ATTORNEY WORK PRODUCT — PRIVILEGED AND CONFIDENTIAL

ATTORNEY WORK PRODUCT — PRIVILEGED AND CONFIDENTIAL
CALDERWOOD & HARKNESS LLP 1401 K Street NW, Suite 1200 Washington, D.C. 20005
MEMORANDUM
To: Howard Bellamy, Responsible Partner; Elaine Forsythe, Billing Partner
From: Elliot Nguyen, Lead Associate, Antitrust & Competition
Date: July 28, 2025
Re: Deposition Outline — Claire Dunmore, FTC Rule 30(b)(6) Designee on Market Definition
Matter: FTC v. Cascade Retail Holdings Inc. et al., Case No. 2:25-cv-01087-RAJ (W.D. Wash.)
Matter No.: 1038-00001
Client: Cascade Retail Holdings Inc.
CLASSIFICATION: ATTORNEY WORK PRODUCT — PRIVILEGED AND CONFIDENTIAL NOT FOR DISCLOSURE OUTSIDE JOINT DEFENSE GROUP
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DEPOSITION OUTLINE — CLAIRE DUNMORE (FTC 30(b)(6) DESIGNEE)
I. Purpose and Scope of Deposition
Claire Dunmore is the Lead Trial Attorney in the Federal Trade Commission's Bureau of Competition, Mergers IV Division. She has been designated by the FTC as its corporate representative under Federal Rule of Civil Procedure 30(b)(6) on the topic of relevant market definition in the above-captioned proceeding. As the FTC's designated witness, Ms. Dunmore is obligated to testify on behalf of the Commission — not merely on the basis of her personal knowledge — and must be prepared to provide binding testimony on each of the designated topics enumerated in our deposition notice.
The deposition was noticed under Fed. R. Civ. P. 30(b)(6) on the following designated topics:
1.  The FTC's methodology for defining the relevant product and geographic market in the Complaint and Administrative Complaint;
2.  The identification of marketplace platforms included in, and excluded from, the FTC's alleged relevant market;
3.  The factual and analytical basis for the market share calculations set forth in the FTC Complaint (Docket No. 2:25-cv-01087-RAJ, at paragraphs 40–49);
4.  The FTC's treatment of social commerce platforms, hybrid retail models, and direct-to-consumer e-commerce in connection with its market definition analysis;
5.  The FTC's analysis of competitive constraints from entities or channels outside the alleged relevant market, including barriers to entry and expansion.
The deposition is scheduled to be conducted at Calderwood & Harkness LLP's Washington, D.C. office (1401 K Street NW, Suite 1200), or at the FTC's offices at 600 Pennsylvania Avenue NW, Washington, D.C. 20580, per agreement of counsel. As of the date of this memorandum, the parties have not finalized the location; we expect to confirm the venue by August 1, 2025.
Coordination Note: Whitfield, Greer & Tanaka LLP ("WGT"), represented by Diana Whitfield (partner) and Kenneth Oshiro (senior associate), serves as counsel to co-defendant Pinnacle Market Group Inc. WGT may attend and participate in this deposition under the terms of the Joint Defense and Common Interest Agreement executed by all defense counsel on July 1, 2025. Pursuant to the joint defense allocation agreed upon among the parties, Calderwood & Harkness will lead all questioning on market definition methodology, market share calculations, and competitive constraints. WGT may follow up with examination on Pinnacle-specific topics, including Pinnacle's competitive trajectory, seller demographics, and the FTC's treatment of Pinnacle's individual product verticals within the market definition analysis. This outline will be shared with WGT under the joint defense agreement for coordination purposes.
II. Preliminary Matters / Background of Witness
A. Introduction and Oath
The examining attorney should begin by establishing the following foundational matters on the record:
1.  Confirm that the deponent is Claire Dunmore, and that she serves as Lead Trial Attorney in the Bureau of Competition, Mergers IV Division, at the Federal Trade Commission.
2.  Confirm that Ms. Dunmore has been formally designated by the Federal Trade Commission as its Rule 30(b)(6) corporate representative on the topic of relevant market definition in FTC v. Cascade Retail Holdings Inc. et al., Case No. 2:25-cv-01087-RAJ (W.D. Wash.), and in the related administrative proceeding, Docket No. 9438.
3.  Confirm that Ms. Dunmore understands the scope of the designated topics as set forth in the deposition notice served on or about July 14, 2025, and that she is prepared to testify on behalf of the Commission — and not merely on the basis of her individual knowledge — on each of those topics.
4.  Confirm that Ms. Dunmore understands that she is testifying under oath, that her testimony has the same force and effect as if given in open court, and that the ordinary rules of evidence and perjury apply.
5.  Confirm that Ms. Dunmore has had the opportunity to review the deposition notice and to discuss the scope of the designated topics with the FTC's counsel of record.
6.  Ask whether Ms. Dunmore has any questions or concerns about the deposition process before we begin substantive questioning.
B. Preparation for Deposition
This section is designed to establish the universe of materials the witness reviewed and the persons she consulted in preparation. These questions will help us identify potential additional discovery targets, and will also establish whether the FTC's testimony was coordinated or scripted.
1.  Ms. Dunmore, please identify all documents you reviewed in preparation for this deposition. This includes, but is not limited to, the Complaint, the Administrative Complaint, any internal FTC memoranda, any economic analyses, any draft expert reports, any correspondence with third parties, any interview transcripts or notes, and any other materials.
2.  Please identify all persons with whom you spoke in preparation for this deposition, including but not limited to:
(a) FTC staff attorneys, including Samuel Ortega (Trial Attorney, Bureau of Competition) and Rebecca Yun (Trial Attorney, Bureau of Competition);
(b) Bureau of Economics staff, including Dr. Nathaniel Hargrove (Staff Economist, Bureau of Economics);
(c) Any outside economic experts, including Dr. Wallace Keenan of Thornfield Research Group, located at 1515 Wilson Boulevard, Suite 300, Arlington, Virginia 22209;
(d) FTC Commissioners or their staffs;
(e) Any other FTC personnel, including supervisory attorneys, the Director of the Bureau of Competition, or the General Counsel's office.
3.  Please identify all preparatory sessions or meetings held in connection with this deposition, including the dates, times, locations, attendees, and approximate durations of each session. We are not asking for the content of communications protected by the attorney-client privilege, but we are entitled to know the fact, timing, and participants of preparation sessions.
4.  Have you reviewed any memoranda, analyses, draft reports, or other documents prepared by Dr. Nathaniel Hargrove, or by any other economist in the Bureau of Economics, relating to the definition of the relevant product or geographic market in this proceeding? If so, please identify each such document by date, author, title (if any), and subject matter.
5.  Have you reviewed any memoranda, draft reports, preliminary analyses, or other documents prepared by Dr. Wallace Keenan of Thornfield Research Group, or by any other outside economic consultant retained by the FTC, relating to market definition in this proceeding? If so, please identify each such document by date, author, title (if any), and subject matter.
6.  Other than the documents and persons already identified, is there any other source of information — including industry publications, academic literature, or prior FTC enforcement actions — that you reviewed or consulted in preparation for testifying on the designated topics?
C. Background of Investigation
The purpose of this section is to establish the timeline and procedural history of the FTC's investigation. These questions are largely confirmatory but will serve to fix the factual record and to identify any gaps or inconsistencies.
1.  When did the FTC first begin investigating the proposed acquisition of Pinnacle Market Group Inc. by Cascade Retail Holdings Inc.? Please provide the approximate date on which the investigation was opened and identify the individual or individuals who authorized the opening of the investigation.
2.  I would like to confirm the following timeline of key events. Please correct me if any of the following dates or facts are inaccurate:
(a) The Agreement and Plan of Merger between Cascade Retail Holdings Inc. and Pinnacle Market Group Inc. was executed on March 14, 2025;
(b) The parties filed their Hart-Scott-Rodino pre-merger notification forms with the FTC and the Department of Justice Antitrust Division on April 2, 2025, under Transaction Number HSR-20250402-0347;
(c) The FTC issued a Second Request for additional information and documentary material to both Cascade and Pinnacle on May 7, 2025, under FTC File Number 251-0089;
(d) Cascade certified substantial compliance with the Second Request on June 10, 2025;
(e) The FTC filed its Administrative Complaint before the Commission on June 20, 2025, under Docket Number 9438;
(f) The FTC filed its Complaint for a Temporary Restraining Order and Preliminary Injunction in the United States District Court for the Western District of Washington on June 23, 2025, under Case Number 2:25-cv-01087-RAJ.
3.  Is it correct that the Commission voted three to two to authorize the filing of the Complaint and the Administrative Complaint? Please confirm the vote tally.
4.  Without disclosing privileged deliberative process content, are you aware of the basis for the dissenting Commissioners' objections to the authorization of the Complaint? Specifically, are you aware of whether either dissenting Commissioner expressed concerns about the definition of the relevant product market or the sufficiency of the evidence supporting the alleged market definition?
5.  Who within the Bureau of Competition was principally responsible for recommending the relevant market definition ultimately adopted in the Complaint? Was it you, Ms. Dunmore, or was it another attorney or economist? Please identify all individuals who played a material role in formulating the market definition recommendation presented to the Commission.
6.  Was the market definition recommendation presented to the Commission as part of a formal recommendation memorandum? If so, who authored that memorandum, and when was it submitted to the Commission?
III. Topic 1: Relevant Product Market Definition — Methodology
A. Overall Approach
1.  Ms. Dunmore, the Complaint in this proceeding alleges that the relevant product market is "online marketplace platform services for third-party sellers in the United States." Please describe in your own words what the FTC means by this market definition. What is included within this market, and what is excluded?
2.  What analytical framework did the FTC use to define the relevant product market? Did the FTC apply the hypothetical monopolist test — also referred to as the SSNIP test, for "Small but Significant Non-transitory Increase in Price" — as described in the Department of Justice and FTC 2023 Merger Guidelines?
3.  If the FTC did apply the SSNIP test, please describe the analysis in detail:
(a) On which side of the marketplace platform did the FTC apply the SSNIP analysis? Was it applied to the seller side of the platform (i.e., the fees, commissions, and take rates charged to third-party sellers), to the buyer/consumer side of the platform (i.e., any prices or fees paid by consumers), or to both sides of the platform?
(b) What was the specific price used as the benchmark for the SSNIP analysis? Was it the take rate charged to sellers — Cascade's take rate of approximately 17% of GMV and Pinnacle's take rate of approximately 16% of GMV — listing fees, advertising or promotional fees, fulfillment service fees, or some other measure of price?
(c) What was the magnitude of the hypothetical price increase tested — 5%, 10%, or some other percentage — and over what time horizon was the non-transitory character of the increase assessed?
(d) What data did the FTC rely upon to determine whether a hypothetical monopolist's imposition of a SSNIP would be profitable?
4.  Did the FTC analyze the relevant market as a two-sided platform under the analytical framework discussed by the Supreme Court in Ohio v. Halcyon Corporation, 138 S. Ct. 2274 (2018)? That decision held that, for transaction platforms that facilitate a single simultaneous transaction between participants on both sides, the relevant market must encompass both sides. Marketplace platforms facilitate transactions between sellers and buyers. Did the FTC account for the cross-platform network effects between sellers and consumers — that is, the fact that a platform's attractiveness to sellers depends on the number of consumers, and vice versa?
5.  If the FTC did not apply the Amex two-sided market framework, please explain the rationale for treating the seller side of the marketplace platform as a distinct, one-sided market. What analytical basis supports the conclusion that the indirect network effects between sellers and consumers are insufficient to require a two-sided market analysis?
6.  Is the FTC aware of any recent federal court decisions applying the Amex framework to marketplace platforms? Has the FTC considered how those decisions bear on the market definition in this case?
7.  Did the FTC consider any alternative analytical frameworks for defining the relevant product market, including cluster market analysis, Brown Shoe practical indicia, or critical loss analysis? If so, please describe those analyses and their results.
B. Demand-Side Substitution
1.  What evidence did the FTC gather regarding demand-side substitution — that is, what alternatives do third-party sellers turn to if a marketplace platform raises its take rate or otherwise worsens the terms of service?
2.  Did the FTC interview or survey third-party sellers as part of its investigation? If so:
(a) How many third-party sellers were interviewed or surveyed?
(b) What was the sample methodology? Were sellers selected randomly, or were they identified through subpoenas to the merging parties or to competitors?
(c) What questions were asked regarding the sellers' willingness or ability to switch from one marketplace platform to another, or from a marketplace platform to a direct-to-consumer channel?
(d) What were the key findings of the seller interviews or surveys?
(e) Were the interviews documented in memoranda or notes? If so, have those memoranda or notes been produced in discovery?
3.  Did the FTC analyze whether third-party sellers view direct-to-consumer e-commerce channels as substitutes for marketplace platform services? By direct-to-consumer channels, I mean the ability of a seller to build and operate its own e-commerce website — for example, using Dunmore Services Inc., Bramwell Health IT, Granite Harbor Services Inc., or similar e-commerce software — or to sell through a retailer's first-party e-commerce site (e.g., CascadeDirect.com). Specifically:
(a) Did the FTC consider evidence that sellers regularly shift sales volume between marketplace platforms and their own direct-to-consumer websites in response to changes in marketplace platform fees or policies?
(b) Did the FTC analyze the cost to a third-party seller of establishing and maintaining a direct-to-consumer e-commerce presence, including customer acquisition costs, technology costs, and fulfillment costs, as compared with the cost of selling through a marketplace platform?
(c) Did the FTC consider the extent to which marketplace platforms provide services — such as fulfillment, payment processing, customer service, and buyer traffic — that would need to be independently replicated by a seller operating a direct-to-consumer channel?
4.  Did the FTC consider whether social commerce platforms — including Brevity Social Commerce Inc. (launched in 2023, headquartered in Los Angeles, California) and the social-commerce features recently deployed by major social media platforms — are demand-side substitutes for marketplace platforms from the perspective of third-party sellers?
(a) Specifically, did the FTC analyze whether third-party sellers that currently sell on Pinnacle or CascadeMarket view Brevity's platform as a viable alternative for reaching consumers and processing transactions?
(b) Did the FTC analyze any data showing that sellers have migrated some or all of their sales activity from traditional marketplace platforms to social commerce channels?
(c) Did the FTC analyze consumer purchasing behavior data showing an increasing share of online purchases being initiated through social media platforms rather than through traditional marketplace platforms?
C. Supply-Side Substitution
1.  Did the FTC analyze supply-side substitution — that is, the ability of firms currently operating outside the alleged relevant market to enter or expand into marketplace platform services in response to a price increase or other competitive opportunity?
2.  Cascade itself launched CascadeMarket in June 2019, adding a third-party marketplace to its existing direct-to-consumer e-commerce platform, CascadeDirect.com. CascadeMarket grew from zero to approximately $3.1 billion in GMV and captured 8.2% of the FTC's alleged relevant market in fewer than six years. Does the FTC view CascadeMarket's own entry as evidence that supply-side substitution into marketplace platform services is feasible and has occurred?
(a) If the FTC does not view CascadeMarket's entry as evidence of supply-side substitution, please explain why not.
(b) If the FTC does view CascadeMarket's entry as evidence of supply-side substitution, please explain how the FTC reconciles this evidence with its contention that barriers to entry in the marketplace platform market are high.
3.  Did the FTC consider the entry of Trove Marketplace Inc. (launched in 2024, headquartered in Chicago, Illinois) as evidence of supply-side substitution? Trove launched a third-party seller marketplace targeting specialty and artisan goods categories that overlap substantially with Pinnacle's core categories. What share of marketplace GMV does the FTC attribute to Trove, and how does the FTC account for Trove's growth trajectory?
4.  Is the FTC aware of any other firms that have entered or have announced plans to enter the marketplace platform services market since the beginning of the FTC's investigation? If so, please identify those firms and describe the FTC's analysis of their competitive significance.
5.  Did the FTC consider whether major technology companies — including companies operating large-scale logistics, payments, or advertising platforms — could readily enter the marketplace platform services market by leveraging existing infrastructure and consumer relationships?
D. Exclusion of Direct E-Commerce Retail
1.  The FTC's alleged relevant market excludes Cascade's direct-to-consumer e-commerce operations (CascadeDirect.com), as well as the first-party e-commerce operations of other major retailers. What is the analytical basis for this exclusion?
2.  Cascade reported total e-commerce and marketplace revenue of $9.3 billion for fiscal year 2024 (ending January 31, 2025). Of that amount, CascadeMarket generated approximately $527 million in marketplace services revenue (commissions, fees, and advertising revenue from third-party sellers) on approximately $3.1 billion in gross merchandise value. The remaining approximately $8.77 billion in e-commerce and marketplace revenue was attributable to Cascade's direct-to-consumer operations. Did the FTC analyze the competitive interplay between Cascade's direct retail operations and its CascadeMarket marketplace? Specifically:
(a) Did the FTC consider the extent to which CascadeMarket and CascadeDirect.com compete for the same consumer purchasing occasions — that is, situations in which a consumer could purchase the same or a substantially similar product either from Cascade's own inventory (first-party) or from a third-party seller on CascadeMarket?
(b) Did the FTC analyze internal Cascade documents — including strategic planning documents, board presentations, and competitive assessments — that discuss the competitive relationship between CascadeMarket and CascadeDirect.com?
(c) Did the FTC consider whether Cascade's pricing decisions for CascadeMarket (including the 17% take rate) are influenced by the need to remain competitive with Cascade's own direct-to-consumer channel, which offers sellers the alternative of a wholesale relationship?
3.  Does the FTC contend that a seller choosing between listing products on a marketplace platform and selling through its own direct-to-consumer e-commerce channel is not engaged in economic substitution? On what evidentiary basis does the FTC draw this distinction?
4.  Cascade's total e-commerce GMV — including both direct-to-consumer sales and marketplace third-party seller GMV — was approximately $43.7 billion for fiscal year 2024. Combined with Pinnacle's $11.4 billion in GMV, the merged entity's share of total U.S. e-commerce GMV (which was approximately $757 billion industry-wide in 2024, according to U.S. Census Bureau data and industry sources) would be approximately 7.3%. Did the FTC consider this broader framing of the competitive landscape?
(a) If the FTC considered this broader framing and rejected it, what was the basis for the rejection? What evidence supported the conclusion that "online marketplace platform services for third-party sellers" is a distinct relevant market that does not include direct-to-consumer e-commerce?
(b) Did the FTC perform a SSNIP analysis or other economic test that specifically demonstrated that a hypothetical monopolist of all marketplace platform services could profitably impose a small but significant non-transitory increase in take rates without losing a sufficient volume of sellers to direct-to-consumer alternatives to make the increase unprofitable?
E. Role of Bureau of Economics
1.  What role did Dr. Nathaniel Hargrove, a staff economist in the Bureau of Economics, play in formulating the market definition adopted in the Complaint? Please describe his involvement, including the nature and scope of any economic analyses he performed.
2.  Did Dr. Hargrove prepare a formal market definition memorandum or economic analysis in connection with this investigation? If so:
(a) When was the memorandum or analysis completed?
(b) Who reviewed the memorandum or analysis, including any supervisory economists in the Bureau of Economics and any attorneys in the Bureau of Competition?
(c) What were the principal conclusions of the memorandum or analysis with respect to the relevant product market?
(d) Did the memorandum or analysis address any of the following topics: the SSNIP test, demand-side substitution, supply-side substitution, the Amex two-sided market framework, the exclusion of direct e-commerce retail, or the treatment of social commerce platforms?
3.  Were there any internal disagreements within the Bureau of Economics regarding the appropriate market definition in this proceeding? Specifically:
(a) Did any economist in the Bureau of Economics express the view that the relevant market should be defined more broadly to include direct-to-consumer e-commerce or social commerce platforms?
(b) Did any economist in the Bureau of Economics express the view that the SSNIP analysis did not support the market definition ultimately adopted in the Complaint?
(c) Did the Bureau of Economics provide a formal recommendation to the Bureau of Competition on market definition, and if so, was that recommendation consistent with the market definition ultimately adopted?
4.  Did the FTC retain any outside economic consultants for purposes of market definition prior to Dr. Wallace Keenan's retention at Thornfield Research Group? If so, please identify each consultant, the firm with which they are affiliated, the date of retention, and the nature and scope of the work performed.
5.  When was Dr. Wallace Keenan retained by the FTC, and what is the scope of his engagement? Specifically, was Dr. Keenan retained before or after the filing of the Complaint on June 23, 2025? Was his analysis of market definition completed before the Complaint was drafted, or was it prepared subsequently?
IV. Topic 2: Identification of Marketplace Platforms Included in and Excluded from the Relevant Market
A. Platforms Included
1.  The Complaint identifies the following entities as participants in the alleged "online marketplace platform services for third-party sellers in the United States" market and attributes the following market shares, calculated on the basis of gross merchandise value. Please confirm the inclusion and the FTC's calculated market share for each:
2.  What criteria determined whether a platform was included in the FTC's relevant market? Is the sole criterion the presence of a third-party seller marketplace feature — that is, the ability for independent sellers to list and sell products through the platform — or are there additional functional requirements? For example:
(a) Must the platform provide payment processing services for third-party transactions?
(b) Must the platform offer fulfillment or logistics services?
(c) Must the platform generate a minimum volume of GMV or serve a minimum number of active sellers?
(d) Must the platform be available to sellers in multiple product categories, or does the market include single-category or niche marketplaces?
3.  How did the FTC determine which platforms fell within the "All Others" category? Please identify, to the extent you are able, each individual platform included in the "All Others" category and the GMV attributed to each.
B. Specific Platforms — Follow-Up
1.  Vertex Commerce Inc. — The FTC attributes a 35.7% market share to Vertex Commerce, making it the single largest participant in the FTC's alleged relevant market. Please address the following:
(a) What analysis did the FTC perform regarding Vertex Commerce's competitive significance and its role in constraining the pricing and competitive behavior of other marketplace platforms, including Pinnacle and CascadeMarket?
(b) Did the FTC consider that, even after the proposed merger, Vertex Commerce would remain larger than the combined Cascade-Pinnacle entity by market share (35.7% versus 38.3%)? If so, how does the FTC reconcile the assertion that the merger would substantially lessen competition with the fact that the market's largest participant would remain an independent competitor?
(c) Did the FTC analyze Vertex Commerce's pricing behavior, including its take rates, fee structures, and any recent changes to its seller policies, as part of the market definition analysis?
(d) Did the FTC obtain documents from Vertex Commerce through a Civil Investigative Demand or third-party subpoena? If so, what was the scope of the document production, and what did the documents reveal about Vertex Commerce's competitive position relative to Pinnacle and CascadeMarket?
2.  Nomad Shops LLC — The FTC attributes a 14.6% market share to Nomad Shops, which operates a curated artisan and small-business marketplace. Please address the following:
(a) Did the FTC analyze whether Nomad Shops' platform is a close substitute for Pinnacle's platform? Pinnacle's marketplace covers a broad range of product categories, including home goods, artisanal products, specialty foods, fashion, and electronics. Does Nomad Shops' focus on curated artisan and small-business products make it a competitive alternative that is meaningfully differentiated from Pinnacle's broader offering?
(b) Are the seller demographics on Nomad Shops substantially overlapping with those on Pinnacle? For example, what percentage of Nomad Shops' sellers also sell on Pinnacle?
(c) Do the product categories available on Nomad Shops substantially overlap with the product categories available on Pinnacle?
(d) Did the FTC analyze the diversion ratio between Nomad Shops and Pinnacle — that is, the share of sellers or sales volume that would divert from Pinnacle to Nomad Shops in the event of a price increase on Pinnacle?
3.  Brevity Social Commerce Inc. — Brevity launched in 2023 and is headquartered in Los Angeles, California. The FTC includes Brevity within the "All Others" category. Please address the following:
(a) What share of the total marketplace platform GMV does the FTC attribute to Brevity within the "All Others" category?
(b) What was Brevity's GMV in calendar year 2024, and what was its year-over-year growth rate?
(c) How does the FTC account for Brevity's growth trajectory in its forward-looking competitive analysis? Given that merger analysis is inherently forward-looking, did the FTC project Brevity's likely market share in the years following the merger?
(d) Did the FTC analyze whether Brevity is likely to become a significant competitive constraint on the merged entity in the near term?
4.  Trove Marketplace Inc. — Trove launched in 2024 and is headquartered in Chicago, Illinois. The FTC includes Trove within the "All Others" category. Please address the same questions as posed with respect to Brevity:
(a) What share of the total marketplace platform GMV does the FTC attribute to Trove within the "All Others" category?
(b) What was Trove's GMV in calendar year 2024 or in its first year of operations, and what is its projected growth trajectory?
(c) How does the FTC account for Trove's entry and growth in its forward-looking competitive analysis?
(d) Did the FTC analyze whether Trove's entry into product categories (specialty and artisan goods) that overlap substantially with Pinnacle's core categories bears on the competitive effects of the proposed merger?
C. Platforms Excluded — Rationale
1.  I would now like to ask about categories of firms and platforms that the FTC considered but ultimately excluded from the relevant market — or that the FTC did not consider at all. For each of the following categories, please explain whether the FTC considered including it in the relevant market and, if so, why it was excluded:
(a) Cascade's direct-to-consumer e-commerce platform (CascadeDirect.com): As discussed above, CascadeDirect.com is Cascade's first-party e-commerce platform, through which Cascade sells products from its own inventory directly to consumers. CascadeDirect.com generated the majority of Cascade's $9.3 billion in e-commerce and marketplace revenue in fiscal year 2024. Did the FTC consider including CascadeDirect.com's first-party sales within the relevant market? If not, why not?
(b) Major general retailers' first-party e-commerce operations: Large brick-and-mortar and online retailers — including major national and international retailers operating substantial e-commerce platforms — sell products online through their own inventory. Did the FTC consider whether these first-party e-commerce operations compete with marketplace platforms for the same consumer purchasing occasions? If these operations were excluded, what was the basis for the exclusion?
(c) Social commerce features embedded in social media platforms: Several major social media platforms have introduced or are developing integrated commerce features that allow third-party sellers to list products, process transactions, and fulfill orders directly through the social media platform. Did the FTC consider including these social commerce features within the relevant market? If they were excluded, what was the analytical basis for distinguishing them from marketplace platform services?
(d) Subscription-based e-commerce services: Certain e-commerce platforms operate on a subscription or membership model, where consumers pay a recurring fee in exchange for access to products, deals, or curated selections. Did the FTC consider whether these models compete with marketplace platforms? If they were excluded, why?
(e) Cross-border marketplace platforms primarily serving international sellers: Some marketplace platforms primarily facilitate cross-border transactions, enabling international sellers to reach U.S. consumers. Did the FTC consider including these platforms in the relevant market? If they were excluded, was the exclusion based on the geographic market definition (United States) or on product market considerations?
2.  For each excluded category, what specific evidence supported the conclusion that the excluded firms or platforms are not meaningful competitive constraints on the pricing, terms of service, or competitive behavior of the marketplace platforms included in the FTC's relevant market?
3.  Did the FTC perform any formal economic analysis — including a SSNIP test, critical loss analysis, or other quantitative test — specifically designed to determine whether any of the excluded categories should be included in the relevant market? If so, please describe that analysis and its results.
V. Topic 3: Basis for Market Share Calculations
A. GMV as the Metric
1.  The FTC calculated market shares based on Gross Merchandise Value — that is, the total dollar value of merchandise sold through each marketplace platform, before deducting marketplace commissions, fees, returns, or cancellations. Why was GMV chosen as the metric for calculating market shares over alternative metrics such as:
(a) Net revenue — the commissions, fees, and advertising revenue actually earned by the marketplace platform operator;
(b) Number of active sellers — the count of third-party sellers actively listing and selling products on the platform during the relevant time period;
(c) Number of transactions — the total number of completed purchase transactions facilitated by the platform;
(d) Seller-side revenue — the total fees and commissions paid by sellers to the platform, exclusive of advertising and other ancillary services;
(e) Consumer traffic — the number of unique consumers or visits to the platform during the relevant period?
2.  Is the FTC aware that different marketplace platforms calculate GMV using different methodologies? For example, some platforms include shipping charges, sales tax, and ancillary fees within GMV, while others exclude them. Some platforms include the gross transaction value before returns and cancellations, while others report net GMV after deducting returns and cancellations. How did the FTC normalize GMV data across platforms to ensure an apples-to-apples comparison?
3.  What data sources did the FTC rely upon to calculate each platform's GMV? Specifically, were the GMV figures derived from:
(a) Public filings with the Securities and Exchange Commission (e.g., Forms 10-K, 10-Q, and 8-K);
(b) HSR Act pre-merger notification submissions;
(c) Second Request responses produced by Cascade and Pinnacle;
(d) Responses to Civil Investigative Demands or third-party subpoenas issued to Vertex Commerce, Nomad Shops, Brevity Social Commerce, Trove Marketplace, or other platforms;
(e) Third-party industry reports, such as reports published by research firms, trade associations, or government agencies;
(f) Any other sources?
4.  For each platform's GMV figure, please identify the specific data source and the document or submission from which the figure was derived.
B. Specific Share Calculations
1.  Cascade (CascadeMarket) — 8.2%: CascadeMarket reported approximately $3.1 billion in gross merchandise value for fiscal year 2024 (ending January 31, 2025). Please confirm this figure. Based on this GMV figure and an 8.2% market share, the implied total market GMV denominator used by the FTC is approximately $37.8 billion ($3.1 billion divided by 0.082). Please confirm the total market GMV denominator used by the FTC, and identify the data sources and methodology used to arrive at this figure.
2.  Pinnacle Market Group Inc. — 30.1%: Pinnacle reported approximately $11.4 billion in gross merchandise value for fiscal year 2024 (ending December 31, 2024). Please confirm this figure. Dividing $11.4 billion by 0.301 yields an implied total market GMV of approximately $37.87 billion, which is consistent with the denominator implied by Cascade's market share calculation. Please confirm the consistency and explain any rounding or adjustments.
3.  Combined Cascade + Pinnacle — 38.3%: Please confirm that the combined post-merger market share of 38.3% is derived by adding Cascade's 8.2% share to Pinnacle's 30.1% share, and corresponds to a combined GMV of approximately $14.5 billion. Did the FTC make any adjustments to the combined share calculation to account for overlapping sales, multi-homing sellers who list on both platforms, or any other factors that might affect the additivity of market shares?
4.  Vertex Commerce Inc. — 35.7%: What GMV figure does the FTC attribute to Vertex Commerce? Based on the implied total market GMV of approximately $37.8 billion, a 35.7% market share would correspond to a Vertex GMV of approximately $13.5 billion. Please confirm this figure and identify the data source from which it was derived. Was the Vertex GMV figure obtained from Vertex's SEC filings (if Vertex is publicly traded), from a Civil Investigative Demand or third-party subpoena, or from some other source?
5.  Nomad Shops LLC — 14.6%: What GMV figure does the FTC attribute to Nomad Shops? Based on the implied total market GMV, a 14.6% market share would correspond to a Nomad GMV of approximately $5.5 billion. Please confirm this figure and identify the data source. Is Nomad Shops publicly traded? If not, how did the FTC obtain Nomad's GMV data?
6.  All Others — 11.4%: What GMV figure does the FTC attribute to the "All Others" category? Based on the implied total market GMV, an 11.4% market share would correspond to approximately $4.3 billion in GMV. How many individual marketplace platforms are included in this category? Please identify each platform to the extent practicable, and provide the GMV attributed to each.
C. HHI Calculations
1.  The Complaint alleges that the pre-merger Herfindahl-Hirschman Index for the alleged relevant market is 2,361 and that the post-merger HHI would be 2,856, representing an increase (delta) of 495 points. These figures are set forth at paragraph 47 of the Complaint. Please confirm.
2.  Please walk through the FTC's HHI calculation in detail. The HHI is calculated by summing the squares of the market shares of all participants in the relevant market. For the pre-merger HHI, the calculation should be as follows:
(a) Cascade (CascadeMarket): 8.2 squared = 67.24
(b) Pinnacle: 30.1 squared = 906.01
(c) Vertex Commerce: 35.7 squared = 1,274.49
(d) Nomad Shops: 14.6 squared = 213.16
(e) "All Others": the contributions from the individual firms within the "All Others" category. The sum of the squared shares of the "All Others" platforms depends on the distribution of shares within that category. If the "All Others" category consists of a large number of small platforms, the sum of squared shares within that category would be small. Please provide the precise breakdown.
(f) The sum of items (a) through (d) is 2,460.90 before accounting for the "All Others" category. Since the alleged pre-merger HHI is 2,361, please explain the discrepancy and provide the precise calculation, including the treatment of the "All Others" category.
3.  The post-merger HHI increase (delta) of 495 points should equal two times the product of the merging parties' pre-merger market shares — that is, 2 times 8.2 times 30.1, which equals 493.64. The Complaint rounds this figure to 495. Please confirm the rounding convention used and explain whether the rounding reflects a slight difference in the underlying market share figures (e.g., whether the precise market shares are 8.2% and 30.15%, or whether some other adjustment was made).
4.  Does the FTC contend that a post-merger HHI of 2,856 and a delta of 495 exceed the thresholds for a presumption of illegality under the 2023 Merger Guidelines? Specifically:
(a) The 2023 Merger Guidelines state that mergers resulting in a post-merger HHI above 2,500 and a delta above 200 are presumed likely to substantially lessen competition. Does the FTC contend that this presumption applies to this transaction?
(b) What is the FTC's position on the strength and rebutability of this presumption?
(c) Does the FTC acknowledge that the presumption is rebuttable and that the defendants may present evidence — including evidence of a broader relevant market, ease of entry, powerful buyers, efficiencies, or a weakening competitor — to overcome the presumption?
5.  Were any sensitivity analyses performed to test how changes in the relevant market definition would affect the HHI calculation? For example:
(a) If the relevant market were broadened to include all e-commerce retail in the United States (total GMV of approximately $757 billion in 2024), what would the post-merger HHI be? At the broadest level, the combined Cascade-Pinnacle share would be approximately 7.3% (based on combined e-commerce GMV of approximately $55.1 billion out of $757 billion), and the HHI delta would be negligible.
(b) If the relevant market were broadened to include direct-to-consumer e-commerce platforms in addition to marketplace platforms, what would the post-merger HHI be?
(c) If the relevant market were narrowed to specific product verticals (e.g., home goods, artisanal products, fashion), how would HHI change?
D. Time Period and Consistency
1.  What time period does the FTC's market share data cover? Is it calendar year 2024, the trailing twelve months as of the date of the Complaint, or some other period?
2.  Cascade's fiscal year ends on January 31, 2025, while Pinnacle's fiscal year ends on December 31, 2024. These fiscal years are not coterminous, and they overlap by only eleven months. Were the GMV figures adjusted to cover the same time period? If not, how does the FTC account for the potential distortion introduced by comparing GMV figures covering different periods?
3.  The marketplace platform industry is dynamic, with market shares changing significantly from year to year. Pinnacle's GMV growth rate decelerated from 28% year-over-year in 2022 to 9% year-over-year in 2024. Simultaneously, newer entrants like Brevity Social Commerce and Trove Marketplace have been growing rapidly. How does the FTC account for these dynamics in its market share calculations? Does the FTC contend that a snapshot of market shares at a single point in time is an accurate predictor of future competitive conditions?
4.  Did the FTC perform any forward-looking market share projections — for example, estimating market shares in 2026 or 2027 based on current growth trends — as part of its competitive effects analysis? If so, what did those projections show, and did they materially alter the HHI analysis?
VI. Topic 4: Treatment of Social Commerce and Hybrid Retail Models
A. Social Commerce Platforms
1.  How does the FTC define "social commerce," and on what basis does the FTC distinguish social commerce from "marketplace platform services" as defined in the Complaint?
2.  Is the FTC aware that Brevity Social Commerce Inc. enables third-party sellers to list products, process transactions, manage inventory, and fulfill orders through its platform — functions that are substantially identical to the core functions of the marketplace platforms included in the FTC's relevant market?
(a) If the FTC acknowledges that Brevity's functionality is substantially identical, please explain why Brevity is categorized within the "All Others" fringe rather than treated as a major market participant comparable to Nomad Shops.
(b) If the FTC contends that Brevity's functionality is materially different from traditional marketplace platform services, please identify the specific functional differences that support this distinction.
3.  Has the FTC analyzed consumer purchasing patterns showing a migration from traditional marketplace platforms to social commerce channels? Specifically:
(a) What data has the FTC collected on the share of U.S. e-commerce transactions initiated through social media platforms?
(b) Has the FTC reviewed industry reports or academic studies analyzing the growth of social commerce as a share of total online retail?
(c) Has the FTC reviewed any internal documents from Pinnacle or CascadeMarket discussing social commerce as a competitive threat?
4.  What evidence, if any, did the FTC obtain from Brevity Social Commerce Inc. or from other social commerce platforms during its investigation? Did the FTC issue a Civil Investigative Demand or third-party subpoena to Brevity? If so, what information was sought and obtained?
5.  Did the FTC consider whether the rapid growth of social commerce platforms will, within the near term, materially change the competitive landscape for marketplace platform services and thereby undermine the FTC's market definition and competitive effects analysis?
B. Hybrid Retail Models
1.  How does the FTC categorize hybrid retail models — that is, retailers that operate both first-party e-commerce (buying and reselling inventory directly to consumers) and third-party marketplace platform services (enabling independent sellers to list and sell through the retailer's platform)?
2.  Cascade itself is a paradigmatic hybrid: it operates CascadeDirect.com as its first-party e-commerce platform and CascadeMarket as its third-party marketplace. The FTC's relevant market includes CascadeMarket but excludes CascadeDirect.com. Does the FTC treat these as separate businesses operating in different markets, notwithstanding the fact that they share the same technology infrastructure, the same consumer base, the same logistics and fulfillment network, and the same brand?
3.  From the perspective of a third-party seller, there is a continuum of options for reaching consumers online, ranging from (a) selling wholesale to a retailer like Cascade (which then resells the product through CascadeDirect.com), to (b) listing products on CascadeMarket as a third-party seller, to (c) listing products on Pinnacle, Vertex Commerce, or Nomad Shops, to (d) listing products on a social commerce platform like Brevity, to (e) building and operating a direct-to-consumer e-commerce website using Dunmore Services Inc. or similar software. If a seller can seamlessly shift between these channels in response to changes in fees, traffic, or competitive conditions, does that functional substitutability not indicate that all of these channels are in the same relevant market — or at least that the competitive constraint they impose on each other must be considered?
4.  Did the FTC analyze any data showing the frequency with which sellers shift sales volume between wholesale/first-party channels and third-party marketplace channels? If so, what did that data show?
C. Cross-Platform Multi-Homing
1.  Did the FTC analyze the extent of multi-homing by third-party sellers — that is, the practice of sellers simultaneously listing and selling products on multiple marketplace platforms?
2.  What is the FTC's estimate of the percentage of Pinnacle's approximately 185,000 active third-party sellers that also sell on one or more other marketplace platforms? Specifically:
(a) What percentage of Pinnacle's active sellers also sell on CascadeMarket, which had approximately 42,000 active sellers in fiscal year 2024?
(b) What percentage of Pinnacle's active sellers also sell on Vertex Commerce?
(c) What percentage of Pinnacle's active sellers also sell on Nomad Shops?
(d) What percentage of Pinnacle's active sellers also operate their own direct-to-consumer e-commerce websites?
3.  Does the prevalence of multi-homing among third-party sellers reduce the anticompetitive effects of the proposed merger? Specifically, if a seller that currently lists on both CascadeMarket and Pinnacle would continue to have access to Vertex Commerce, Nomad Shops, Brevity, Trove, and its own direct-to-consumer channel after the merger, how does the FTC contend that the merger would harm that seller?
4.  Did the FTC perform any economic analysis specifically examining the relationship between multi-homing rates and the competitive effects of the proposed merger? If so, what were the results?
5.  Is the FTC aware of any evidence — including internal documents from Pinnacle or CascadeMarket — that multi-homing sellers are less likely to be harmed by changes in any single platform's fees or policies because they can shift sales volume to alternative platforms?
VII. Topic 5: Competitive Constraints from Outside the Alleged Market
A. Entry and Expansion
1.  Does the FTC's Complaint allege that there are high barriers to entry in the online marketplace platform services market? If so, what specific barriers does the FTC identify?
2.  The FTC's 2023 Merger Guidelines describe several categories of barriers to entry, including economies of scale, network effects, switching costs, proprietary technology, regulatory barriers, and access to distribution. Which of these categories does the FTC contend are present in the marketplace platform services market? Please address each of the following specifically:
(a) Network effects: Does the FTC contend that marketplace platforms exhibit strong network effects — that is, that a platform becomes more valuable to sellers as it attracts more consumers, and more valuable to consumers as it attracts more sellers — and that these network effects create a barrier to entry for new platforms?
(b) Technology investment: Does the FTC contend that the capital and technology investment required to build and operate a marketplace platform constitutes a significant barrier to entry?
(c) Seller acquisition costs: Does the FTC contend that the cost of attracting and onboarding third-party sellers is a significant barrier to entry?
(d) Consumer acquisition costs: Does the FTC contend that the cost of attracting consumers to a new marketplace platform is a significant barrier to entry?
(e) Data and algorithmic advantages: Does the FTC contend that incumbent platforms' accumulated data on consumer behavior, search patterns, and seller performance creates a competitive advantage that new entrants cannot readily replicate?
3.  How does the FTC reconcile the claimed barriers to entry with the fact that CascadeMarket was launched in June 2019 and, in fewer than six years, achieved 8.2% of the FTC's alleged relevant market — approximately $3.1 billion in GMV — notwithstanding the presence of well-established incumbents like Vertex Commerce and Pinnacle?
4.  How does the FTC reconcile the claimed barriers to entry with the launches of Brevity Social Commerce in 2023 and Trove Marketplace in 2024, both of which have entered the marketplace platform services space and are included within the FTC's "All Others" category?
5.  Has the FTC analyzed the time frame within which a new entrant could achieve sufficient scale to competitively constrain the merged entity? Under the 2023 Merger Guidelines, entry must be timely, likely, and sufficient to counteract anticompetitive effects. Does the FTC contend that entry meeting all three criteria is unlikely?
B. Competitive Constraints Not Reflected in Market Shares
1.  Did the FTC consider that sellers' outside option of establishing their own direct-to-consumer e-commerce operations constrains marketplace platform take rates and terms of service, even if direct-to-consumer e-commerce is excluded from the relevant market? In other words, even if direct e-commerce is not "in" the market, does the availability of that option exert competitive discipline on marketplace platforms?
2.  Did the FTC consider buyer-side (consumer) alternatives as a competitive constraint on marketplace platform pricing? Specifically, consumers can purchase the same goods directly from seller websites, from brick-and-mortar retail stores, or through other channels rather than through a marketplace platform. Does the availability of these alternatives to consumers constrain marketplace platforms' ability to raise fees on sellers, because sellers know that consumers have alternatives if platform prices rise?
3.  Did the FTC perform any analysis of the competitive constraint exerted by potential entry or expansion, as distinct from current market participants? For example, did the FTC assess the likelihood that a major technology company, logistics provider, or financial services firm could enter the marketplace platform services market within one to two years?
C. Pinnacle's Weakening Competitive Position
1.  Is the FTC aware that Pinnacle Market Group Inc.'s GMV growth rate has decelerated substantially in recent years, from 28% year-over-year in 2022 to 18% year-over-year in 2023 to 9% year-over-year in 2024?
2.  Is the FTC aware that Pinnacle's seller churn rate — that is, the percentage of active third-party sellers who cease listing products on the Pinnacle platform during a given year — increased from approximately 12% in 2022 to approximately 21% in 2024?
3.  Did the FTC perform any analysis of Pinnacle's competitive trajectory absent the merger — that is, an analysis of what Pinnacle's market position would be expected to look like in the "but-for world" in which the merger does not occur? Specifically:
(a) Did the FTC project Pinnacle's market share in 2026 or 2027 based on current trends in GMV growth, seller churn, and competitive entry?
(b) Did the FTC consider whether Pinnacle's decelerating growth and increasing seller churn indicate that Pinnacle is losing competitive ground to Vertex Commerce, Nomad Shops, and newer entrants like Brevity and Trove?
(c) Did the FTC analyze whether the competitive harm from the merger is reduced or eliminated if Pinnacle's share is expected to decline in the but-for world?
4.  If Pinnacle is a weakening competitor whose market share is likely to decline in the absence of the merger, does the FTC nonetheless contend that the merger's anticompetitive effect is substantial? On what basis?
5.  Has the FTC considered whether the facts regarding Pinnacle's weakening competitive position support the application of the "weakening competitor" or "flailing firm" defense recognized in the case law and the Merger Guidelines? If so, what is the FTC's position on the applicability of that defense?
VIII. Topic 6: The FTC's Internal Deliberations on Market Definition
A. Alternative Market Definitions Considered
1.  Did the FTC consider any alternative relevant market definitions during its investigation before settling on "online marketplace platform services for third-party sellers in the United States"? Please identify all alternative market definitions that were considered, discussed, or analyzed at any point during the investigation.
2.  Specifically, did the FTC consider any of the following alternative market definitions:
(a) "All e-commerce retail in the United States" — a market encompassing all online retail transactions, whether conducted through marketplace platforms, first-party e-commerce, social commerce, or other online channels;
(b) "Online retail platform services (including first-party and third-party)" — a market that includes both marketplace platform services and first-party e-commerce operations conducted by the same platform operators;
(c) "Marketplace platform services for third-party sellers in specific product verticals" — narrower markets defined by product category, such as marketplace platform services for home goods, marketplace platform services for fashion, or marketplace platform services for electronics?
3.  If any of these alternative market definitions were considered and rejected, what was the basis for the rejection? Was the rejection based on the results of a SSNIP analysis, on qualitative evidence, on prior Commission precedent, or on some other basis?
4.  Were there any internal disagreements among FTC staff — whether in the Bureau of Competition, the Bureau of Economics, or between the two bureaus — regarding the appropriate market definition? If so, what were the contours of those disagreements?
B. Commission Vote
1.  As discussed earlier, the Commission voted three to two to authorize the filing of the Complaint and the Administrative Complaint. Without disclosing the substance of privileged deliberative process communications, is the witness aware of whether the relevant market definition was a point of disagreement among the Commissioners?
2.  Did any Commissioner — whether in a public dissenting statement, in questions posed during the Commission's consideration of the staff recommendation, or in any other communication — express the view that the relevant market should be defined more broadly than "online marketplace platform services for third-party sellers in the United States"?
3.  Did any Commissioner express the view that the relevant market should be defined more narrowly — for example, limited to specific product verticals or specific types of marketplace platforms?
4.  Is the witness aware of whether the dissenting Commissioners' objections were based, in whole or in part, on disagreements with the staff's recommended market definition?
C. Third-Party Input
1.  During its investigation, did the FTC receive input on market definition from third parties? Specifically, did the FTC receive input from any of the following:
(a) The Independent Online Sellers Alliance ("IOSA"), a trade association representing independent third-party sellers, which is represented by Galloway & Peck LLP (Martina Galloway, partner). IOSA has been publicly vocal about marketplace platform practices. Did IOSA submit written comments, respond to FTC inquiries, or otherwise provide input regarding the appropriate market definition?
(b) Vertex Commerce Inc., the largest participant in the FTC's alleged relevant market. Did Vertex provide input on market definition, whether through a white paper, in response to a Civil Investigative Demand, or through informal communications with FTC staff?
(c) Nomad Shops LLC, the fourth-largest participant in the FTC's alleged relevant market. Did Nomad provide any input on market definition?
(d) Individual third-party sellers — other than through IOSA, did the FTC receive input on market definition from individual third-party sellers who sell on Pinnacle, CascadeMarket, or other marketplace platforms?
2.  To the extent not protected by privilege, what was the substance of the third-party input received by the FTC regarding market definition? Did any third party advocate for a broader relevant market definition — for example, a market that includes direct-to-consumer e-commerce or social commerce? Did any third party advocate for a narrower market definition?
3.  To what extent did the FTC rely on third-party input in formulating its market definition? Was third-party input treated as corroborative of the FTC's independent economic analysis, or did it play a more central role?
4.  Did any third party — including IOSA, Vertex Commerce, or Nomad Shops — take a position that is inconsistent with the market definition ultimately adopted in the Complaint?
IX. Topic 7: Geographic Market
1.  The Complaint defines the relevant geographic market as "the United States." Please confirm that this is the FTC's position.
2.  Did the FTC consider defining a narrower geographic market — for example, specific regions, states, metropolitan areas, or other sub-national geographies? Marketplace platforms may have varying penetration rates and competitive dynamics in different geographic areas. Did the FTC analyze geographic variation in marketplace platform usage, seller demographics, or consumer purchasing patterns?
3.  Did the FTC consider defining a broader geographic market encompassing cross-border e-commerce? Many marketplace platforms — including Vertex Commerce and Pinnacle — facilitate transactions between U.S. consumers and international sellers, an