A federal court sides with the FTC, which argued that a Tapestry-Capri merger would raise prices for handbags.

A federal judge on Thursday blocked Tapestry Inc.’s planned $8.5 billion acquisition of Capri Holdings, agreeing with regulators that the deal would hurt competition in the handbag industry.

A federal court judge has blocked the proposed merger between Tapestry-owned Coach and Capri parent Michael Kors. The reasoning behind the judge's order wasn't immediately clear but the FTC had previously argued the merger would harm consumers, raise prices and reduce employee benefits.