Asked to combine work with competitors, but competitors are under ethical investigation Got a manuscript accepted and then pulled because of a similar manuscript submitted by another group to the same journal. Per the request of the editor, two groups combined the manuscripts. Now the manuscript was held up for unknown reasons. 

I re-read the other group's manuscript and found a number of serious flaws. I don't think any reviewer would pass those up. Now I really regret combining the manuscripts with the other group, but it was the editor's request. 

In addition, there were some ethical issues with the other group (gift authorship), which may have been reported to the journal by our research integrity officer. 

Should I just ask the editor if they will reconsider publishing our data alone with addition of the new data that the journal wanted without having to take the whole mess with us? I am really frustrated now.
If there is any kind of ethical problem with the other group, you need to avoid involvement in unethical behavior as much as possible.  Tell the editor that, owing to ethical concerns, you are no longer willing to work with the other group.  You can ask them to consider publishing your work separately, but you should be clear that you would prefer to take your work to another journal instead of combining the manuscripts.