Mixing Retail and Software: The FTC’s Blend of Structural and Behavioral Remedies in 365 Retail/Cantaloupe

On May 1, 2026, the Federal Trade Commission (FTC) approved 365 Retail Markets’ approximately $848 million acquisition of Cantaloupe, Inc. (Cantaloupe), a transaction combining two providers of micromarket foodservice kiosks in the United States, subject to a consent order imposing both structural divestitures and behavioral conditions. The order requires 365 Retail to divest Cantaloupe’s Three Square Market kiosk business to Seaga Manufacturing, Inc. (Seaga) and comply with ongoing interoperability and nondiscrimination obligations for a period of ten years. In a 2-0 vote approving the transaction, Commissioner Mark Meador issued a concurring statement emphasizing the role of early engagement by the parties and the importance of tailored remedies in concentrated markets. We discuss the implications of this development for dealmakers in more detail below. 

Key Takeaways

• Remedies remain a viable path — including with behavioral components. 
  The consent order in 365 Retail/Cantaloupe reflects the FTC’s continued willingness to address competitive concerns about a transaction through negotiated remedies rather than challenging the deal. The order pairs a traditional structural divestiture with behavioral provisions designed to “directly eliminat[e] the mechanisms through which future foreclosure could occur.” Commissioner Meador acknowledged that “in certain limited cases, behavioral relief may be appropriate,” particularly where it is “necessary to guard against the likelihood of foreclosure that would otherwise undermine the proposed divestitures.” The 365 Retail/Cantaloupe order is consistent with the Trump administration’s broader enforcement posture, reaffirming structural remedies as the preferred tool while accepting behavioral components where necessary. As Chairman Ferguson stated in his concurring statement for the Synopsys/Ansys consent order, “experience teaches that behavioral remedies should be treated with substantial caution.”
• The FTC remains focused on pocketbook issues impacting everyday costs for Americans. 
  The complaint alleges that the acquisition would ultimately “increase the cost of food at micromarkets to end consumers, including at the breakroom table of many blue-collar workers.” This framing is consistent with the FTC’s broader pattern of emphasizing tangible consumer harms and cost-of-living impacts when articulating competitive concerns.
• Proactive remedies engagement may be a suitable option. 
  Commissioner Meador credited the parties’ proactive settlement discussions, noting that the transaction “represent[ed] a strong example of the efficiency of the premerger review program” and “illustrate[d] how early, good-faith engagement can yield settlement outcomes that restore competition and benefit consumers.” He further implied that such remedy offers must adequately address any concerns by stating that “[t]hat obligation was met here, which facilitated a remedy that fully addressed the competitive concerns that staff identified.” Transacting parties facing potential deal scrutiny with commercially viable divestitures should consider whether early agency engagement on remedies is the best path to closing the transaction.

Background on the Transaction

The FTC alleged that 365 Retail’s acquisition of Cantaloupe would combine “two of only a few competitors” in the provision of “micromarket kiosks and related software and services to food operators” in the US. According to the complaint, micromarket kiosks are self-checkout point-of-sale systems deployed in unattended mini-convenience stores commonly situated in offices, workplace breakrooms, and other private or semi-private locations. The FTC alleges that 365 Retail holds roughly 70% or more share of micromarket kiosks and that Cantaloupe, following its 2022 acquisition of Three Square Market, is the second-largest provider and has internally described the competitive landscape as a “duopoly.” The complaint alleges that other competitors lack “significant scale, scope, or core focus on micromarket kiosks to replicate the current closeness of competition between 365 and Cantaloupe.” 

The complaint further alleges that both 365 Retail and Cantaloupe provide back-office software including vendor management software (VMS) and warehouse management software (WMS) both for their own kiosks and for kiosks owned by third-parties. VMS enables foodservice operators to aggregate sales data, monitor pricing, and manage promotions across their micromarket and vending locations, while WMS optimizes inventory stocking, warehouse, and delivery routing across these locations. The FTC alleges that Cantaloupe has a “significant position” in VMS and that 365 Retail offers the “leading integrated software/hardware WMS solution.” 

According to the FTC, the 365 Retail/Cantaloupe transaction would eliminate direct competition between the parties, increase 365 Retail’s ability to “unilaterally exercise market power,” and provide 365 Retail with the “incentive and ability” to foreclose access to or raise rivals’ costs for Cantaloupe’s VMS and/or the combined entity’s micromarket kiosks. Regarding the latter theory of harm, the FTC argues that such foreclosure or increased costs for foodservice operators would harm competition, create barriers to entry, and ultimately increase the costs of food at the “breakroom table of many blue-collar workers.”  

Overview of the Consent Order

The FTC’s consent order requires 365 Retail to divest Cantaloupe’s Three Square Market business to Seaga and agree to a number of behavioral provisions aimed at ensuring ongoing interoperability between the combined entities’ micromarket kiosks and back-office support software. The duration of the order is 10 years, and it requires 365 Retail to employ a monitor to evaluate compliance with the order. 365 Retail must also provide the FTC with “prior notice”—at least 30 days in advance—of any future transactions involving micromarket kiosks for the next decade. 

According to the press release, Seaga is not currently an active participant in the provision of micromarket kiosks, but it provides unattended foodservice offerings in an adjacent space. The FTC believes that this divestiture of a standalone business unit complete with facilities, intellectual property, equipment, contracts, and business goodwill will enable Seaga to operate as a “tech-enabled, vertically integrated competitor in micromarket kiosks.” While the order does not detail whether the divested assets include VMS or WMS software, Commissioner Meador notes that the divestiture includes Cantaloupe’s “micromarket kiosk business and related software services.” and Three Square Market publicly touts its VMS software. He further details that Seaga’s incentives to develop its own hardware and software services “significantly mitigate typical vertical or ecosystem lock-in concerns that often accompany transactions of this nature.” 

Interoperability Provisions

To address the alleged interoperability concerns stemming from the integrations between competing kiosk providers and Cantaloupe’s VMS or denying rival VMS and WMS providers access to 365 Retail’s kiosks, the FTC prohibits 365 Retail from discriminating against any third-party or customer integrations by requiring it to offer integrations on the same or similar terms regardless of the identity of the requesting party, and barring it from downgrading, inhibiting, or altering existing integrations. The order, however, includes narrow exceptions where 365 Retail is not required to develop or facilitate integrations where it has reasonable basis to believe that the integration would create data security issues or threaten the business or reputation of 365 Retail or its customers. 365 Retail must also abide by National Automatic Merchandising Association (NAMA) industry standards, charge only reasonable integration fees, refrain from using confidential information obtained through integrations, and treat all customers equally with respect to data access. Any instance in which 365 Retail does not comply with or complete an integration request triggers a supplemental compliance reporting obligation that requires 365 Retail to identify the customer or third party, describe the reasons for denial, and provide any other information relevant to understanding the circumstances. Commissioner Meador described these interoperability provisions as “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.” 

Prior Notice of Future Transactions

According to Commissioner Meador the prior notice provision was a “particularly” important safeguard here “in light of 365 Retail’s history of serial acquisitions.” The FTC’s overall approach to prior notice and prior approval provisions in consent orders has shifted between the Biden and second Trump administration. During the Biden administration, the FTC rescinded its 1995 policy statement limiting the use of prior notice or prior approval to cases in which there was a “credible risk” of recurrence. According to then-Chair Lina Khan, the use of these provisions was important to conserve agency resources and to avoid a situation in which the FTC is “forced to re-do all this work any time the companies attempted a similar acquisition—even though the agency had already previously determined that this type of deal was illegal.” In keeping with this position, the agencies required prior notice or prior approval in three-quarters of the merger consent orders during the Biden administration. In contrast, Chairman Ferguson advises caution in employing prior approval noting that while “Congress certainly could have imposed a prior approval regime,” they did not and advised that “[][the FTC] must keep Congress’s choice in mind as we consider prior-approval provisions.” For merger consents negotiated during the second Trump administration, only one has included prior approval and approximately one-third require prior notice. Chairman Ferguson and Commissioner Meador’s statements regarding prior approval and prior notice respectively suggest we should expect the FTC to use these provisions more sparingly than the prior administration did.  

Looking Ahead

The FTC’s consent order in 365 Retail/Cantaloupe provides several lessons for dealmakers going forward: (1) Remedies continue to be possible, even when deals have non-horizontal entanglements; (2) transactions in industries impacting everyday household costs are likely to receive enhanced scrutiny; and (3) early remedy negotiations could be a viable path to close. However, it’s important to note that Commissioner Meador advised that “case-specific features of this market warranted the tailored approach reflected in this order,” and he further warns that “different circumstances in a different market could easily justify a different outcome.