2024-08-21 18:17:35
A crucial battle that could cause a “seismic” upheaval in US antitrust policy is set to go to court after supermarket chain Kroger’s bold move to sue the Federal Trade Commission (FTC).
The lawsuit aims to weaken how Washington fights mergers that raise prices for consumers and is part of a broader effort by American businesses to push back against what they see as excessive regulatory interference.
The lawsuit is a major test and the latest attempt to reshape the administrative state in America.
Even businessmen, who are big donors to Democrats, have argued that the FTC’s antitrust efforts have faltered during the Biden administration, CNN reports.
Trying to cancel the merge
Kroger claims the Federal Trade Commission (FTC) is violating the US Constitution by using an administrative tribunal to challenge Kroger’s mega-$25 billion merger with Albertsons — the largest announced supermarket deal in American history .
In February, the FTC filed a lawsuit to block the $25 billion deal announced in 2022.
Against prices and jobs
The Federal Commission argued that the merger it would raise prices, close stores, and eliminate jobs.
Kroger has argued that the deal it will do just the opposite, helping supermarket chains compete with giants such as Amazon, Costco and Walmart.
“We stand ready to defend the merger in federal court – the appropriate venue for this matter,” said Kroger CEO Rodney McMullen. “We are asking the Court to stop the illegal FTC administrative tribunal proceeding.”
McMullen added that the merger between Kroger and Albertson’s is “absolutely focused on making sure we offer our customers lower prices from day one, while ensuring the future of good-paying union jobs.”
“It would ‘take out’ an arrow from the FTC’s quiver”
“The entire administrative structure is under legal attack right now,” said Rebecca Haw Allensworth, a professor of antitrust law at Vanderbilt Law School.
Allensworth said a victory for Kroger would amount to a “seismic shift” in the way the FTC and other federal agencies operate.
“It would certainly take an arrow out of the FTC’s quiver,” he added.
The FTC typically enforces antitrust in two ways: It can sue companies, or use in-house judges to issue rulings or reach out-of-court settlements. In Kroger’s case, the FTC actually pursued both options, seeking to block the merger.
Kroger claimed the FTC’s legal process is unconstitutional.
The Supreme Court’s landmark decision
Kroger’s lawsuit, filed Monday in federal court in Cincinnati, is based in part on a landmark Supreme Court ruling in Junewhich further limited the power of regulators.
Specifically, the judges limited the SEC’s power to enforce the laws through internal review processes instead of jury trials.
Experts say a Kroger win will set the stage a seismic shift in the way the federal government challenges mergers. US officials fear that weakening regulators’ ability to fight monopolies could hurt consumers by giving companies too much power to raise prices and close stores.
“This is a huge issue. If they succeed and the appeals courts agree, one of the main arms for antitrust policy is literally being cut off at the elbow.” said Christine Bartholomew, a law professor at the University at Buffalo School of Law.
“It will be one radical change in the way we conduct antitrust policy in this country.”
Bartholomew said she is “concerned” because if the FTC is no longer able to use its own in-house tools, it likely there will be less antitrust scrutiny of corporate mergers.
“More concentration, higher prices and fewer choices for consumers”
“The risk is more deals, more concentration and potentially higher prices and less choice for consumers,” he said.
Next week, Kroger faces court in Portland, Oregon over the deal. The FTC has asked the judge in that case to temporarily block the deal while its own court reviews the transaction between Kroger and Albertsons.
naftemporiki.gr