The US Federal Trade Commission (FTC) has challenged the $24.6 billion acquisition of Albertsons Cos. by Kroger Co., arguing it would decrease competition among unionized grocery workers. This novel antitrust approach to labour markets advocates for competition law as a tool to regulate labour.
This is an unprecedented use of competition law, according to John Newman, a law professor at the University of Miami and former FTC Bureau of Competition official. Newman stated, “This is not the first time any federal agency has challenged a deal based on effects on workers. But this is absolutely the first time any federal agency has challenged a deal based on a theory of harm in a unionized labor market, specifically.”
According to the Bloomberg Law report, if the FTC successfully blocks the deal on these grounds, it could motivate more worker-focused antitrust complaints and buttress the intertwined goals of antitrust and labour law in safeguarding competition and collective bargaining power.
A key element of the FTC’s argument is the effect the merger could have on weakening union leverage. The FTC alleges in its complaint, “By eliminating the current competition for union grocery labor between Kroger and Albertsons, the proposed acquisition would prevent the unions from being able to play them off each other during collective bargaining negotiations, substantially increasing Kroger’s negotiating leverage.”
In addition, the FTC, eight states, and Washington D.C. argued in a lawsuit filed on February 26 that the merger would result in lower wages for workers and higher food prices. Further suits seeking to block the deal have been filed in Colorado and Washington state.
Reacting to the FTC’s approach, Kroger claimed that the deal is “inherently pro-union,” asserting that blocking it would only benefit larger, non-union retailers that oppose union growth. They propose that their merger is a strategy intended to better rival competitors like Amazon.com Inc. and Walmart Inc.
The focus on unionized labor and the potential implications for collective bargaining represent a novel development in antitrust arguments. The FTC views unionized workers as a distinct subset of the workforce and believes the deal could negatively impact competition within this market.
By making this argument, the FTC is integrating labor law into antitrust law, thus reinforcing the interconnectedness of these areas of law. The case has been labeled Federal Trade Commission v. Kroger Co. in a significant reflection of the impact this ruling may have on future antitrust decisions impacting labour markets.