[Federal Register Volume 91, Number 88 (Thursday, May 7, 2026)]
[Notices]
[Pages 24867-24872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-09021]
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FEDERAL TRADE COMMISSION
[File No. 251 0100]
365 Retail Markets and Cantaloupe; Analysis of Proposed Agreement
Containing Consent Orders To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement; request for comment.
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SUMMARY: The consent agreement in this matter settles alleged
violations of Federal law prohibiting unfair methods of competition.
The attached Analysis of Proposed Agreement Containing Consent Orders
to Aid Public Comment describes both the allegations in the complaint
and the terms of the consent order--embodied in the consent agreement--
that would settle these allegations.
DATES: Comments must be received on or before June 8, 2026.
ADDRESSES: Interested parties may file comments online or on paper by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Please write: ``365 Retail
Markets and Cantaloupe; File No. 251 0100'' on your comment and file
your comment online at https://www.regulations.gov by following the
instructions on the web-based form. If you prefer to file your comment
on paper, please mail your comment to the following address: Federal
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW,
Mail Stop H-144 (Annex K), Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing a consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of 30 days. The following
Analysis of Proposed Agreement Containing Consent Orders to Aid Public
Comment describes the terms of the consent agreement and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC website at
this web address: https://www.ftc.gov/news-events/commission-actions.
The public is invited to submit comments on this document. For the
Commission to consider your comment, we must receive it on or before
June 8, 2026. Write ``365 Retail Markets and Cantaloupe; File No. 251
0100'' on your comment. Your comment--including your name and your
State--will be placed on the public record of this proceeding,
including, to the extent practicable, on the https://www.regulations.gov website.
Because of the agency's heightened security screening, postal mail
addressed to the Commission will be delayed. We strongly encourage you
to submit your comments online through the https://www.regulations.gov
website. If you prefer to file your comment on paper, write ``365
Retail Markets and Cantaloupe; File No. 251 0100'' on your comment and
on the envelope, and mail your comment by overnight service to: Federal
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW,
Mail Stop H-144 (Annex K), Washington, DC 20580.
Because your comment will be placed on the publicly accessible
website at https://www.regulations.gov, you are solely responsible for
making sure your comment does not include any sensitive or confidential
information. In particular, your comment should not include sensitive
personal information, such as your or anyone else's Social Security
number; date of birth; driver's license number or other State
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure your comment does not include
sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2),
16 CFR 4.10(a)(2)--including competitively sensitive information such
as costs, sales statistics, inventories, formulas, patterns, devices,
manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies
[[Page 24868]]
the comment must include the factual and legal basis for the request
and must identify the specific portions of the comment to be withheld
from the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted on https://www.regulations.gov--as legally required by FTC
Rule 4.9(b)--we cannot redact or remove your comment from that website,
unless you submit a confidentiality request that meets the requirements
for such treatment under FTC Rule 4.9(c), and the General Counsel
grants that request.
Visit the FTC website at https://www.ftc.gov to read this document
and the news release describing this matter. The FTC Act and other laws
the Commission administers permit the collection of public comments to
consider and use in this proceeding, as appropriate. The Commission
will consider all timely and responsive public comments it receives on
or before June 8, 2026. For information on the Commission's privacy
policy, including routine uses permitted by the Privacy Act, see
https://www.ftc.gov/site-information/privacy-policy.
Analysis of Proposed Agreement Containing Consent Orders To Aid Public
Comment
The Federal Trade Commission (``Commission'') has accepted for
public comment, subject to final approval, an Agreement Containing
Consent Order (``Consent Agreement'') with Garage Topco LP, PEP VIII
Intermediate 7 L.P., and 365 Retail Markets, LLC. (collectively
``365'') and Cantaloupe, Inc. (``Cantaloupe''). The proposed Consent
Agreement is intended to remedy the anticompetitive effects that likely
would result from 365's proposed acquisition of Cantaloupe (the
``Proposed Transaction'').
The Commission alleges in its Complaint that the Proposed
Transaction, if consummated, would violate section 7 of the Clayton
Act, as amended, 15 U.S.C. 18, and section 5 of the Federal Trade
Commission Act, as amended, 15 U.S.C. 45, by lessening competition in
the U.S. market for micromarket kiosks and related software and
services. Separately, the Proposed Transaction may provide the merged
entity with the ability and incentive to inhibit necessary
interoperability between different products and services offered by its
competitors in unattended foodservice retail.
The Consent Agreement will remedy the alleged violations by
preserving the competition that would otherwise be eliminated by the
Proposed Transaction. Specifically, under the terms of the Consent
Agreement, 365 is required to divest the U.S. assets related to
Cantaloupe's Three Square Market business, which Cantaloupe obtained
through its recent acquisition of Three Square Market, Inc. (``Three
Square Market''). Additionally, the Consent Agreement requires 365 to
offer customers and third parties integrations with its software and
hardware on reasonable and non-discriminatory terms under specific
circumstances.
I. The Parties and the Proposed Transaction
365 is the largest provider of micromarket kiosks in the United
States. 365 is also a vertically integrated provider, selling not only
hardware kiosks and credit card terminals, but back-end software that
assists foodservice operators in inventory, pricing, and fulfillment
across their foodservice locations.
USA Technologies was founded in 1992 and rebranded as Cantaloupe in
2021. Cantaloupe is a leader in credit card point-of-sale readers
(``card readers''), which can be affixed to vending machines, or other
devices, such as amusement rides, to effectuate credit card payments on
these devices. Following its acquisition of Three Square Market in
December 2022, Cantaloupe is the second largest provider of micromarket
kiosks in the United States.
Pursuant to an Agreement and Plan of Merger executed on June 15,
2025, 365 plans to acquire the voting securities of Cantaloupe in an
all cash-transaction valued at approximately $848 million.
II. The Relevant Market and Related Products
The Complaint alleges the relevant market in which to analyze the
Proposed Transaction is the sale and provision of micromarket kiosks
and related software and services. The United States is the relevant
geographic market in which to assess the competitive effects of the
Proposed Transaction.
Micromarkets are essentially small unattended convenience stores
that are typically in high-trust locations like offices and breakrooms.
In contrast to traditional vending machines, micromarkets have open
shelves, allowing a wider inventory of differently sized items and
freshly prepared foods.
Micromarket kiosks are used in micromarkets to enable end users to
self-scan their selected items, facilitate the processing of credit
cards, and enable food service operators to track inventory sold. The
micromarket kiosks are commonly equipped with a screen, an embedded
user interface, and payment infrastructure to enable transactions
without the need for an attended cashier. Foodservice operators
purchase micromarket kiosks from vendors, such as 365 and Cantaloupe,
and pay these vendors recurring monthly usage fees as well as a
percentage of each transaction made on the device.
The Complaint alleges other point-of-sale devices are not
reasonable substitutes for micromarket kiosks. These other devices have
different feature sets, use cases, and/or are not equipped to integrate
with other back-end software needed by foodservice operators to manage
micromarkets, along with their other attended or unattended foodservice
retail locations.
Many foodservice operators use vending management software
(``VMS'') to centralize operations across all their unattended
foodservice locations. Akin to the brain of the foodservice operator's
operation, VMS allows foodservice operators to track sales, monitor
purchasing habits, manage inventory, measure theft rates, and set
dynamic pricing instantaneously across their entire portfolio of
unattended and attended retail devices, which may include traditional
vending machines, micromarket kiosks, smart coolers, and self-serve
dining points of sale. VMSs and vending hardware from different
providers are generally interoperable because the providers voluntarily
use industry-wide data standards defined by the National Automatic
Merchandising Association (``NAMA'').
Foodservice operators also often use warehouse management software
(``WMS'') to streamline inventory fulfillment among its various
locations. WMS uses data from a foodservice operator's VMS to determine
the type and quantity of products that need to be restocked at each
location. The software alerts drivers to fill their trucks with the
necessary inventory for each service location and optimizes routes to
ensure that they only bring the necessary items, and that they are
delivered timely. The connection between WMS and VMS is not governed by
an industry standard, but systems offered by different providers are
typically interoperable today.
IV. Market Structure
The Commission's Complaint alleges that Cantaloupe is 365's closest
competitor and most significant competitive threat in the sale and
[[Page 24869]]
provision of micromarket kiosks and related software and services.
Other competitors may offer micromarket kiosks, but many have a
negligible share of the relevant market and/or lack the significant
scale, scope, or core focus on micromarket kiosks to replicate the
current closeness of competition between 365 and Cantaloupe.
V. Competitive Effects
The Complaint alleges that the Proposed Transaction, if
consummated, may substantially lessen competition in the market for
micromarket kiosks and related software and services. Given 365's
dominant position in micromarkets and Cantaloupe's position as its
largest and most significant rival, the Complaint alleges that the
Proposed Transaction will decrease head-to-head competition and may
increase the likelihood that the merged entity unilaterally exercises
market power to further lessen competition.
Separately, the Complaint alleges that the Proposed Transaction may
provide the merged entity both the ability and incentive to inhibit the
interoperability between micromarket kiosks, card readers, VMS, and
WMS. Such an act would foreclose rivals from critical functionality and
force customers to change all hardware and software to obtain more
competitive offers or innovative features on a single product. The
Complaint alleges that this would substantially lessen competition,
including by increasing switching costs for foodservice operators.
VI. Entry Conditions
The Complaint alleges that entry into the U.S. market for
micromarket kiosks and related software and services would not be
timely, likely, or sufficient to deter or counteract the
anticompetitive effects of the Proposed Transaction.
VII. The Agreement Containing Consent Orders
The Consent Agreement addresses the competitive concerns raised by
the Proposed Transaction through both structural and behavioral
remedies. The Consent Agreement requires 365 to divest to Seaga
Manufacturing, Inc. (``Seaga'') the complete U.S. business of Three
Square Market. These assets include micromarket kiosks, smart coolers,
VMS, and WMS. The divestiture is designed to ensure that an independent
competitor can immediately provide integrated solutions comparable to
those offered by Cantaloupe prior to the Proposed Transaction.
Seaga, headquartered in Freeport, Illinois, is a leader in
manufacturing, design, engineering, and sales of vending technologies
and accessories. Although it does not currently compete with 365 in the
sale or provision of micromarket kiosks and related software and
services, it has operated in the unattended retail industry for over 36
years and has substantial experience in software and client support.
The Consent Agreement also requires 365 to provide hardware and
software integrations to customers and third parties on reasonable and
nondiscriminatory terms, as long as the customer or third party follows
NAMA standards, or any other standards in effect during the term of the
Consent Agreement. Additionally, it prohibits degradation of
established integrations and limits the merged entity's ability to use
confidential information obtained through integration processes. It
also requires continued adherence to consensus-based industry standards
where applicable.
The Consent Agreement also requires 365 to provide the Commission
with prior notice before acquiring any business or entity related to
micromarket kiosks in the United States.
The Commission will appoint Mr. Edward Buthusiem as the Monitor to
ensure that the parties comply with all their obligations pursuant to
the Consent Agreement, including the transfer of assets to Seaga and
interoperability commitments.
The Commission does not intend this analysis to constitute an
official interpretation of the proposed Order or to modify its terms in
any way.
By direction of the Commission.
April J. Tabor,
Secretary.
Statement of Commissioner Mark R. Meador
I vote to approve the Complaint and Consent Orders in this matter.
This transaction and the negotiated remedies represent a strong example
of the efficiency of the premerger review program and illustrates how
early, good-faith engagement can yield settlement outcomes that restore
competition and benefit consumers. The parties engaged with staff
promptly and constructively and worked cooperatively throughout the
investigation. As I have stated before, parties and counsel appearing
before the Commission have an obligation to operate in good faith. That
obligation was met here, which facilitated a remedy that fully
addressed the competitive concerns that staff identified during the
Commission's review of the proposed transaction.
The statement below elaborates on my views regarding why this
transaction--specifically, the use of serial acquisitions and the
potential threat for the merged firm to engage in exclusionary conduct
post-transaction given its existing dominant position--raises
competitive concerns that warrant significant scrutiny. It also
explains why the proposed remedy alleviates these concerns and how
different circumstances could have warranted a different outcome.
Industry Background
As alleged in the Commission's complaint, 365 Retail's proposed
acquisition of Cantaloupe, in its original form, would have
significantly strengthened 365 Retail's already dominant position of
more than a 70% share in the highly concentrated national market for
the sale and provision of micromarket kiosks and related software and
services to foodservice operators.\1\ The complaint further alleges
that the acquisition of Cantaloupe's software services, combined with
365 Retail's significant hardware assets, would have created a
substantial risk of foreclosure by providing 365 Retail with both the
incentive and the enhanced technical capability to exclude rivals by
limiting interoperability and other critical functionalities and making
it harder to switch providers.\2\
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\1\ Complaint ] 20, In re Garage Topco LP, PEP VIII Intermediate
7 L.P., 365 Retail Markets, LLC, and Cantaloupe, Inc., Matter No.
2510100 (May 1, 2026).
\2\ Id. ] 30.
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For context, micromarket kiosks are self-checkout point-of-sale
systems that allow customers to purchase items in unattended
micromarkets. Within this national market, the parties are significant
head-to-head competitors, with 365 Retail serving as the largest and
most established supplier.\3\
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\3\ Id. ]] 19-21.
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Operators in this market rely on multiple interconnected systems,
including kiosks where customers check out, payment systems, vendor
management software (VMS), and warehouse management software (WMS).
Many food service operators (FSOs) depend on the ability to mix and
match these components from different vendors so they can operate their
businesses efficiently and avoid becoming locked into a single
provider. Today, this interoperability exists mainly because firms
voluntarily support it, despite some, including 365 Retail, having the
technical ability to restrict it.\4\
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\4\ Id. ]] 30-31.
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[[Page 24870]]
FSOs with large portfolios of locations face significant costs and
disruptions when replacing kiosks. Small obstacles to interoperability
therefore can have outsized competitive effects. A weakened ability to
mix and match systems could make it harder for rival firms to compete.
As the range of workable options narrows, FSOs become more exposed to
increased fees, higher payment processing charges, or reduced service
quality. These added burdens would predictably be passed on to
consumers who rely on micromarkets for meals and snacks during the
workday.
Background on Proposed Remedies
The proposed remedy includes significant divestitures of kiosk
assets, the imposition of strict interoperability and nondiscrimination
requirements for certain hardware and software services, and a
requirement that 365 Retail provide transition services for a limited
period to the divestiture buyer, Seaga.
The order's provisions are designed to ensure that (1) Seaga is
well-positioned to compete and expand in the short term, and (2) the
merged firm cannot reduce interoperability or take other steps that
lock customers into its ecosystem or raise switching costs. My
assessment of these provisions, and how the proposed remedy package
addresses the competitive concerns presented by the transaction,
follows below.
Competitive Concerns
The competitive concerns raised by the proposed transaction are
outlined in the FTC complaint and the analysis section of the proposed
agreement containing consent orders to aid public comment. In short,
the complaint alleges that the transaction would eliminate head-to-head
competition between two of the largest suppliers of micromarket kiosks,
increase the risk of higher prices and reduced innovation, and give the
merged firm the ability and incentive to foreclose rivals by
restricting interoperability and access to essential software and
technology inputs.
Two additional issues raise unique legal questions that, in my
view, warrant further emphasis and attention.
First, the transaction takes place against the backdrop of a
pattern of serial acquisitions by 365 Retail, including acquisitions
that fell below HSR thresholds and its 2021 acquisition of Avanti. For
example, in the announcement video following the Avanti acquisition,
Joe Hessling, the Founder and CEO of 365 Retail, stated that the
transaction brought ``the three innovators in the space and the three
founders . . . all under one roof.'' \5\ This framing raises concerns
that 365 Retail has viewed acquisitions as a means to bring leading
competitors together under a single corporate structure in order to
enhance its already dominant market position. Accordingly, in reviewing
the proposed transaction and the proposed remedy package, it was
necessary to evaluate the proposed transaction not only on a standalone
basis, but also to consider the cumulative competitive effects of the
serial chain of acquisitions of which this transaction is a part.\6\ It
was further necessary to take into account any related conduct
undertaken by 365 Retail before this proposed acquisition to the extent
it could be analyzed as an anticompetitive course of conduct \7\ that
could violate section 7 of the Clayton Act \8\ and, potentially,
sections 1 \9\ and 2 \10\ of the Sherman Act (and, in turn, section 5
of the Federal Trade Commission Act).\11\
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\5\ 365 Retail Markets, We are ONE: 365 and Avanti Merge, at
3:05 (YouTube, Sep. 15, 2021), https://www.youtube.com/watch?v=kbay
X1LLjdk.
\6\ Fed. Trade Comm'n & U.S. Dep't of Justice, Merger Guidelines
Sec. Sec. 2.7, 2.8 (2023). The Commission and the courts have long
evaluated the cumulative competitive effects of serial acquisitions
rather than viewing each transaction in isolation. See, e.g.,Hosp.
Corp. of Am. v. FTC, 807 F.2d 1381, 1384-86 (7th Cir. 1986)
(evaluating the probable effects of a defendant's acquisitions of
several hospitals taken together); AshGrove Cement Co. v. FTC,
577F.2d1368, 1380 n.15 (9th Cir.1978) (explaining that the passage
of time does not mitigate the cumulative effects of successive
acquisitions); FTC v. Cardinal Health, Inc., 12 F. Supp. 2d 34, 66
(D.D.C. 1998) (evaluating the competitive effects of the proposed
transactions as a whole based their effect on concentration levels
and industry trends). The legislative history and public
understanding of the 1950 Celler-Kefauver amendments likewise
reflect concern with serial acquisitions and their aggregate effects
on competition. See Foremost Dairies, Inc., 60 F.T.C. 944, 1050-51,
1082 (1962); Earl W. Kintner et al., Federal Antitrust Law Sec.
40.5 (2d ed. 2026).
\7\ Even where earlier acquisitions are not independently
unlawful, they may still constitute part of an exclusionary course
of conduct relevant to section 7 and section 1 and 2 analyses.
Statement of the Federal Trade Commission at 3, In re Cardinal
Health, Inc. (Apr.17, 2015) (explaining that earlier acquisitions
can be ``initial steps in a monopolization scheme''); Beatrice Foods
Co., 67 F.T.C. 473, 726-27 (1965) (explaining that transactions can
be scrutinized as ``part of a series'' or as a ``course of
conduct''); cf. Continental Ore Co. v. Union Carbide Corp., 370 U.S.
690, 699 (1962) (faulting the appellate court for disregarding
evidence that the defendant had ``interfered with, acquired, or
destroyed'' independent sources of vanadium oxide through a
combination of acquisitions, supply-foreclosure arrangements, and
refusals to supply); Poller v. Columbia Broad. Sys., 368 U.S. 464,
468-69 (1962) (explaining that even if a termination of affiliation
rights and an acquisition were each lawful on their own, it could
violate the Sherman Act ``if such a cancellation and purchase were
part and parcel of unlawful conduct or agreement with others or were
conceived in a purpose to unreasonably restrain trade, control a
market, or monopolize''); United States v. Paramount Pictures, Inc.,
334 U.S. 131, 152 (1948) (``[E]ven if lawfully acquired,
[acquisitions] may have been utilized as part of the conspiracy to
eliminate or suppress competition. . . In that event divestiture
would likewise be justified.''); see also Aspen Skiing Co. v. Aspen
Highlands Skiing Corp., 472 U.S. 585, 599, 611 (1985) (affirming
verdict where the appellate court ``in its review of the evidence on
the question of intent . . . considered the record `as a whole' and
concluded that it was not necessary for Highlands to prove that each
allegedly anticompetitive act was itself sufficient to demonstrate
an abuse of monopoly power' '' (quoting Aspen Highlands Skiing Corp.
v. Aspen Skiing Co., 738 F.2d 1509, 1522 n.18 (10th Cir. 1984)).
\8\ 15 U.S.C. 18.
\9\ 15 U.S.C. 1; see also Organisation for Economic Co-operation
and Development [OECD], Working Party No. 3 on Co-operation and
Enforcement, Roundtable on the Standard for Merger Review, with a
Particular Emphasis on Country Experience with the Change of Merger
Review Standard from the Dominance Test to the SLC/SIEC Test, Note
by the United States, ] 12-13, DAF/COMP/WP3/WD(2009)5 (June 9,
2009), https://www.ftc.gov/system/files/attachments/us-submissions-oecd-2000-2009/mergerstandard.pdf (``It is now widely agreed that a
showing of likely anticompetitive effects suffice to establish a
violation of Section 1 [of the Sherman Act], just as it does under
the [substantially lessen competition] standard [of Section 7 of the
Clayton Act]''); Klor's, Inc. v. Broadway-Hale Stores, Inc., 359
U.S. 207, 213-14 (1959) (quoting Int'l Salt Co. v. United States,
332 U.S. 392, 396) (``the Sherman Act has consistently been read to
forbid all contracts and combinations `which ``tend to create a
monopoly,'' ' whether `the tendency is a creeping one' or `one that
proceeds at full gallop' '').
\10\ 15 U.S.C. 2. Modern courts in monopolization cases analyze
conduct holistically based on the evidence in the record taken as a
whole. See, e.g., Duke Energy Carolinas, LLC v. NTE Carolinas II
LLC, 111 F.4th 337, 354 (4th Cir. 2024) (``It is foundational that
alleged anticompetitive conduct must be considered as a whole.''),
cert. denied, 145 S. Ct. 2748 (2026); Sanofi-Aventis U.S., LLC v.
Mylan, Inc. (In re EpiPen (Epinephrine Injection, USP) Mktg., Sales
Pracs. & Antitrust Litig.), 44 F.4th 959, 982 (10th Cir. 2022)
(explaining that it was necessary to analyze each challenged
practice separately ``[f]or the sake of accuracy, precision, and
analytical clarity'' before evaluating whether the evidence ``in
totality'' demonstrated any ``synergistic effect'') (quoting Ne.
Tel. Co. v. Am. Tel. & Tel. Co., 651 F.2d 76, 95 n.28 (2d Cir.
1981)); In re Lipitor Antitrust Litig., 855 F.3d 126, 147 (3d Cir.
2017) (``courts must look to the monopolist's conduct taken as a
whole rather than considering each aspect in isolation'') (quoting
LePage's Inc. v. 3M, 324 F.3d 141, 146 (3d Cir. 2003)); Intergraph
Corp. v. Intel Corp., 195 F.3d 1346, 1367 (Fed. Cir. 1999) (``Each
legal theory must be examined for its sufficiency and applicability,
on the entirety of the relevant facts''); see also Viamedia, Inc. v.
Comcast Corp., 951 F.3d 429, 453 (7th Cir. 2020) (``a dominant
firm's conduct may be susceptible to more than one court-defined
category of anticompetitive conduct.''); New York v. Actavis PLC,
787 F.3d 638, 653-54 (2d Cir. 2015) (citations omitted) (explaining
that while product withdrawal or improvement alone may be legal,
``when a monopolist combines product withdrawal with some other
conduct, the overall effect of which is to coerce consumers rather
than persuade them on the merits, and to impede competition, its
actions are anticompetitive under the Sherman Act''); Conwood Co. v.
U.S. Tobacco Co., 290 F.3d 768, 783 (6th Cir. 2002) (concluding that
plaintiff presented evidence that defendant engaged in a
``systematic effort to exclude competition'' and rejecting
defendant's contention that its actions constituted ``isolated
sporadic torts.'').
\11\ 15 U.S.C. 45. The Commission's authority under section 5 of
the FTC Act extends to Sherman Act and Clayton Act conduct
violations. See, e.g., California Dental Ass'n v. FTC, 526 U.S. 756,
762 n.3 (1999); FTC v. Ind. Fed'n of Dentists, 476 U.S. 447, 454
(1986); FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 244 (1972);
FTC v. Cement Inst., 333 U.S. 683, 694 (1948) (``[A]ll conduct
violative of the Sherman Act may likewise come within the unfair
trade practice prohibitions of the Trade Commission Act''); Fashion
Originators' Guild of Am., Inc. v. FTC, 312 U.S. 457, 463 (1941)
(``If the purpose and practice of the combination of garment
manufacturers and their affiliates runs counter to the public policy
declared in the Sherman and Clayton Acts, the Federal Trade
Commission has the power to suppress it as an unfair method of
competition.'').
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[[Page 24871]]
Second, because 365 Retail already holds a dominant position in the
national sale and provision of micromarket kiosks and related software
and services to foodservice operators, the combination of 365 Retail's
hardware assets and Cantaloupe's software assets would give the merged
firm new and enhanced technical capabilities to restrict
interoperability between micromarket kiosks and deprive rivals of
access to functionalities essential for competitive offerings.\12\
Under established precedent, a dominant firm's acquisition of an
additional technical mechanism through which it could foreclose access
to critical inputs or raise barriers to entry can independently violate
section 7 of the Clayton Act, and potentially section 2 of the Sherman
Act. Specifically, the incipiency requirements of the Clayton Act
target acquisitions that place the acquiring firm in a unique position
to engage in exclusionary conduct,\13\ while the Sherman Act addresses
efforts by firms with monopoly power to use acquisitions to maintain a
dominant market position or obtain control over critical inputs as a
means of impeding actual or potential competition.\14\ Accordingly,
absent compelling evidence that the merged firm would lack an incentive
to pursue such a foreclosure strategy in the future, the transaction
may have the effect of substantially lessening competition in the short
and medium term by enabling the dominant firm to cut off access to
critical inputs rivals need to compete,\15\ or tend to create a
monopoly by raising barriers to entry in a manner that entrenches the
incumbent's already dominant position in a relevant market.\16\
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\12\ Fed. Trade Comm'n & U.S. Dep't of Justice, Merger
Guidelines Sec. 2.5.A.2, at 16 n.30 (2023) (``The Agencies will
generally infer, in the absence of countervailing evidence, that the
merging firm has or is approaching monopoly power in the related
product if it has a share greater than 50% of the related product
market. A merger involving a related product with share of less than
50% may still substantially lessen competition, particularly when
that related product is important to its trading partners.'').
\13\ FTC v. Procter & Gamble Co., 386 U.S. 568, 577 (1967)
(``[T]here is certainly no requirement that the anticompetitive
power manifest itself in anticompetitive action before Sec. 7 can
be called into play''); FTC v. Consol. Foods Corp., 380 U.S.592, 598
(1965) (``the force of Sec. 7 is still in probabilities, not in
what later transpired. That must necessarily be the case, for once
the two companies are united no one knows what the fate of the
acquired company and its competitors would have been but for the
merger.''); United States v. E.I. du Pont de Nemours & Co., 353 U.S.
586, 597 (1957) (``the Government may proceed at any time that an
acquisition may be said with reasonable probability to contain a
threat that it may lead to a restraint of commerce or tend to create
a monopoly of a line of commerce.''); Int'l Salt Co., 332U.S. at 396
(quoting 15 U.S.C. 18) (explaining that the law forbids agreements
that ``tend to create a monopoly'' and does not ``await arrival at
the goal before condemning the direction of the movement.''); see
also Cargill, Inc. v. Monfort of Colo., Inc., 479U.S.104, 121-22
(1986) (rejecting the argument that a plaintiff lacks standing to
challenge a merger that could likely enable the acquiring firm to
engage in future anticompetitive conduct such as predatory pricing).
\14\ See e.g., United States v. GrinnellCorp., 384 U.S. 563,573-
76 (1966); United States v. Am. Tobacco Co., 221 U.S. 106, 163, 184
(1911); Standard Oil Co. v. United States, 221U.S.1, 75 (1911).
\15\ Fed. Trade Comm'n & U.S. Dep't of Justice, Merger
Guidelines Sec. 2.5 (2023).
\16\ Id. at Sec. 2.6; see also David Lawrence, The Merger-
Monopolization Gap, 101 N.Y.U. L. Rev. (forthcoming 2026)
(manuscript at 62-63), https://ssrn.com/abstract=6315858 (reviewing
the text, legislative history, and Supreme Court precedent
interpreting section 7 and concluding that the statute reaches
mergers that allow a firm to entrench its dominant position by
positioning it to engage in exclusionary conduct).
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Evaluation of the Proposed Remedies
In evaluating the proposed remedy, I apply the same principles I
have previously articulated regarding effective merger settlements.
To reiterate, remedies remain an important part of the merger-
enforcement toolkit.\17\ They allow transactions to proceed under
conditions of transparency and accountability, and enable the
Commission to use its expertise to ensure remedies remain tailored to
mitigate any potential competition concerns.\18\ Consumers benefit from
competition that remains intact, and parties can pursue transactions
that create new growth opportunities that do not harm competition,
while the business community benefits from the efficient operation of
the merger review program. Where resolution is available, it can
conserve time and resources for both the agency and the parties in a
manner fully consistent with the Commission's mandate to protect
competition and consumers. Importantly, merger settlements can serve a
fundamental law enforcement function by preventing violations of the
antitrust laws and arresting unlawful conduct in its incipiency.
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\17\ See Statement of Chairman Andrew N. Ferguson Joined by
Commissioner Melissa Holyoak and Commissioner Mark R. Meador, In re
Synopsys, Inc. and ANSYS, Inc. (May 28, 2025); Statement of
Commissioner Mark R. Meador, In re Alimentation Couche-Tard, Inc.
and Giant Eagle, Inc. (June 26, 2025) [hereinafter Meador ACT/Giant
Eagle Statement].
\18\ Statement of Commissioner Mark R. Meador at 2-3, In re
Synopsys, Inc and ANSYS, Inc. (Oct. 17, 2025).
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But remedies must work in practice. When meaningful uncertainty
remains about whether competition will be restored, that uncertainty
must be resolved in favor of consumers.\19\ In those circumstances, we
should be prepared to litigate. The text, statutory framework, and
legislative history underlying the antitrust laws and FTC Act confirm
that the antitrust laws are more concerned with underenforcement than
overenforcement.\20\ That Congressional directive must continue to
drive enforcement and settlement decisions.
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\19\ Meador ACT/Giant Eagle Statement, supra note 17, at 2.
\20\ Mark Meador, Antitrust Policy for the Conservative 25 (Fed.
Trade Comm'n May 1, 2025), https://www.ftc.gov/system/files/ftc_gov/pdf/antitrust-policy-for-the-conservative-meador.pdf.
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There should be a strong preference for clean divestitures of
standalone business lines that avoid entanglements which require
ongoing Commission oversight. Parties must also approach the Commission
early, candidly, and in good faith, and be prepared to propose a
credible divestiture buyer with the financial capability, operational
readiness, and industry expertise necessary to restore competition.\21\
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\21\ Meador ACT/Giant Eagle Statement, supra note 17, at 2.
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At the same time, in certain limited cases, behavioral relief may
be appropriate. For example, such relief may be proper where it is
narrow and time-limited (such as the provision of transition services)
or necessary to guard against the likelihood of foreclosure that would
otherwise undermine the proposed divestitures. The Commission must also
be prepared to monitor any such relief and ensure it is narrowly
tailored in scope.
These principles inform the concrete criteria I apply when
evaluating proposed remedies.
Whether the divested assets form a part of a viable,
standalone business.
Whether the buyer has the financial and operational
capability to compete immediately.
Whether any behavioral provisions are enforceable and
designed to address the competitive concern at issue, or directly
support the effectiveness of the structural relief.
[[Page 24872]]
Whether the remedy works without ongoing Commission
supervision or, if monitoring is required, whether the Commission is
well positioned to fulfill that oversight function.
Whether the proposed settlement fully resolves the
competitive concerns at the time it is proposed.
Whether the remedy eliminates the merged firm's ability
and incentive to engage in future exclusionary conduct, including
monopolization strategies that rely on technical foreclosure.
After careful review of information contained in the investigatory
record, particularly the parties' ordinary course documents and third-
party statements, it is my view that the remedy here satisfies these
criteria and mitigates the concerns I've outlined above given the
market conditions and bargaining dynamics relevant to this industry.
Regarding the structural relief contained in the proposed order,
the settlement requires clean divestitures of autonomous business
lines, including Cantaloupe's micromarket kiosk business and related
software services. The proposed divestiture buyer, Seaga, has the
resources, relevant experience, and operational capability to compete
vigorously on day one. Seaga's existing business incentives, including
its incentives to develop its own software and hardware offerings and
to support cross-platform integrations, significantly mitigate typical
vertical or ecosystem lock-in concerns that often accompany
transactions of this nature.
The prior notice requirement for future acquisitions involving
micromarket-related businesses is an additional important safeguard,
particularly in light of 365 Retail's history of serial acquisitions
preceding the current transaction. That requirement ensures that the
Commission will be alerted to future deals that may further reduce
competition.
The transition services provisions are appropriately limited,
incidental to the transfer of assets, and necessary to ensure
continuity of operations while the divestiture buyer is in the process
of establishing independent back-end systems. Moreover, they are short-
term and technical in nature and require only temporary oversight for
the duration of the approximately one-year transition period.
Importantly, the commitments to divest are binding and structured to
require minimal Commission oversight, consistent with the Commission's
longstanding expectation that structural relief be self-sustaining and
capable of operating autonomously.
Although the proposed remedial package is structural in nature,
there are additional targeted behavioral provisions that are both
necessary and appropriately tailored to address concerns related to the
acquisition of Cantaloupe's software assets.
In particular, the interoperability and fee-monitoring requirements
are designed to operate alongside the structural relief and maintain
the parties' existing incentives to support access to critical inputs
needed to compete in the provision of micromarket kiosks. The proposed
behavioral commitments therefore play a meaningful role in preventing
the merged firm from leveraging its expanded control over hardware and
software to deprive rivals of access to critical functionalities and
data connections.
Given 365 Retail's existing market position and its significant
hardware portfolio, the acquisition of Cantaloupe's software services
would create a material risk that the merged firm could, in the future,
engage in exclusionary practices that violate section 2 of the Sherman
Act. Such practices could include, but are not limited to, conditioning
customer access to its systems on restrictive terms that limit data
portability, degrading interoperability with other service providers,
and limiting cross-compatibility for operators seeking to migrate their
data systems. By directly eliminating the mechanisms through which
future foreclosure could occur, the remedy ensures that the merged firm
cannot use its enhanced technical capabilities to engage in
exclusionary conduct in the micromarket kiosk market or pursue
monopolization strategies in adjacent markets.
Because the proposed transaction will be subject to enforceable
safeguards that preserve interoperability and institute fee-monitoring,
the post-transaction integration of hardware and software assets, to
the extent permitted by the order, can proceed in ways that accelerate
complementary innovation, maintain competition, and facilitate new
entry. When interoperability is preserved and foreclosure incentives
are neutralized, integration is more likely to generate efficiencies
which will ultimately be passed on to consumers without the
accompanying risk of the merged firm engaging in exclusionary conduct.
The ten-year duration of the interoperability provisions, the
presence of a qualified monitor, and the divestiture buyer's capacity
to develop and operate its own hardware and software all work together
to ensure that the remedy is durable, enforceable, and fully addresses
the competitive risks identified during the investigation.
For these reasons, it is my view that the proposed remedies
contained in the consent order fully resolve the competitive concerns
raised by this transaction. It is important to bear in mind, however,
that the proposed remedy package was crafted with close attention to
the bargaining dynamics unique to this industry and was shaped directly
by real-world concerns raised by customers and rival operators who
depend on continued access to critical technology inputs. The case-
specific features of this market warranted the tailored approach
reflected in this order, and different circumstances in a different
market could easily justify a different outcome.
Conclusion
The proposed remedy reflects the precision the Commission continues
to apply to secure relief that advances our competition mandate and
protects American consumers. It also underscores the importance of
evaluating a company's overall course of conduct, including its past
acquisition history and any risks related to foreclosed access, when
assessing the competitive implications of a transaction. Given 365
Retail's history of serial acquisitions and the heightened risks that
additional consolidation could pose, it is imperative that Commission
staff continue to closely scrutinize any future transactions involving
365 Retail consistent with the prior-notice provisions in the order.
Continued, proactive oversight will be necessary to prevent further
entrenchment of market power and to safeguard the competitive
conditions upon which businesses in these and adjacent markets rely.
[FR Doc. 2026-09021 Filed 5-6-26; 8:45 am]
BILLING CODE 6750-01-P