The Antitrust Week In Review
Here are some of the developments in antitrust news this past week that we found interesting and are following.
U.S. antitrust enforcer, FBI announce effort to deter, identify collusion. The U.S. Justice Department’s Antitrust Division and the FBI announced an initiative to detect and prosecute companies that take advantage of supply chain disruptions to collude with rivals in order to raise prices. The administration has made fighting inflation a priority as U.S. consumer prices rose solidly in January, leading to the biggest annual increase in inflation in 40 years. The division is making existing investigations a priority if it appears that competitors may have used supply chain disruptions, potentially caused by the coronavirus pandemic or shipping woes, as a way to hide collusion, the department said.
Pentagon seeks to boost competition in shrinking defense contractor base. The Biden administration released a report detailing recommendations to boost competition in its defense industrial base because rapid consolidation has created a national security risk. The number of aerospace and defense prime contractors to the Defense Department – a group known as the defense industrial base – has shrunk from 51 to just 5 since the 1990s, the report said. It added that 90% of missiles come from 3 sources. Having only a small number of sources for defense needs “can pose mission risk and, particularly in cases where the existing dominant supplier or suppliers are influenced by an adversary nation, pose significant national security risks,” the report said.
U.S. FTC judge dismisses antitrust complaint against Altria, Juul. A judge at the U.S. Federal Trade Commission has dismissed a complaint that the agency filed aimed at requiring Marlboro maker Altria Group to sell a minority investment in e-cigarette firm Juul Labs Inc, Altria said in a release on Tuesday. The FTC filed a lawsuit in April 2020, saying Altria’s decision to buy a 35% stake in Juul, announced in December 2018, was bad for competition. The FTC said that the two companies were competitors in the market for closed-system e-cigarettes but that Altria opted to exit and invest in Juul.
Exclusive: Sen. Warren, others urge U.S. Justice Dept to oppose Sanderson chicken deal if antitrust violation found. Senator Elizabeth Warren, backed by some dozen other U.S. lawmakers, told the Justice Department that a plan to merge chicken producer Sanderson Farms with smaller rival Wayne Farms “raises significant antitrust concerns.” Commodities trader Cargill Inc and Continental Grain Co announced in August that they would buy Sanderson Farms, the third largest chicken producer, and combine it with Continental’s Wayne in a deal worth some $4.53 billion. Chicken prices have risen sharply in the previous year, and the Justice Department has been pursuing price-fixing in the sector but the market shares for the combined company isn’t as large as is usually seen in merger challenges.
Edited by Gary J. Malone