When the Federal Trade Commission (FTC) tried to stop Whole Foods from buying its competitor, Wild Oats, the organic and natural food retailer responded by suing the FTC and arguing against the FTC’s claim that because the two retailers overlap in 21 markets, the transaction would be anticompetitive and make Whole Foods a monopoly.

During the FTC’s investigation of Whole Foods, the FTC found that its CEO John Mackey has been actively blogging on the Yahoo Finance Web site for eight years.  Using the alias, “Rahodeb” (an anagram of his wife Deborah’s name), he wrote poorly of Wild Oats, saying that it would probably go into bankruptcy, while praising Whole Foods (and himself, noting in one posting that Rahodeb thought Mackey’s new haircut was “cute”). The FTC, angered by his false identification, is using this information in its case against Whole Foods.  Mackey became a “corporate cheerleader” for Whole Foods on the blogs but acted as though he were just any other person.  The FTC also regards his opinions and statements as strong evidence of his intent to make Whole Foods a monopoly.

Many CEOs blog today, but most fully disclose their true identities.  Mackey claims that he wanted to stay undisclosed so that he could get others’ opinions on various topics.  Yet in the grocery industry, customers must have trust in the products, the way they are produced, and their promised benefits.  At Whole Foods, customers are paying a premium for food that the chain promises is good for their health.  If the CEO falsely identifies himself—for eight years, no less—customers may begin to lose faith in all the retailer’s claims, mission, and values.

Discussion Questions:

1. Is John Mackey’s blogging ethical

2. Would you still buy from Whole Foods after knowing that the CEO falsely identified himself on the Yahoo Finance blog?

“Mr. Mackey’s Offense,” The Wall Street Journal, July 16, 2007.