The Federal Trade Commission (FTC) is suing to block Kroger Company (KR)'s $24.6 billion acquisition of supermarket chain Albertsons Companies (ACI). FTC regulators have argued that the deal would cause price hikes at grocery stores, an issue many consumers already face, but both companies believe that blocking the deal would hurt consumers and workers. It is argued that this will cause harm to the person.
Former FTC Chairman William Kovačić and former FTC Commissioner Mozelle Thompson join Yahoo Finance Live to discuss the broader impact the FTC's decision could have on U.S. consumers.
Regarding how the FTC builds its case, Kovačić said, “I think the traditional standards that the FTC uses produce strong evidence on the question of whether there will be further market concentration. Companies will Recognizing this, and again, the real question is, can they come up with a solution that's good enough? Here are the key arguments the FTC is making: This contract is not only bad for consumers, it's also bad for the employees of both companies.”
Thompson followed up on how companies would react and what would happen as a result, saying, “They've made significant concessions here. The question is whether those concessions will be deemed appropriate. In addition, the FTC notes that the new merger guidelines include labor market impacts that look at competition a little more broadly than before, as Bill mentioned.To what extent will courts consider that? And I don't know if I'll adopt it or not. It's new territory.”
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Editor's note: This article was written by Nicholas Jacobino
