FTC demands info of companies to probe supply chain disruptions
WASHINGTON — The Federal Trade Commission ordered nine large U.S. companies, including Walmart, Amazon and Procter & Gamble, to provide detailed information about their operations, in a bid to unravel the causes of the supply chain disruptions that are clouding the economic recovery.
The commission order, approved Monday on a 4-0 vote, came as President Joe Biden met at the White House with corporate chieftains of companies such as Food Lion, Mattel and Best Buy in the latest display of presidential concern over supply chain snarls.
While the FTC move will do nothing to ease the economy’s current bottlenecks, it could shape future regulatory actions intended to maintain or increase the amount of competition in key industries, according to antitrust specialists.
The White House and some independent analysts have blamed a lack of competition throughout the supply chain for many of the current problems, which are fueling inflation and depressing the president’s approval ratings. Biden this summer issued an executive order calling for regulators to crack down on consolidation in the ocean shipping and freight rail industries as part of a broader competition initiative.
“We’ve had an incredible amount of consolidation in the supply chain . ... That’s why it’s been unable to withstand the kind of shock we’ve seen with the pandemic,” said Diana Moss, president of the American Antitrust Institute. “We are now learning the hard way what 40 years of unbridled consolidation and lax merger enforcement mean.”
FTC Chair Lina Khan said the goal of the commission study is to “shed light on market conditions and business practices that may have worsened” the supply jams.
In recent weeks, top administration officials have worked to hammer out agreements among ocean carriers, port executives, terminal operators and trucking companies to smooth tangled supply lines. At the neighboring ports of Los Angeles and Long Beach, longshore workers have made headway clearing out some of the tens of thousands of shipping containers that have been crowding the docks.
Yet other problems, including stacks of empty containers bound for Asia, continue to hobble operations.
The FTC launched the supply chain probe using its authority to conduct wide-ranging studies without a specific law enforcement purpose. Such efforts can uncover information that would lead officials to open an investigation or could reshape their enforcement strategy.
The commission is an independent agency that shares responsibility for antitrust enforcement with the Department of Justice and can crack down on deceptive business practices that harm consumers.
A commission spokeswoman did not respond to a request for comment.
With its supply chain probe, the commission will need to distinguish between price increases that reflect the workings of supply and demand and those that result from improper business links, said a former FTC official, who asked for anonymity to discuss the commission’s work.
FTC lawyers will review information gathered from the individual companies, looking for indications that producers and wholesalers may have contractual arrangements that favor large retailers over their smaller rivals, the former official said.
“They’re trying to see if there are things gumming up the works,” the former official added.