should be treated as the same product market. That Whole Foods and Wild Oats have attracted many customers away from conventional grocery stores by offering extensive selections of natural and organic products thus tells us nothing about whether Whole Foods and Wild Oats should be treated as operating in the same market as conventional grocery stores. Indeed, courts have often found that sufficiently innovative retailers can constitute a distinct product market even when they take customers from existing retailers. See, e.g., Photovest Corp. v. Fotomat Corp., 606 F.2d 704, 712-14 (7th Cir.1979) (finding a distinct market of drive-up photo-processing companies even though such companies took photo-processing customers from drugstores, camera stores, and supermarkets); Staples, 970 F.Supp. at 1077 (finding a distinct market of office supply superstores even though such stores took sales primarily from mail-order *1049catalogues and stores carrying a broader range of merchandise).
The district court also cited evidence that Whole Foods compares its prices to those at conventional stores, not just natural foods stores. But nearly all of the items on which Whole Foods checks prices are dry grocery items, even though nearly 70% of Whole Foods’s revenue comes from perishables. Murphy Report ¶77. As Judge Brown’s opinion explains, this suggests that any competition between Whole Foods and conventional retailers may be limited to a narrow range of products that play a minor role in Whole Foods’s profitability. Op. at 1039.
Finally, the district court observed that more and more conventional stores are carrying natural and organic products, and that consumers who shop at Whole Foods and Wild Oats also shop at conventional stores. But as noted above, other record evidence suggests that although some conventional retailers are beginning to offer a limited range of popular organic products, they have difficulty competing with Whole Foods and Wild Oats. See Murphy Report ¶ 77. As Whole Foods CEO John Mackey put it: “[Wild Oats] is the only existing company that has the brand and number of stores to be a meaningful springboard for another player to get into this space. Eliminating them means eliminating this threat forever, or almost forever.” Email from John Mackey to John Elstrott et al. (Feb. 15, 2007) (emphasis added). Other studies show that “[w]hile th[e] same consumer shops” at both “mainstream grocers such as Safeway” and “large-format natural foods store[s] such as Wild Oats or Whole Foods,” “they tend to shop at each for different things.” The HáRtmaN GRoup, Organic 2006, at ch. 8, p. 1 (May 1, 2006); see also Photovest, 606 F.2d at 714 (“The law does not require an exclusive class of customers for each relevant submarket.”).
In sum, much of the evidence Whole Foods points to is either entirely unpersuasive or rebutted by credible evidence offered by the FTC. Of course, this is not to say that the FTC will necessarily be able to prove its asserted product market in an administrative proceeding: as the district court recognized, Whole Foods has a great deal of evidence on its side, evidence that may ultimately convince the Commission that no separate market exists. But at this preliminary stage, the FTC’s evidence plainly establishes a reasonable probability that it will be able to prove its asserted market, and given that this “ ‘case hinges’ — -almost entirely — ‘on the proper definition of the relevant product market,’ ” Whole Foods, 502 F.Supp.2d at 8 (quoting Staples, 970 F.Supp. at 1073), this is enough to raise “serious, substantial” questions meriting further investigation by the FTC, Heinz, 246 F.3d at 714.
Ill
Because we have decided that the FTC showed the requisite likelihood of success by raising serious and substantial questions about the merger’s legality, all that remains is to “weigh the equities in order to decide whether enjoining the merger would be in the public interest.” Id. at 726. Although in .some cases we have conducted this weighing ourselves, see, e.g., id. at 726-27, three factors lead me to agree with Judge Brown that the better course here is to remand to the district court for it to undertake this task. First, in cases in which we have weighed the equities, the district court had already done so, giving us the benefit of its fact-finding and reasoning. See, e.g., id. Here, by contrast, the district court never reached the equities and the parties have not briefed the issue, leaving us without the evidence needed to decide this question. See Whole Foods, 502 F.Supp.2d at 50. Second, this case stands in a unique *1050posture, for in cases where we reversed a district court’s denial of a section 13(b) injunction, either the district court or this court had enjoined the merger pending appeal. See Heinz, 246 F.3d at 713; PPG Indus., 798 F.2d at 1501 n. 1. Here, by contrast, the companies have already merged, and although this doesn’t moot the case, it may well affect the balance of the equities, likely requiring the district court to take additional evidence. Finally, given this case’s unique posture, the usual remedy in section 13(b) cases — blocking the merger — is no longer an option. Therefore, if the district court concludes that the equities tilt in the FTC’s favor, it will need to craft an alternative, fact-bound remedy sufficient to achieve section 13(b)’s purpose, namely allowing the FTC to review the transaction in an administrative proceeding and reestablish the premerger status quo if it finds a section 7 violation. To accomplish this, the district court could choose anything from issuing a hold separate order, see FTC v. Weyerhaeuser Co., 665 F.2d 1072, 1083-84 (D.C.Cir.1981), to enjoining further integration of the companies, to ordering the transaction partially or entirely rescinded, see FTC v. Elders Grain, 868 F.2d 901, 907-08 (7th Cir.1989) (Posner, J.). Without more facts, however, we are in no position to suggest which remedy is most appropriate.
Given the novel and significant task the district court faces on remand, I think it important to emphasize the principles that should guide its weighing of the equities. To begin with, as this court has held, “a likelihood of success finding weighs heavily in favor of a preliminary injunction blocking the acquisition,” Weyerhaeuser, 665 F.2d at 1085, “creating] a presumption in favor of preliminary injunctive relief,” Heinz, 246 F.3d at 726. That said, the district court must still weigh the public and private equities “to decide whether enjoining the merger would be in the public interest.” Id. “The principal public equity weighing in favor of issuance of preliminary injunctive relief is the public interest in effective enforcement of the antitrust laws.” Id. That is, because “[ajdministrative experience shows that the Commission’s inability to unscramble merged assets frequently prevents entry of an effective order of divestiture” after administrative proceedings, FTC v. Dean Foods Co., 384 U.S. 597, 607 n. 5, 86 S.Ct. 1738, 16 L.Ed.2d 802 (1966), the court must place great weight on the public interest in blocking a possibly anticompeti-tive merger before it is complete. Here, of course, the merger has already been consummated, although as the FTC points out, the process of combining the two companies is far from complete. Thus, the district court must consider the extent to which any of the remedial options mentioned above would make it easier for the FTC to separate Wild Oats and Whole Foods after the Commission’s administrative proceeding (should it find a section 7 violation) than it would be if the court did nothing. The court must then weigh this and any other equities opposing the merger against any public and private equities that support allowing the merger to proceed immediately.
In conducting this weighing, if Whole Foods can show no public equities in favor of allowing the merger to proceed immediately — such as increased employment or reduced prices — the district court should go no further, for “[w]hen the Commission demonstrates a likelihood of ultimate success, a countershowing of private equities alone [does] not suffice to justify denial of a preliminary injunction barring the merger.” Weyerhaeuser, 665 F.2d at 1083. But if Whole Foods can show some public equity favoring the merger, then the court should also consider private equities on Whole Foods’s side of the ledger, such as whether it would allow an otherwise failing firm to survive. That said, “[w]hile it is *1051proper to consider private equities in deciding whether to enjoin a particular transaction, we must afford such concerns little weight, lest we undermine section 13(b)’s purpose of protecting the public-at-large, rather than the individual private competitors.” Heinz, 246 F.3d at 727 n. 25 (quoting FTC v. Univ. Health, Inc., 938 F.2d 1206, 1225 (11th Cir.1991)) (internal quotation marks omitted). Moreover, “[w]e do not rank as a private equity meriting weight a mere expectation of private gain from a transaction the FTC has shown is likely to violate the antitrust laws.” Wey-erhaeuser, 665 F.2d at 1083 n. 26. In other words, even if allowing the merger to proceed would increase Whole Foods’s profits, that is irrelevant to the private equities under section 13(b).