Kroger’s $25 billion proposed takeover of rival Albertsons ultimately failed because two judges – one federal and the other from the state of Washington – didn’t buy the competitive vision the grocers were trying to sell, antitrust experts said.

Hours after the judges issued orders on Tuesday blocking one of the largest retail mergers ever, the deal died. On Wednesday, Albertsons announced it had called off the merger and was suing its former suitor for flubbing it. Kroger called the lawsuit “baseless” and hours later announced a massive $7.5 billion stock buyback.

Antitrust experts say a few core issues prompted the judges to say no, ultimately dooming the deal:

The judges didn’t agree with Kroger and Albertsons on competition

From the start, Cincinnati-based Kroger and Boise, Idaho-based Albertsons said the merger was necessary to stay efficient and competitive in a grocery industry increasingly dominated by nontraditional competitors like Walmart, Costco, Amazon, Aldi, Trader Joe’s and Dollar General. Key to their argument in court: regulators’ assessment of the market was too narrow because it focused on traditional grocery stores.

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But the legal precedent relevant to the merger defines their competitors as other supermarkets as well as supercenter operators like Walmart – and neither judge was convinced to alter that methodology. The narrow definition of who the competition was meant merging two competitors in a market posed a bigger risk to consumers of less choice and potentially higher prices.

“Traditional full-service grocery stores constituted the relevant market …  This (excluding nontraditional competitors) gave the merging parties a large share of the market,” William Kovacic, the director of the Competition Law Center at George Washington University, said.

Douglas Ross, an antitrust law professor at the University of Washington, agreed the narrower definition of competitors led the judges to decide there was a greater risk to preserving competition in the marketplace.

“They both agree the market is supermarkets and not something far broader,” Ross said. “Both agree that there are many geographic markets where the merger will result in high concentration.”

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The judges didn’t buy that C&S Wholesale was ready for the big-time

Also fatal was Kroger’s and Albertsons’ proposal to preserve competition in markets where their stores overlapped, experts said. The grocers said they would sell off 579 stores for $2.9 billion to New Hampshire-based C&S Wholesale Grocers, a supplier and retail operator in the grocery industry.

The problem? C&S Wholesale’s limited current retail footprint of fewer than 24 stores didn’t exactly scream major retail competitor, nor did the company’s spotty history of buying and selling or just closing grocery stores. One attorney for regulators even declared C&S was a “liquidator” not an operator.

The evidence and the arguments gave both judges pause, experts said.

“The divestiture buyer was found to be gravely deficient. This blew apart the fix,” Kovacic said.

The judges stuck with traditional – and sturdy - arguments

While regulators, particularly in the federal case, made a point of saying the merger could harm workers’ bargaining power, experts said the judges didn’t really address those concerns in their rulings. This was despite the FTC pressing a theory that the merger would create a “monopsony” for unionized grocery workers – an argument some experts thought had no legal precedent to support it and wouldn't hold up.

A monopsony is a situation where one company controls a market because they are a disproportionately large buyer of something and can force prices down - it is the opposite of a monopoly, where a company has a stranglehold on something for sale and sets prices high. In the Kroger case, regulators were worried the supermarket company would become too powerful being the largest employer of union grocery workers and could ultimately depress wages.

But the fact that the judges’ orders were based on traditional local market conditions made them less likely to be overturned in the event they were appealed, experts said.

“The fact that the orders are based on traditional antitrust principles makes them harder to appeal,”  Christine Bartholomew, a law professor at the University at Buffalo, said. “They didn’t rely on the labor issue. It’s the safest, most apolitical interpretation of antitrust.”

This story was updated to add a video.