One of the Biden administration's final acts will be securing a legal prohibition on the merger of two of America's largest grocery chains, Kroger and Albertsons — a deal that, had it gone through, would have created a combined company with more locations than Walmart and eliminated a major source of competition that keeps food prices stable.
The case, brought by outgoing progressive Federal Trade Commission chair Lina Khan, will likely be her last major action before she is ousted in the Trump administration. Khan stands to be replaced with a far-right, pro-merger commissioner who has vowed to focus more on fighting "DEI," "wokeness," and internal dissent against Trump than corporate misconduct.
But that may not matter long term, wrote Stacy Mitchell for The Atlantic — because the new precedent against megamergers could be hard to reverse.
"The rulings offer the clearest proof yet that the new antitrust movement is breaking through," wrote Mitchell. "This merger, which sparked fears of higher grocery prices and closed supermarkets, captured public attention in a way that few antitrust cases have. Judges are people too, and they are aware of the debates about corporate power and competition that have been taking place over the past decade."
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This is in some ways a return to form, she noted, because grocery stores were long prominent in historical antitrust action, with mergers being blocked and grocery chains being broken up frequently from the 1930s to the 1970s. But after that, conservative economists and scholars convinced federal agencies to leave grocery stores alone, leading to heavy consolidation in the industry that has led to Kroger and Albertsons as they currently exist.
For instance, "Kroger is not just Kroger; it’s also Harris Teeter, King Soopers, Fry’s, Ralphs, Smith’s, and more. Albertsons is Safeway, Jewel-Osco, Vons, Shaw’s, Acme, and others" — and consumers suffer as the combined mega-company has control over prices.
Khan challenged this status quo, for the first time in decades pushing the government to actually challenge supermarket mergers — and won, with the result that there is a new precedent for requiring a higher standard of competition in this industry.
With Trump's cronies at the helm, Mitchell continued, "For at least the next four years, major federal merger challenges might be scarce."
"Still, states will almost certainly continue advancing the ball on their own," said Mitchell. "In the long term, the door to revived competition enforcement has been decisively cracked open — and it won’t be so easy to shut."
The simple fact, she wrote, is that "Too many people — including judges and the voting public — are looking at the issue with fresh eyes," with over 100,000 people filing comments on the Kroger-Albertsons merger with the FTC, and "labor unions, small businesses, and farmers" uniting against it. Already more such cases are moving at the state level, with New York investigating the Capital One-Discover credit merger.
"The Kroger-Albertsons ruling might be the last hurrah of Lina Khan’s FTC tenure, but it probably will not be the last victory for the movement Khan represents," Mitchell concluded.