As the nation awaits the outcome of a legal battle pitting the Federal Trade Commission (FTC) against Kroger over the grocery chain’s proposed merger with Albertsons, several senators have recently filed an amicus brief in support of the FTC.
Unfortunately, the senators err by repeating the FTC’s erroneous accusation that the merger would harm competition in the union grocery labor market. Yet again, the FTC relies on narrow market definitions. This time ignoring segments of retail competitors as it advances novel legal theories that work backward from its pre-ordained outcomes. Let’s set the record straight.
The FTC once again relies on novel and weak legal theories to make a case out of nothing. Instead of relying on traditional arguments that the merger may increase prices, the FTC alleges that the merger will hurt union workers by lowering the competition to attract workers with higher pay and more benefits. That may be the case in some already uncompetitive industries, but not in retail.
As legal expert Alexander Thomas MacDonald notes in a piece for the Federalist Society, retail workers learn in-demand and highly transferable skills desired by many other employers across the entire retail industry, including stores like Costco, Home Depot, CVS, Dollar General, and Best Buy. The FTC sidesteps this broad worker desirability by defining the market as only union workers, thereby defining outside the scope of the market all of the retailers looking to hire workers with retail experience. Besides, Kroger and Albertsons have repeatedly pledged extra care to preserve union jobs, and some regional unions have even endorsed the merger.
Torture market definitions long enough and everything becomes a monopoly—and that is exactly what the FTC has been doing for years: manipulating definitions to justify more aggressive enforcement actions. Multiple lawsuits against major tech companies, such as against Apple and Microsoft, serve as useful reminders. But that’s unsurprising.
As the FTC distances from consistent, objective, and consumer-focused measures of harm like the Consumer Welfare Standard (CWS), regulatory subjectivity replaces objective standards. Without those guardrails, of course, new definitions must be defined by those enforcing the rules. While the unmooring of antitrust law from consumer welfare has been a travesty for consumers, it has been a boon for regulators who are now able to use novel antitrust legal arguments to crack down on disliked mergers.
The amicus brief from senators in favor of preventing the Kroger-Albertsons merger reiterates multiple points from the complaint, including even its most unorthodox argument. By expanding the scope of antitrust law to labor markets the FTC is doubling down on both its use of overly narrow market definitions and novel arguments to further goals beyond consumer welfare in the antitrust space. This is old news—but American consumers continue to bear the weight of poor decision-making at the FTC.
Trey Price is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us at www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.