Antitrust enforcement has increasingly moved its focus away from the consumer and divorced itself from economic analysis. New leadership represents an opportunity to change course.

The change in priorities regarding antitrust under the Biden administration was on full display after the Kroger-Albertsons merger was blocked by courts. Even a cursory examination of the complaint — specifically the changes in relevant markets — shows the Federal Trade Commission was unconcerned with the realities of competition and increasingly preoccupied with non-consumer effects.

Kroger has been the repeat recipient of antitrust complaints. In 2000, the FTC filed a complaint against its proposed acquisition of the grocery chain Winn-Dixie, followed by a complaint filed in 2002 against its proposed acquisition of select Raley’s supermarkets. Apart from a defendant, these complaints have in common the cases defined the relevant market as “retail sale of food and grocery items in supermarkets.”

In the most recent complaint against Kroger, the agency broke from tradition and a consumer focus by including three relevant markets.

One of the markets in the current complaint is defined as “the retail sale of food and other grocery products in traditional supermarkets and supercenters,” which largely mirrors the previous definitions except for the clarification of traditional and the added categorization of supercenters.

At first glance, such language expands the market scope. However, additional stipulations clarify that the market has narrowed, not expanded. In the context of the complaint, supermarkets exclude membership stores like Costco, stores with limited assortments like Aldi, premium stores like Whole Foods, dollar stores or similar stores with discount offerings, and online retailers like Amazon.

This market definition ignores how consumers shop in the real world and, therefore, the real and tangible competition faced by Kroger and Albertsons. The reality is that Kroger is trying to compete in a computer-centric 21st century.

Kroger faces a declining share of the grocery store market. According to Kroger, the acquisition was driven by the need to better compete against retailers like Amazon, as online grocers are becoming an increasingly important component of the grocery market. Those competitors were arbitrarily defined outside of the market — a mistake permeating the nationwide legal system.

Read the full article here.

Tirzah Duren and Trey Price work on Tech and Antitrust policy for the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.theamericanconsumer.org or follow us on Twitter @ConsumerPal.

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