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How the FTC Plans to Tackle ‘Gatekeeper Markets’

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Photo credit: ILSR

A 2016 research study from Pew Research found that 65% of Americans felt the U.S. economic system “unfairly favors powerful interests.” A few years later, key events during the COVID pandemic — including product shortages, high inflation and the closure of countless small businesses — have only heightened consumers’ awareness of the current corporate power dynamics.

At the heart of the fight to bring monopolies back to the forefront of public consciousness is Lina Khan, the often controversial chair of the Federal Trade Commission (FTC) — and retail is at the center of this intensifying battle.

“There’s a robust tradition of antitrust and anti-monopoly [efforts in America],” said Khan on a recent webinar co-hosted by the Institute for Local Self-Reliance (ILSR) and Small Business Rising. “While in the 1912 presidential election the question of monopoly was the major issue of the day, in recent decades we have instead seen anti-monopoly and antitrust recede from public consciousness and become much more technocratic. Under this administration we’re departing from that.

“For a long time there was a sense that economic outcomes are the result of inevitable forces, [but now] there’s instead been growing recognition that, in fact, there are policy choices and legal choices that we’re making that determine whether you have a single monopoly that’s dictating outcomes to consumers and small businesses, or whether you have open, fair, competitive markets that actually create opportunity,” Khan added. “Connecting the dots between problems in the world and our policy choices — be it high grocery prices or independent pharmacies being run out of the market — has been key. We have an enormously busy portfolio underway and a key through line is making sure that our economy and our markets are serving everybody. That means consumers, but it also means independent business.”

In a recent deep-dive report for Retail TouchPoints, Ecommerce Editor Nicole Silberstein outlined key takeaways from the conversation, as well as Khan’s top priorities for her role.

Priority 1: Crack Down on ‘Gatekeepers’

Sure, railroad monopolies are no longer the targets like they were when antitrust law was first developed in the 1800s, but Khan believes the protections should be the same. Specifically, Khan is focusing on “gatekeepers” like Amazon, who are playing middleman in commerce scenarios: “To ensure that our commercial sphere and our economic sphere enjoys the same types of checks and balances against concentrated power that our constitution provides in our political sphere,” she explained on the webinar. “Because lawmakers recognize that open, fair competition is what best serves the public — it serves consumers, it serves workers and it also creates opportunities for new, independent businesses, to make sure that the best ideas can win and really rise to the top.”

Priority 2: Stop ‘Power Consolidations’

Khan and the FTC are trying to stop “gatekeeper markets” from existing altogether by focusing on mergers and acquisitions that eliminate friendly (and necessary) competition. Last month, the FTC sued to block Kroger’s proposed acquisition of Albertsons, claiming that it would “eliminate competition and raise grocery prices for millions of Americans.” Although the companies claim the contrary.

Khan said the decision to take action in the Kroger-Albertsons merger was prompted in part by “hearing directly from businesses, including independent businesses, about how prior mergers have actually worked out.” These listening sessions haven’t been focused solely to the grocery or even the retail sector. Khan and her team also seek input on the impact of consolidation in a range of other markets, from healthcare to the music industry.

Click here to read the deep-dive report.

How the FTC Plans to Tackle ‘Gatekeeper Markets’

by | Mar 20, 2024

Lina-only-960×540

A 2016 research study from Pew Research found that 65% of Americans felt the U.S. economic system “unfairly favors powerful interests.” A few years later, key events during the COVID pandemic — including product shortages, high inflation and the closure of countless small businesses — have only heightened consumers’ awareness of the current corporate power dynamics.

At the heart of the fight to bring monopolies back to the forefront of public consciousness is Lina Khan, the often controversial chair of the Federal Trade Commission (FTC) — and retail is at the center of this intensifying battle.

“There’s a robust tradition of antitrust and anti-monopoly [efforts in America],” said Khan on a recent webinar co-hosted by the Institute for Local Self-Reliance (ILSR) and Small Business Rising. “While in the 1912 presidential election the question of monopoly was the major issue of the day, in recent decades we have instead seen anti-monopoly and antitrust recede from public consciousness and become much more technocratic. Under this administration we’re departing from that.

“For a long time there was a sense that economic outcomes are the result of inevitable forces, [but now] there’s instead been growing recognition that, in fact, there are policy choices and legal choices that we’re making that determine whether you have a single monopoly that’s dictating outcomes to consumers and small businesses, or whether you have open, fair, competitive markets that actually create opportunity,” Khan added. “Connecting the dots between problems in the world and our policy choices — be it high grocery prices or independent pharmacies being run out of the market — has been key. We have an enormously busy portfolio underway and a key through line is making sure that our economy and our markets are serving everybody. That means consumers, but it also means independent business.”

In a recent deep-dive report for Retail TouchPoints, Ecommerce Editor Nicole Silberstein outlined key takeaways from the conversation, as well as Khan’s top priorities for her role.

Priority 1: Crack Down on ‘Gatekeepers’

Sure, railroad monopolies are no longer the targets like they were when antitrust law was first developed in the 1800s, but Khan believes the protections should be the same. Specifically, Khan is focusing on “gatekeepers” like Amazon, who are playing middleman in commerce scenarios: “To ensure that our commercial sphere and our economic sphere enjoys the same types of checks and balances against concentrated power that our constitution provides in our political sphere,” she explained on the webinar. “Because lawmakers recognize that open, fair competition is what best serves the public — it serves consumers, it serves workers and it also creates opportunities for new, independent businesses, to make sure that the best ideas can win and really rise to the top.”

Priority 2: Stop ‘Power Consolidations’

Khan and the FTC are trying to stop “gatekeeper markets” from existing altogether by focusing on mergers and acquisitions that eliminate friendly (and necessary) competition. Last month, the FTC sued to block Kroger’s proposed acquisition of Albertsons, claiming that it would “eliminate competition and raise grocery prices for millions of Americans.” Although the companies claim the contrary.

Khan said the decision to take action in the Kroger-Albertsons merger was prompted in part by “hearing directly from businesses, including independent businesses, about how prior mergers have actually worked out.” These listening sessions haven’t been focused solely to the grocery or even the retail sector. Khan and her team also seek input on the impact of consolidation in a range of other markets, from healthcare to the music industry.

Click here to read the deep-dive report.