Full opinion text
Opinion filed by Circuit Judge BROWN. Opinion concurring in the judgment filed by Circuit Judge TATEL. Dissenting opinion filed by Circuit Judge KAVANAUGH. BROWN, Circuit Judge. The FTC sought a preliminary injunction, under 15 U.S.C. § 53(b), to block the merger of Whole Foods and Wild Oats. It appeals the district court’s denial of the injunction. I conclude the district court should be reversed, though I do so reluctantly, admiring the thoughtful opinion the district court produced under trying circumstances in which the defendants were rushing to a financing deadline and the FTC presented, at best, poorly explained evidence. Nevertheless, the district court committed legal error in assuming market definition must depend on marginal consumers; consequently, it underestimated the FTC’s likelihood of success on the merits. I Whole Foods Market, Inc. (“Whole Foods”) and Wild Oats Markets, Inc. (“Wild Oats”) operate 194 and 110 grocery stores, respectively, primarily in the United States. In February 2007, they announced that Whole Foods would acquire Wild Oats in a transaction closing before August 31, 2007. They notified the FTC, as the Hart-ScottARodino Act required for the $565 million merger, and the FTC investigated the merger through a series of hearings and document requests. On June 6, 2007, the FTC sought a temporary restraining order and preliminary injunction to block the merger temporarily while the FTC conducted an administrative proceeding to decide whether to block it permanently under § 7 of the Clayton Act. The parties conducted expedited discovery, and the district court held a hearing on July 31 and August 1, 2007. The FTC contended Whole Foods and Wild Oats are the two largest operators of what it called premium, natural, and organic supermarkets (“PNOS”). Such stores “focus on high-quality perishables, specialty and natural organic produce, prepared foods, meat, fish[,] and bakery goods; generally have high levels of customer services; generally target affluent and well educated customers [and] ... are mission driven with an emphasis on social and environmental responsibility.” FTC v. Whole Foods Market, Inc., 502 F.Supp.2d 1, 28 (D.D.C.2007). In eighteen cities, asserted the FTC, the merger would create monopolies because Whole Foods and Wild Oats are the only PNOS. To support this claim, the FTC relied on emails Whole Foods’s CEO John Mackey sent to other Whole Foods executives and directors, suggesting the purpose of the merger was to eliminate a competitor. In addition the FTC produced pseudonymous blog postings in which Mr. Mackey touted Whole Foods and denigrated other supermarkets as unable to compete. The FTC’s expert economist, Dr. Kevin Murphy, analyzed sales data from the companies to show how entry by various supermarkets into a local market affected sales at a Whole Foods or Wild Oats store. On the other hand, the defendants’ expert, Dr. David Scheffman, focused on whether a hypothetical monopolist owning both Whole Foods and Wild Oats would actually have power over a distinct market. He used various third-party market studies to predict that such an owner could not raise prices without driving customers to other supermarkets. In addition, deposition testimony from other supermarkets indicated they regarded Whole Foods and Wild Oats as critical competition. Internal documents from the two defendants reflected their extensive monitoring of other supermarkets’ prices as well as each other’s. The district court concluded that PNOS was not a distinct market and that Whole Foods and Wild Oats compete within the broader market of grocery stores and supermarkets. Believing such a basic failure doomed any chance of the FTC’s success, the court denied the preliminary injunction without considering the balance of the equities. On August 17, the FTC filed an emergency motion for an injunction pending appeal, which this court denied on August 23. FTC v. Whole Foods Market, Inc., No. 07-5276 (D.C.Cir. Aug. 23, 2007). Freed to proceed, Whole Foods and Wild Oats consummated their merger on August 28. The dissent argues that a reversal today contradicts this earlier decision, but our standard of review then was very different, requiring the FTC to show “such a substantial indication of probable success” that there would be “justification for the court’s intrusion into the ordinary processes of ... judicial review.” Wash. Metro. Area Transit Comm’n v. Holiday Tours, Inc., 559 F.2d 841, 843 (D.C.Cir.1977). It is hardly remarkable that the FTC could fail to meet such a stringent standard and yet persuasively show the district court erred in applying the much less demanding § 53(b) preliminary injunction standard. II At the threshold, Whole Foods questions our jurisdiction to hear this appeal. The merger is a fait accompli, and Whole Foods has already closed some Wild Oats stores and sold others. In addition, Whole Foods has sold two complete lines of stores, Sun Harvest and Harvey’s, as well as some unspecified distribution facilities. Therefore, argues Whole Foods, the transaction is irreversible and the FTC’s request for an injunction blocking it is moot. Only in a rare case would we agree a transaction is truly irreversible, for the courts are “clothed with large discretion” to create remedies “effective to redress [antitrust] violations and to restore competition.” Ford Motor Co. v. United States, 405 U.S. 562, 573, 92 S.Ct. 1142, 31 L.Ed.2d 492 (1972). Indeed, “divestiture is a common form of relief’ from unlawful mergers. United States v. Microsoft Corp., 253 F.3d 34, 105 (D.C.Cir.2001) (en banc). Further, an antitrust violator “may ... be required to do more than return the market to the status quo ante.” Ford Motor, 405 U.S. at 573 n. 8 92 S.Ct. 1142. Courts may not only order divestiture but may also order relief “designed to give the divested [firm] an opportunity to establish its competitive position.” Id. at 575, 92 S.Ct. 1142. Even remedies which “entail harsh consequences” would be appropriate to ameliorate the harm to competition from an antitrust violation. United States v. E.I. du Pont de Nemours & Co., 366 U.S. 316, 327, 81 S.Ct. 1243, 6 L.Ed.2d 318 (1961). Of course, neither court nor agency has found Whole Foods’s acquisition of Wild Oats to be unlawful. Therefore, the FTC may not yet claim the right to have any remedy necessary to undo the effects of the merger, as it could after such a determination, du Pont, 366 U.S. at 334, 81 S.Ct. 1243. But the whole point of a preliminary injunction is to avoid the need for intrusive relief later, since even with the considerable flexibility of equitable relief, the difficulty of “unscrambl[ing] merged assets” often precludes “an effective order of divestiture,” FTC v. Dean Foods Co., 384 U.S. 597, 607 n. 5, 86 S.Ct. 1738, 16 L.Ed.2d 802 (1966). Section 53(b), codifying the ability of the FTC to obtain preliminary relief, FTC v. Weyerhaeuser Co., 665 F.2d 1072, 1082 (D.C.Cir.1981), preserves the “flexibility” of traditional “equity practice,” id. at 1084. At a minimum, the courts retain the power to preserve the status quo nunc, for example by means of a hold separate order, id., and perhaps also to restore the status quo ante. Thus, the courts have the power to grant relief on the FTC’s complaint, despite the merger’s having taken place, and this case is therefore not moot. See Byrd v. EPA 174 F.3d 239, 244 (D.C.Cir.1999) (“The availability of a partial remedy is sufficient to prevent [a] case from being moot.”). The fact that Whole Foods has sold some of Wild Oats’s assets does not change our conclusion. To be sure, we have no “authority to command return to the status quo,” Weyerhaeuser, 665 F.2d at 1077, in a literal way by forcing absent parties to sell those assets back to Whole Foods, but there is no reason to think that inability prevents us from mitigating the merger’s alleged harm to competition. The stores Whole Foods has sold are only those under the Harvey’s and Sun Harvest labels, which were never relevant to the anticompetitive harm the FTC fears. Our inability to command their return does not limit the relief available to the FTC. As to the distribution facilities, neither party has described what they are, suggested Wild Oats would not be a viable competitor without them, or explained why the district court could not order some provisional substitute. Moreover, the FTC is concerned about eighteen different local markets. If, as appears to be the situation, it remains possible to reopen or preserve a Wild Oats store in just one of those markets, such a result would at least give the FTC a chance to prevent a § 7 violation in that market. Ill “We review a district court order denying preliminary injunctive relief for abuse of discretion.” FTC v. H.J. Heinz Co., 246 F.3d 708, 713 (D.C.Cir.2001). However, if the district court’s decision “rests on an erroneous premise as to the pertinent law,” we will review the denial de novo “in light of the legal principles we believe proper and sound.” Id. Despite some ambiguity, the district court applied the correct legal standard to the FTC’s request for a preliminary injunction. The FTC sought relief under 15 U.S.C. § 53(b), which allows a district court to grant preliminary relief “[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.” The relief is temporary and must dissolve if more than twenty days pass without an FTC complaint. Id. Congress recognized the traditional four-part equity standard for obtaining an injunction was “not appropriate for the implementation of a Federal statute by an independent regulatory agency.” Heinz, 246 F.3d at 714. Therefore, to obtain a § 53(b) preliminary injunction, the FTC need not show any irreparable harm, and the “private equities” alone cannot override the FTC’s showing of likelihood of success. Weyerhaeuser, 665 F.2d at 1082-83. In deciding the FTC’s request for a preliminary injunction blocking a merger under § 53(b), a district court must balance the likelihood of the FTC’s success against the equities, under a sliding scale. See Heinz, 246 F.3d at 727; FTC v. Elders Grain, Inc., 868 F.2d 901, 903 (7th Cir.1989). The equities will often weigh in favor of the FTC, since “the public interest in effective enforcement of the antitrust laws” was Congress’s specific “public equity consideration” in enacting the provision. Heinz, 246 F.3d at 726. Therefore, the FTC will usually be able to obtain a preliminary injunction blocking a merger by “raising] questions going to the merits so serious, substantial, difficult[,] and doubtful as to make them fair ground for thorough investigation.” Heinz, 246 F.3d at 714-15. By meeting this standard, the FTC “creates a presumption in favor of preliminary injunctive relief,” id. at 726; but the merging parties may rebut that presumption, requiring the FTC to demonstrate a greater likelihood of success, by showing equities weighing in favor of the merger, Weyerhaeuser, 665 F.2d at 1087. Conversely, a greater likelihood of the FTC’s success will militate for a preliminary injunction unless particularly strong equities favor the merging parties. See Heinz, 246 F.3d at 727; Elders Grain, 868 F.2d at 903. In any case, a district court must not require the FTC to prove the merits, because, in a § 53(b) preliminary injunction proceeding, a court “is not authorized to determine whether the antitrust laws ... are about to be violated.” FTC v. Food Town Stores, Inc., 539 F.2d 1339, 1342 (4th Cir.1976). That responsibility lies with the FTC. Id. Not that the court may simply rubber-stamp an injunction whenever the FTC provides some threshold evidence; it must “exercise independent judgment” about the questions § 53(b) commits to it. Weyerhaeuser, 665 F.2d at 1082. Thus, the district court must evaluate the FTC’s chance of success on the basis of all the evidence before it, from the defendants as well as from the FTC. See FTC v. Beatrice Foods Co., 587 F.2d 1225, 1229-30 (D.C.Cir.1978) (App’x to Stmt, of MacKinnon & Robb, JJ.) (“[W]e are also required to consider the inroads that the appellees’ extensive showing has made ... [S]everal basic contentions of the FTC are called into serious question.”). The district court should bear in mind the FTC will be entitled to a presumption against the merger on the merits, see Elders Grain, 868 F.2d at 906, and therefore does not need detailed evidence of anti-competitive effect at this preliminary phase. Nevertheless, the merging parties are entitled to oppose a § 53(b) preliminary injunction with their own evidence, and that evidence may force the FTC to respond with a more substantial showing. The district court did not apply the sliding scale, instead declining to consider the equities. To be consistent with the § 53(b) standard, this decision must have rested on a conviction the FTC entirely failed to show a likelihood of success. Indeed, the court concluded “the relevant product market in this case is not premium natural and organic supermarkets ... as argued by the FTC but ... at least all supermarkets.” Whole Foods, 502 F.Supp.2d at 34. It also observed that several supermarkets “have already repositioned themselves to compete vigorously with Whole Foods and Wild Oats for the consumers’ premium natural and organic food business.” Id. at 48. Thus, considering the defendants’ evidence as well as the FTC’s, as it was obligated to do, the court was in no doubt that this merger would not substantially lessen competition, because it found the evidence proved Whole Foods and Wild Oats compete among supermarkets generally. If, and only if, the district court’s certainty was justified, it was appropriate for the court not to balance the likelihood of the FTC’s success against the equities. rv However, the court’s conclusion was in error. The FTC contends the district court abused its discretion in two ways: first, by treating market definition as a threshold issue; and second, by ignoring the FTC’s main evidence. The district court acted reasonably in focusing on the market definition, but it analyzed the product market incorrectly. A First, the FTC complains the district court improperly focused on whether Whole Foods and Wild Oats operate within a PNOS market. However, this was not an abuse of discretion given that the district court was simply following the FTC’s outline of the case. Inexplicably, the FTC now asserts a market definition is not necessary in a § 7 case, Appellant’s Br. 37-38, in contravention of the statute itself, see 15 U.S.C. § 18 (barring an acquisition “where in any line of commerce ... the effect of such acquisition may be substantially to lessen competition”); see also Brown Shoe Co. v. United States, 370 U.S. 294, 324, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962) (interpreting “any line of commerce” to require a “determination of the relevant market” to find “a violation of the Clayton Act”); Elders Grain, 868 F.2d at 906 (“[A]ll this assumes a properly defined market.”). The FTC suggests “market definition ... is a means to an end — to enable some measurement of market power — not an end in itself.” Appellant’s Br. 38 n. 26. But measuring market power is not the only purpose of a market definition; only “examination of the particular market — its structure, history[,] and probable future — can provide the appropriate setting for judging the probable anticompetitive effect of the merger.” Brown Shoe, 370 U.S. at 322 n. 38, 82 S.Ct. 1502. That is not to say market definition will always be crucial to the FTC’s likelihood of success on the merits. Nor does the FTC necessarily need to settle on a market definition at this preliminary stage. Although the framework we have developed for a -prima facie § 7 case rests on defining a market and showing undue concentration in that market, United States v. Baker Hughes Inc., 908 F.2d 981, 982-83 (D.C.Cir.1990), this analytical structure does not exhaust the possible ways to prove a § 7 violation on the merits, see, e.g., United States v. El Paso Natural Gas Co., 376 U.S. 651, 660, 84 S.Ct. 1044, 12 L.Ed.2d 12 (1964), much less the ways to demonstrate a likelihood of success on the merits in a preliminary proceeding. Section 53(b) preliminary injunctions are meant to be readily available to preserve the status quo while the FTC develops its ultimate case, and it is quite conceivable that the FTC might need to seek such relief before it has settled on the scope of the product or geographic markets implicated by a merger. For example, the FTC may have alternate theories of the merger’s anticompetitive harm, depending on inconsistent market definitions. While on the merits, the FTC would have to proceed with only one of those theories, at this preliminary phase it just has to raise substantial doubts about a transaction. One may have such doubts without knowing exactly what arguments will eventually prevail. Therefore, a district court’s assessment of the FTC’s chances will not depend, in every ease, on a threshold matter of market definition. In this case, however, the FTC itself made market definition key. It claimed “[t]he operation of premium natural and organic supermarkets is a distinct ‘line of commerce’ within the meaning of Section 7,” and its theory of anticompetitive effect was that the merger would “substantially increase concentration in the operation of [PNOS].” Compl. ¶¶ 34, 43. Throughout its briefs, the FTC presented a straightforward § 7 case in which “whether the transaction creates an appreciable danger of anticompetitive effects ... depends upon ... [the] relevant product ... [and] geographic market ... and the transaction’s probable effect on competition in the product and geographic markets.” FTC’s Br. Mot. Prelim. Inj. 11-12. It purported to show “undue concentration in the relevant market,” as the mainstay of its case. Id. at 12. Because of the concentration in the supposed PNOS market, the FTC urged the district court to hold the merger “presumptively unlawful,” and this was its sole reason for blocking the merger. FTC’s Proposed Conclusions of Law ¶¶ 57-63, 99-108. At oral argument, the FTC’s counsel suggested it had other ideas about the anticompetitive effect of the merger even if its PNOS market definition is wrong; but the FTC never offered those ideas to the district court. It is incumbent on the parties to shape a case, and it was hardly an abuse of discretion for the district court to focus on the questions as the FTC presented them. B Thus, the FTC assumed the burden of raising some question of whether PNOS is a well-defined market. As the FTC presented its case, success turned on whether there exist core customers, committed to PNOS, for whom one should consider PNOS a relevant market. The district court assumed “the ‘marginal’ consumer, not the so-called ‘core’ or ‘committed’ consumer, must be the focus of any antitrust analysis.” Whole Foods, 502 F.Supp.2d at 17 (citing Horizontal Merger Guidelines, 57 Fed.Reg. 41,552 (1992)). To the contrary, core consumers can, in appropriate circumstances, be worthy of antitrust protection. See Horizontal Merger Guidelines § 1.12, 57 Fed.Reg. at 41,555 (explaining the possibility of price discrimination for “targeted buyers”). The district court’s error of law led it to ignore FTC evidence that strongly suggested Whole Foods and Wild Oats compete for core consumers within a PNOS market, even if they also compete on individual products for marginal consumers in the broader market. See, e.g., Appellant’s Br. 50, 53. A market “must include all products reasonably interchangeable by consumers for the same purposes.” Microsoft, 253 F.3d at 52. Whether one product is reasonably interchangeable for another depends not only on the ease and speed with which customers can substitute it and the desirability of doing so, see id. at 53-54, but also on the cost of substitution, which depends most sensitively on the price of the products. A broad market may also contain relevant submarkets which themselves “constitute product markets for antitrust purposes.” Brown Shoe, 370 U.S. at 325, 82 S.Ct. 1502. “The boundaries of such a submarket may be determined by examining such practical indicia as industry or public recognition of the submarket as a separate economic entity, the product’s peculiar characteristics and uses, unique production facilities, distinct customers, distinct prices, sensitivity to price changes, and specialized vendors.” Id. To facilitate this analysis, the Department of Justice and the FTC developed a technique called the SSNIP (“small but significant non-transitory increase in price”) test, which both Dr. Murphy and Dr. Scheffman used. In the SSNIP method, one asks whether a hypothetical monopolist controlling all suppliers in the proposed market could profit from a small price increase. Horizontal Merger Guidelines § 1. 11, 57 Fed.Reg. at 41,560-61. If a small price increase would drive consumers to an alternative product, then that product must be reasonably substitutable for those in the proposed market and must therefore be part of the market, properly defined. Id. Experts for the two sides disagreed about how to do the SSNIP of the proposed PNOS market. Dr. Scheffman used a method called critical loss analysis, in which he predicted the loss that would result when marginal customers shifted purchases to conventional supermarkets in response to a SSNIP. Whole Foods, 502 F.Supp.2d at 18. He concluded a hypothetical monopolist could not profit from a SSNIP, so that conventional supermarkets must be within the same market as PNOS. In contrast, Dr. Murphy disapproved of critical loss analysis generally, preferring a method called critical diversion that asked how many customers would be diverted to Whole Foods and how many to conventional supermarkets if a nearby Wild Oats closed. Whole Foods’s internal planning documents indicated at least a majority of these customers would switch to Whole Foods, thus making the closure profitable for a hypothetical PNOS monopolist. One crucial difference between these approaches was that Dr. Seheffman’s analysis depended only on the marginal loss of sales, while Dr. Murphy’s used the average loss of customers. Dr. Murphy explained that focusing on the average behavior of customers was appropriate because a core of committed customers would continue to shop at PNOS stores despite a SSNIP. In appropriate circumstances, core customers can be a proper subject of antitrust concern. In particular, when one or a few firms differentiate themselves by offering a particular package of goods or services, it is quite possible for there to be a central group of customers for whom “only [that package] will do.” United States v. Grinnell Corp., 384 U.S. 563, 574, 86 S.Ct. 1698, 16 L.Ed.2d 778 (1966); see also United States v. Phillipsburg Nat’l Bank & Trust Co., 399 U.S. 350, 360, 90 S.Ct. 2035, 26 L.Ed.2d 658 (1970) (“[I]t is the cluster of products and services ... that as a matter of trade reality makes commercial banking a distinct” market.). What motivates antitrust concern for such customers is the possibility that “fringe competition” for individual products within a package may not protect customers who need the whole package from market power exercised by a sole supplier of the package. Grinnell, 384 U.S. at 574, 86 S.Ct. 1698. Such customers may be captive to the sole supplier, which can then, by means of price discrimination, extract monopoly profits from them while competing for the business of marginal customers. Cf. Md. People’s Counsel v. FERC, 761 F.2d 780, 786-87 (D.C.Cir.1985) (allowing natural gas pipelines to charge higher prices to captive customers would be anticompeti-tive). Not that prices that segregate core from marginal consumers are in themselves anticompetitive; such pricing simply indicates the existence of a submarket of core customers, operating in parallel with the broader market but featuring a different demand curve. See United States v. Rockford Mem’l Corp., 898 F.2d 1278, 1284 (7th Cir.1990). Sometimes, for some customers a package provides “access to certain products or services that would otherwise be unavailable to them.” Phillipsburg Nat’l Bank & Trust, 399 U.S. at 360, 90 S.Ct. 2035. Because the core customers require the whole package, they respond differently to price increases from marginal customers who may obtain portions of the package elsewhere. Of course, core customers may constitute a submarket even without such an extreme difference in demand elasticity. After all, market definition focuses on what products are reasonably substitutable; what is reasonable must ultimately be determined by “settled consumer preference.” United States v. Phila. Nat’l Bank, 374 U.S. 321, 357, 83 S.Ct. 1715, 10 L.Ed.2d 915 (1963). In short, a core group of particularly dedicated, “distinct customers,” paying “distinct prices,” may constitute a recognizable submarket, Brown Shoe, 370 U.S. at 325, 82 S.Ct. 1502, whether they are dedicated because they need a complete “cluster of products,” Phila. Nat’l Bank, 374 U.S. at 356, 83 S.Ct. 1715, because their particular circumstances dictate that a product “is the only realistic choice,” SuperTurf, Inc. v. Monsanto Co., 660 F.2d 1275, 1278 (8th Cir.1981), or because they find a particular product “uniquely attractive,” Nat’l Collegiate Athletic Ass’n v. Bd. of Regents of the Univ. of Okla., 468 U.S. 85, 112, 104 S.Ct. 2948, 82 L.Ed.2d 70 (1984). For example, the existence of core customers dedicated to office supply superstores, with their “unique combination of size, selection, depth[,] and breadth of inventory,” was an important factor distinguishing that submarket. FTC v. Staples, Inc., 970 F.Supp. 1066, 1078-79 (D.D.C.1997). As always in defining a market, we must “take into account the realities of competition.” Weiss v. York Hosp., 745 F.2d 786, 826 (3d Cir. 1984). We look to the Brown Shoe indicia, among which the economic criteria are primary, see Rothery Storage & Van Co. v. Atlas Van Lines, Inc., 792 F.2d 210, 219 n. 4 (D.C.Cir.1986). The FTC’s evidence delineated a PNOS submarket catering to a core group of customers who “have decided that natural and organic is important, lifestyle of health and ecological sustainability is important.” Whole Foods, 502 F.Supp.2d at 23 (citing Hr’g Tr. 43^4, Aug. 1, 2007). It was undisputed that Whole Foods and Wild Oats provide higher levels of customer service than conventional supermarkets, a “unique environment,” and a particular focus on the “core values” these customers espoused. Id. The FTC connected these intangible properties with concrete aspects of the PNOS model, such as a much larger selection of natural and organic products, FTC’s Proposed Findings of Fact 13-14 & ¶ 66 (noting Earth Fare, a PNOS, carries “more than 45,000 natural and organic SKUs”) and a much greater concentration of perishables than conventional supermarkets, id. 14-15 & ¶ 69-70 (“Over 60% of Wild Oats’ revenues” and “[n]early 70% of Whole Foods sales are natural or organic perishables.”). See also Whole Foods, 502 F.Supp.2d at 22-23 (citing defendants’ depositions as evidence of Whole Foods’s and Wild Oats’s focus on “high-quality perishables” and a large variety of products). Further, the FTC documented exactly the kind of price discrimination that enables a firm to profit from core customers for whom it is the sole supplier. Dr. Murphy compared the margins of Whole Foods stores in cities where they competed with Wild Oats. He found the presence of a Wild Oats depressed Whole Foods’s margins significantly. Notably, while there was no effect on Whole Foods’s margins in the product category of “groceries,” where Whole Foods and Wild Oats compete on the margins with conventional supermarkets, the effect on margins for perishables was substantial. Confirming this price discrimination, Whole Foods’s documents indicated that when it price-checked conventional supermarkets, the focus was overwhelmingly on “dry grocery,” rather than on the perishables that were 70% of Whole Foods’s business. Thus, in the high-quality perishables on which both Whole Foods and Wild Oats made most of their money, they competed directly with each other, and they competed with supermarkets only on the dry grocery items that were the fringes of their business. Additionally, the FTC provided direct evidence that PNOS competition had a greater effect than conventional supermarkets on PNOS prices. Dr. Murphy showed the opening of a new Whole Foods in the vicinity of a Wild Oats caused Wild Oats’s prices to drop, while entry by non-PNOS stores had no such effect. Similarly, the opening of Earth Fare stores (another PNOS) near Whole Foods stores caused Whole Foods’s prices to drop immediately. The price effect continued, while decreasing, until the Earth Fare stores were forced to close. Finally, evidence of consumer behavior supported the conclusion that PNOS serve a core consumer base. Whole Foods’s internal projections, based on market experience, suggested that if a Wild Oats near a Whole Foods were to close, the majority (in some cases nearly all) of its customers would switch to the Whole Foods rather than to conventional supermarkets. Since Whole Foods’s prices for perishables are higher than those of conventional supermarkets, such customers must not find shopping at the latter interchangeable with PNOS shopping. They are the core customers. Moreover, market research, including Dr. Scheffman’s own studies, indicated 68% of Whole Foods customers are core customers who share the Whole Foods “core values.” FTC Proposed Findings of Fact ¶ 135. Against this conclusion the defendants posed evidence that customers “cross-shop” between PNOS and other stores and that Whole Foods and Wild Oats check the prices of conventional supermarkets. Whole Foods, 502 F.Supp.2d at 30-32. But the fact that PNOS and ordinary supermarkets “are direct competitors in some submarkets ... is not the end of the inquiry,” United States v. Conn. Nat’l Bank, 418 U.S. 656, 664 n. 3, 94 S.Ct. 2788, 41 L.Ed.2d 1016 (1974). Of course customers cross-shop; PNOS carry comprehensive inventories. The fact that a customer might buy a stick of gum at a supermarket or at a convenience store does not mean there is no definable groceries market. Here, cross-shopping is entirely consistent with the existence of a core group of PNOS customers. Indeed, Dr. Murphy explained that Whole Foods competes actively with conventional supermarkets for dry groceries sales, even though it ignores their prices for high-quality perishables. In addition, the defendants relied on Dr. Scheffman’s conclusion that there is no “clearly definable” core customer. Whole Foods, 502 F.Supp.2d at 28. However, this conclusion was inconsistent with Dr. Scheffman’s own report and testimony. Market research had found that customers who shop at Whole Foods because they share the core values it champions constituted at least a majority of its customers. Scheffman Expert Report 56-57. Moreover, Dr. Scheffman acknowledged “there are core shoppers [who] will only buy organic and natural” and for that reason go to Whole Foods or Wild Oats. Hr’g Tr. 31, July 31, 2007. He contended they could be ignored because the numbers are not “substantial.” Id. Again, Dr. Scheffman’s own market data undermined this assertion. In sum, the district court believed the antitrust laws are addressed only to marginal consumers. This was an error of law, because in some situations core consumers, demanding exclusively a particular product or package of products, distinguish a submarket. The FTC described the core PNOS customers, explained how PNOS cater to these customers, and showed these customers provided the bulk of PNOS’s business. The FTC put forward economic evidence — which the district court ignored — showing directly how PNOS discriminate on price between their core and marginal customers, thus treating the former as a distinct market. Therefore, I cannot agree with the district court that the FTC would never be able to prove a PNOS submarket. This is not to say the FTC has in fact proved such a market, which is not necessary at this point. To obtain a preliminary injunction under § 53(b), the FTC need only show a likelihood of success sufficient, using the sliding scale, to balance any equities that might weigh against the injunction. V It remains to address the equities, which the district court did not reach, and see whether for some reason there is a balance against the FTC that would require a greater likelihood of success. The FTC urges us to carry out the rest of this determination, but “[w]e believe the proper course of action at this point is to remand to the district court, Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290, 304 (D.C.Cir.2006).” Since the district court “expressly withheld consideration,” id. at 305, of the equities, we have not had the benefit of its findings. Although the equities in a § 53(b) preliminary injunction proceeding will usually favor the FTC, Heinz, 246 F.3d at 726, the district court must independently exercise its discretion considering the circumstances of this case, including the fact that the merger has taken place. The district court should remember that a “risk that the transaction will not occur at all,” by itself, is a private consideration that cannot alone defeat the preliminary injunction. See id.; Weyerhaeuser, 665 F.2d at 1082-83. I appreciate that the district court expedited the proceeding as a courtesy to the defendants, who wanted to consummate their merger just thirty days after the hearing, Whole Foods, 502 F.Supp.2d at 4, but the court should have taken whatever time it needed to consider the FTC’s evidence fully. For the reasons stated above, the district court’s conclusion that the FTC showed no likelihood of success in an eventual § 7 case must, be reversed and remanded for proceedings consistent with this opinion. So ordered. . For example, a merger between two close competitors can sometimes raise antitrust concerns due to unilateral effects in highly differentiated markets. See generally Horizontal Merger Guidelines, 57 Fed.Reg. 41,-552, 41,560-61, § 2.2 (1992). In such a situation, it might not be necessary to understand the market definition to conclude a preliminary injunction should issue. The FTC alludes to this theory on appeal, but to the district court it argued simply that the merger would result in a highly concentrated PNOS market. . Dr. Scheffman did not actually calculate the amount of this loss. He simply predicted that because many Whole Foods and Wild Oats customers also shop at conventional supermarkets, the loss would at any rate be too large.
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 determination 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 given 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 near 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.” Investigational 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 “unacceptable 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, until 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 because 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