The National Grocers Association expressed its approval of the Federal Trade Commission and Department of Justice's jointly released final version of its 2023 merger enforcement guidelines. The document revises the existing standards and introduces new considerations for mergers that enhance buyer power.
In a shift noted by the NGA, the guidelines consider how buyer power impacts competition amongst rival firms and trading partners, a major contrast to the current guidelines that ignore how buyer power abuses impact competition, according to NGA.
These updates signify a departure in merger enforcement, reflecting an effort to address concerns raised by the NGA through comments submitted in September to the FTC and DOJ on the proposed guidelines, it said. The NGA emphasized the need for agencies to scrutinize how dominant firms utilize their bargaining leverage to impose discriminatory terms on their rivals.
“Following decades of consolidation, the current grocery landscape is dominated by a few national chains who wield so much economic influence they can undercut competitors simply by demanding preferable treatment from suppliers. This pattern has resulted in anticompetitive economic discrimination against independent grocers and their customer base,” said Chris Jones, SVP of government relations and counsel at NGA, in a statement. “The revised Merger Guidelines released today signifies a major course correction in antitrust enforcement that recognizes the competitive dangers of buyer power.”
The 2023 Merger Guidelines emphasize the dynamic and complex nature of competition ranging from price competition to competition for the terms and conditions of employment, to platform competition, according to the FTC. This approach enables the agencies to assess the commercial realities of the U.S.’s modern economy when making enforcement decisions and ensures that merger enforcement protects competition in all its forms.
“Fair, open, competitive markets have been essential to America’s dynamic, thriving economy, and policing unlawful mergers is our front line of defense against harmful corporate consolidation,” said FTC Chair Lina M. Khan, in a statement. “The 2023 Merger Guidelines reflect the new realities of how firms do business in the modern economy and ensure fidelity to statutory text and precedent. I am grateful for the thousands of comments submitted by American workers, consumers, entrepreneurs, farmers, business owners, and other members of the public. This input directly informed the guidelines and allowed us to pursue this work with a deeper understanding of the real-life stakes of merger enforcement.”
The Guidelines are not legally binding, rather they provide transparency into the agencies’ decision-making process. The revisions were released while Kroger and Albertsons await a final decision from the FTC regarding the status of their merger. In January, the agency will either approve the $24.6 billion merger or sue to block it.
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