Amid all the competing headlines of the 2024 election, there may be no more bread-and-butter issue—literally—than how much Americans are paying to put food on their tables. The GOP is gearing up to attack the Biden-Harris administration for escalating grocery store bills, while presumptive Democratic nominee Kamala Harris has now responded with her own plan to fight higher food prices. 

One of the hottest items in this political food fight is unquestionably the ongoing litigation from the Federal Trade Commission (FTC) attempting to block the Kroger-Albertsons grocery store merger. A host of Democratic lawmakers recently joined the legal fight, arguing that any potential merger would raise prices, increase food deserts, and disproportionately hurt unionized labor. As part of her new food price plan, Harris included a call for aggressive antitrust crackdowns in the food and grocery industry, mentioning the Kroger-Albertsons merger by name in her speech this week.

None of the arguments against the merger make much sense on the merits, but the FTC—and the Democratic Party writ large—are stacking the legal deck to achieve a predetermined outcome that conveniently aligns with their policy priorities.

The saga started back in October 2022, when The Kroger Company and Albertsons Companies Inc. (the parent company for popular grocery chains like Safeway and Acme, among others) announced their plans for a $24.6 billion merger. The FTC promptly launched a 16-month investigation, culminating in a lawsuit in federal court to block the proposed merger.

Kroger is the fourth-largest grocery store chain in America—behind Walmart, Amazon, and Costco—and Albertsons is the fifth-largest. Once merged, the combined company would rise to third on the list. On the surface, this may seem to provide some support for the FTC's position, but American shoppers would be wise to read the fine print.  

In truth, if the deal were to proceed, a merged version of Kroger and Albertsons would still only make up 9 percent of overall grocery sales. To put this in further perspective, consider that Walmart—the nation's largest grocery provider—would continue to operate more stores (including its Sam's Club outlets) than a Kroger-Albertson combo and maintain grocery revenue that is more than twice that of the merged company. 

One could easily argue, in other words, that far from being a monopoly, a Kroger-Albertsons joint venture would be the best hedge against potential monopolies forming among the even-more-dominant firms above it on the grocery store food chain. But incredibly, the FTC pretends that two of those larger companies don't exist in the marketplace at all simply by working with their own definitions.

The FTC contends that only local brick-and-mortar supermarkets (what one might think of as a "traditional" grocery store) and hypermarkets (such as Walmart or Target, which sell groceries alongside other goods) count in the market for groceries. This narrow definition completely circumvents wholesale-club stores (such as Costco) and e-commerce companies that sell groceries (such as Amazon). 

Given that Amazon and Costco just happen to be the second- and third-largest grocery retailers in the United States, the agency is blatantly gerrymandering the definition of the marketplace. The agency's longstanding position is that the only relevant market is stores where consumers can buy all or nearly all of their weekly groceries, which begs the question: Has anyone at the FTC stepped foot inside a Costco recently? Many Americans use club stores like Costco and BJ's Wholesale Club as their primary grocery stores, with around 15 percent of Americans ages 18–34 reporting that they do most of their grocery shopping at Costco.  

Pretending that the internet doesn't exist makes even less sense. As the International Center for Law and Economics notes, 25 years ago a mere 10,000 households took part in online shopping, whereas today 12.5 percent of consumers (or over 16 million people) purchase their groceries "mostly or exclusively" online. Amazon is also preparing to make its own big push into brick-and-mortar grocery retailing as well, with CEO Andy Jassy saying last year that the company must "find a mass grocery format that we believe is worth expanding broadly."

Beyond the FTC's tortured marketplace definitions, its arguments for the alleged harms of a conjoined Kroger-Albertsons are equal parts unconvincing and outdated. In its complaint, the agency points to escalating grocery prices in recent years, and Harris echoed this by stating that she would enact a "ban on price gouging on food and groceries" by directing the FTC to impose "harsh penalties" on grocers. She also pledged to continue aggressive antitrust enforcement in the food sector, going so far as to highlight the Kroger-Albertsons merger as an example of the type of deal that could increase prices. However, as many commentators have pointed out, food price increases likely have more to do with inflation than any lack of competition in grocery markets.

In addition to the consumer price harms the FTC alleges, over half of the agency's legal complaint focuses on the alleged harm the proposed merger would cause to the unionized workers at Kroger and Albertsons. Both companies are heavily unionized—in contrast to Walmart and Amazon—and the agency claims that a combined company would have more leverage over unions given that the unions would no longer be able to play one company off against the other as a negotiating tactic. This glosses over the fact that the demand for labor is particularly competitive in the retail sector broadly, and workers could easily just jump ship to a different employer in the face of any exploitative terms pushed by the merged firm.

A final concern highlighted by some Democratic lawmakers is that a merged company could result in more store closures that lead to geographical areas within which there are few or no grocery options. Once again, this ignores the rise of club stores like Costco and online/home delivery grocery options. These alternatives reduce the plausible areas within which such food deserts can take hold, showing once again a poor understanding of the modern grocery marketplace.

Despite the many dubious underpinnings of the FTC's challenge, it fits with the Biden administration's aggressive antitrust emphasis over the past four years. While some observers were holding out hope that a Harris administration might curtail overzealous antitrust enforcement, her new food price agenda has poured cold water all over that (already wishful) thinking.

The post Harris Joins the FTC's Food Fight Against Kroger-Albertsons Merger appeared first on Reason.com.

Did you know that Google has been embroiled in a legal battle since 2020? You'd be forgiven if you didn't, as it hasn't been at the forefront of the news for a while now. However, the case has finally wrapped up with a pretty big result; the US Department of Justice has found Google guilty of breaching antitrust laws.

Remember last month when ExTwitter excitedly “rejoined GARM” (the Global Alliance for Responsible Media, an advertising consortium focused on brand safety)? And then, a week later, after Rep. Jim Jordan released a misleading report about GARM, Elon Musk said he was going to sue GARM and hoped criminal investigations would be opened?

Unsurprisingly, Jordan has now ratcheted things up a notch by sending investigative demands to a long list of top advertisers associated with GARM. The letter effectively accuses these advertisers of antitrust violations for choosing not to advertise on conservative media sites, based on GARM’s recommendations on how to best protect brand safety.

The link there shows all the letters, but we’ll just stick with the first one, to Adidas. The letter doesn’t make any demands specifically about ExTwitter, but does name the GOP’s favorite media sites, and demands to know whether any of these advertisers agreed not to advertise on those properties. In short, this is an elected official demanding to know why a private company chose not to give money to media sites that support that elected official:

Was Adidas Group aware of the coordinated actions taken by GARM toward news outlets and podcasts such as The Joe Rogan Experience, The Daily Wire, Breitbart News, or Fox News, or other conservative media? Does Adidas Group support GARM’s coordinated actions toward these news outlets and podcasts?

Jordan is also demanding all sorts of documents and answers to questions. He is suggesting strongly that GARM’s actions (presenting ways that advertisers might avoid, say, having their brands show up next to neo-Nazi content) were a violation of antitrust law.

This is all nonsense. First of all, choosing not to advertise somewhere is protected by the First Amendment. And there are good fucking reasons not to advertise on media properties most closely associated with nonsense peddling, extremist culture wars, and just general stupidity.

Even more ridiculous is that the letter cites NAACP v. Claiborne Hardware, which is literally the Supreme Court case that establishes that group boycotts are protected speech. It’s the case that says not supporting a business for the purpose of protest, while economic activity, is still protected speech and can’t be regulated by the government (and it’s arguable that what does GARM does is even a boycott at all).

As the Court noted, in holding that organizing a boycott was protected by the First Amendment:

The First Amendment similarly restricts the ability of the State to impose liability on an individual solely because of his association with another.

But, of course, one person who is quite excited is Elon Musk. He quote tweeted (they’re still tweets, right?) the House Judiciary’s announcement of the demands with a popcorn emoji:

So, yeah. Mr. “Free Speech Absolutist,” who claims the Twitter files show unfair attempts by governments to influence speech, now supports the government trying to pressure brands into advertising on certain media properties. It’s funny how the “free speech absolutist” keeps throwing the basic, fundamental principles of free speech out the window the second he doesn’t like the results.

That’s not supporting free speech at all. But, then again, for Elon to support free speech, he’d first have to learn what it means, and he’s shown no inclination of ever doing that.

Aging satellite TV provider Dish Network is supposed to be undergoing a major transformation from tired old satellite TV provider to streaming and wireless juggernaut. It was a cornerstone of a Trump administration FCC and DOJ plan to cobble together a new wireless carrier out of twine and vibes as a counter-balance to the competition-eroding T-Mobile and Sprint merger.

It’s… not going well. All of the problems critics of the T-Mobile and Sprint merger predicted (layoffs, price hikes, lest robust competition) have come true. Meanwhile Dish has been bleeding satellite TV, wireless, and streaming TV subscribers for a while (last quarter the company lost another 314,000 TV subscribers, including 249,000 satellite TV subs and 65,000 Sling TV customers).

Dish’s new 5G network has also generally been received as a sort of half-hearted joke. Dish also lost 123,000 prepaid wireless subscribers last quarter; it can’t pay its debt obligations, can’t afford to buy the spectrum it was supposed to acquire as part of the Sprint/T-Mobile merger arrangement; and expanding its half-cooked 5G network looks tenuous at best.

Last year Dish proposed merging with Echostar in a bid to distract everybody from the company’s ongoing mess. They’ve also tried to goose stock valuations by hinting at an equally doomed merger with DirecTV. But those distractions didn’t help either, and there are increasing worries among belatedly aware analysts that this all ends with bankruptcy and a pile of rubble:

“MoffettNathanson analyst Craig Moffett offered a blunt assessment of the company’s future based on Dish’s deteriorating pay-TV and mobile subscriber customer base: “Dish’s business is spiraling towards bankruptcy. Gradually, then all at once, the declines are gathering speed,” he wrote in a research note.”

From 2019 or so I noted that this whole mess was likely a doomed effort, primarily designed to provide cover for an anti-competitive, job-killing wireless merger. It always seemed likely to me that Dish (which had never built a wireless network) would string FCC regulators along for a few years before selling off its valuable spectrum assets and whatever half-assed 5G network it had managed to construct.

Despite this, trade magazines that cover the telecom industry tried desperately to pretend this was all a very serious adult venture, despite zero indication anyone involved had any idea what they were doing. And the deal rubber stamping and circular logic used to justify it ran in very stark contrast to the ongoing pretense that we supposedly care about “antitrust reform.”

Ultimately Dish will make a killing on spectrum, the FCC will fine them a relative pittance for failing to meet the flimsy build requirements affixed to the merger conditions, and Dish CEO Charlie Ergen will trot off into the sunset on a giant pile of money. Some giant player like Verizon will then swoop in to gobble up what’s left of the wreckage, and the industry will consolidate further (the whole point)

The regulatory impact of approving Sprint/T-Mobile, which consolidated the U.S. wireless market from four to three major providers (jacking up prices and killing off thousands of jobs), will be forgotten, and the regulators and officials behind the entire mess will have long ago moved on to other terrible, short-sighted ideas.