Supermarket chain Kroger is challenging the Federal Trade Commission’s actions in blocking Kroger’s $25 billion merger with Albertsons, the biggest proposed supermarket deal in American history. The lawsuit alleges that the FTC is violating the US Constitution by using its in-house tribunal to challenge the merger, leading Kroger to seek a ruling in federal court in Cincinnati instead. This process represents a key test case and could significantly impact how the federal government challenges mergers and enforces antitrust laws moving forward.
The FTC typically enforces antitrust laws by suing companies or using its in-house administrative judges to issue rulings or reach settlements outside of court. In the case of Kroger’s merger with Albertsons, the FTC pursued both options, leading Kroger to challenge the process as unconstitutional. Experts believe that a Kroger victory in this lawsuit could have a seismic impact on the federal government’s ability to regulate mergers and prevent monopolies, potentially giving more power to corporations to raise prices and limit consumer choice.
Kroger is arguing that the FTC’s use of in-house tribunals violates the Constitution in two ways: by having a judge who is not removable by the President and by handling the case in the executive branch instead of in the courts. The company is citing a Supreme Court ruling in June that limited the power of regulatory agencies to enforce rules through in-house reviews, instead of through jury trials. Kroger CEO Rodney McMullen emphasized that the merger with Albertsons is focused on bringing customers lower prices and securing good-paying union jobs, and the company is prepared to defend the merger in federal court.
The FTC has declined to comment on the lawsuit, with a source dismissing it as a “desperate Hail Mary” move by Kroger. The lawsuit is part of a broader effort by corporate America to push back against what some view as regulatory overreach, with even Democratic megadonors expressing concerns about the FTC’s efforts to fight monopolies during the Biden administration. The legal landscape for federal agencies enforcing regulations has recently shifted with Supreme Court decisions that limit agency power, including the overturning of the Chevron Doctrine, which has weakened agencies’ ability to approve regulations.
Antitrust experts believe that a Kroger victory in this lawsuit would significantly impact the operations of the FTC and other federal agencies, potentially limiting their ability to regulate mergers and prevent monopolies. The recent series of Supreme Court decisions against federal agencies raises the possibility that a claim like Kroger’s could be successful, as legal challenges to the administrative state gain momentum in the current legal landscape. The outcome of this lawsuit could have far-reaching implications for how antitrust laws are enforced in the United States and the balance of power between corporations and regulators.
