Last week an Oregon judge put a temporary hold on a merger between the nation’s second and fourth largest grocery store chains, Albertsons and Kroger.
These merger plans had been in the works for two years, and the deal was estimated to be valued at more than $20 billion. The decision centered around the issue of antitrust legislation and government action aimed at preventing monopolies and protecting consumers.
Over the past few years, under the Biden administration, the federal government has been more aggressively antitrust, preventing large deals between airlines, book publishers and now grocery stores. The whole landscape could change in a few weeks, however, as President-elect Donald Trump begins his second term in office.
Stacy Mitchell is co-executive director of the Institute for Local Self-Reliance, a think tank advocating for stronger antitrust enforcement. She joined Texas Standard to discuss. Listen to the interview above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: Before we talk about what a new Trump administration could mean for big mergers, let’s talk a little bit about the Albertsons-Kroger deal itself that recently fell through.
A few days after this merger unraveled, Albertsons actually filed a lawsuit against Kroger. Can you tell us a little bit about what that’s about?
Stacy Mitchell: Albertson’s claims that Kroger has violated the terms of their merger agreement. They say that Kroger didn’t actually make a good faith effort to try to get this merger through.
So Albertsons seems to be trying to perhaps recover some money or otherwise gain through that lawsuit.
Were you surprised by the fact that this Kroger-Albertsons merger fell through?
In some respects, no. I think the government made an incredibly persuasive case that this would harm a lot of people, that it would raise prices in a lot of markets, it would lead to shuttered grocery stores in many communities… that it put workers at risk.
But at the same time, the government has not actually tried to block a grocery merger in decades. And we have had just an incredible number of big supermarket mergers over the last 30 years, an industry that has become very consolidated.
So in that sense, this was, I think, a big turning point on antitrust law.
Well, the current head of the Federal Trade Commission is Lina Kahn, and the Federal Trade Commission handles a lot of these antitrust issues. Could you tell me a little bit about Ms. Kahn’s specific philosophy on antitrust matters and how that’s influenced what the FTC has done these past four years?
Lina Khan is a legal scholar who rose to prominence and was chosen by President Biden to lead the Federal Trade Commission on the basis of work that she had done as a scholar, really challenging the way that we’ve done antitrust for the last 40 years.
You know, the focus since the 1980s with antitrust has been on this idea that the goal should be to maximize efficiency. And really, the idea has been we should want companies to be bigger because bigger companies are, in theory, more efficient. That has been the guiding light.
And Kahn came into this role and said that she really challenged that thinking. And she’s been extraordinarily successful in turning the law around and bringing really a focus instead on the idea of dispersing market power and promoting competition.
Well, as we said, Lina Khan is a Biden appointee, which means that she will be replaced in a few weeks. And President-elect Trump has announced that a man named Andrew Ferguson is going to be her replacement. What do we know about him?
Ferguson is a Republican. He’s an attorney. He worked as chief counsel to Mitch McConnell, the Senate majority leader. He clerked for Clarence Thomas. And for a number of years, he worked in private practice defending large corporations in antitrust cases that had been accused of violating the law.
There is kind of something of a bit of a consensus, at least among some Republicans, that we have gone too far with consolidation. And Andrew Ferguson is someone who in recent years has expressed some of those concerns.
So I think at this point, it’s hard to know how exactly he’s going to steer the Federal Trade Commission. My best guess is that it’s going to be not as aggressively as Lina has in terms of addressing concentrated power, but that he’s also probably not going to try to revert things all the way back to where they were.
