UPDATE: Food & Power is now on Substack [[link removed]]! Current subscribers (like you!) don’t have to change anything to keep receiving Food & Power in your inbox. We’ll continue to send the newsletter to our direct subscribers as we usually do.
However, if you get other newsletters on Substack or prefer a more interactive platform, you can switch over. It’s the same newsletter and it’s still free. You can sign up for Food & Power on Substack here [[link removed]], then unsubscribe from this distribution list here [link removed] (unless you want to get two copies of the newsletter 😉 ).
U.S. District Court in Minneapolis overseeing U.S. v. AgriStats. Photo courtesy of iStock.
Trump’s Antitrust Enforcers Could Kill Unfinished Cases. Will They?
Antitrust litigation is a lengthy enterprise. A second Trump administration will take over several ongoing federal legal challenges to large mergers and domineering conduct by food and agriculture companies. New antitrust leaders can pull those cases, or more likely, let companies off the hook with a weak settlement. It’s too soon to tell if they will.
The Department of Justice (DOJ) and Federal Trade Commission (FTC) have three major active lawsuits against food and agriculture companies and could introduce at least one more before Trump takes office.
DOJ has sued [[link removed]] AgriStats, a data-sharing company, for allegedly helping meatpackers cut production and collude to raise prices [[link removed]]. This case could limit information exchange between competitors, which has been central to many recent price-fixing cases [[link removed]]. In the spring, federal enforcers survived a motion to dismiss and halt discovery, which means the government is in the thick of information gathering.
The Federal Trade Commission just went to trial [[link removed]]to block Kroger’s acquisition of rival grocer, Albertsons, a deal that would dramatically consolidate [[link removed]] the grocery industry. The FTC has also sued [[link removed]]pesticide makers, Corteva and Syngenta, for shutting out cheaper generics [[link removed]] by paying distributors handsome rebates in exchange for prioritizing their branded products. This case survived a motion to dismiss in January.
The FTC also has a large food industry case in the works. The commission is investigating alcohol distributor, Southern Glazer’s [[link removed]], and soda makers Pepsi and Coca-Cola [[link removed]] for violating the Robinson-Patman Act. Food makers and distributors often give their largest customers special discounts, which is prohibited by the Robinson-Patman Act, a law that has long gone unenforced. Biden’s FTC has talked [[link removed]] about reviving the Act, but has yet to bring a case.
Of these cases, the Kroger and Albertsons suit is the most likely to conclude before Trump takes office. The FTC sought a preliminary injunction to block the deal, which a federal judge could grant any day now. If granted, Kroger and Albertsons might abandon their merger. If not, the case continues in the FTC’s internal administrative court.
The future of these cases hinges on two key appointments by the Trump administration — FTC chair and Assistant Attorney General for DOJ’s antitrust division. Depending on the administration’s priorities, this could take weeks or several months. Until then, the FTC could maintain a Democratic majority. The commission currently has three Democrats and two Republicans and even though chair Lina Khan’s term has expired, she can serve until Trump appoints a replacement.
While most Republican institutions want to see less antitrust enforcement [[link removed]] and more corporate mergers [[link removed]], there is a burgeoning wing [[link removed]] of the party that is interested in more aggressive antitrust enforcement. The leaders of Trump’s antitrust transition efforts, Gail Slater [[link removed]] and Senator Mike Lee, reportedly have ties to both warring camps. This makes the fate of ongoing litigation “extraordinarily uncertain at this point,” says former DOJ antitrust attorney and emeritus law professor, Peter Carstensen.
New leadership can decide to reprioritize enforcement targets, bring fewer cases, or close unfinished investigations. For ongoing cases, a new administration could decide to deemphasize certain claims or legal theories in the way they litigate, without technically amending the lawsuit. Pioneering or new legal theories, such as a Robinson-Patman case, could be particularly vulnerable. Trump’s DOJ and FTC could also simply dismiss a case, but former federal enforcers say that’s less likely. The easiest way for new leadership to kill ongoing litigation with minimal public backlash is to reach a weak settlement with the companies.
“I think the remedy stage in a lot of these cases is where the new AAG or new chair of the FTC could really change the meaningfulness and the impact of the case without dismissing it or without softly downgrading any of the legal theories,” says law professor and former deputy director of the FTC’s competition bureau, John Newman. “It’s really easy to change the remedy ask to one that’s much, much narrower.”
For instance, the government nearly broke up Microsoft in the early 2000s, following an antitrust suit brought by the Clinton administration. However, the George W. Bush administration decided to settle [[link removed]] the case in exchange for moderate behavioral remedies.
There are some guardrails to prevent outrageously weak settlements. At the FTC, any dismissal or settlement requires a majority approval from the five commissioners. For all cases, the presiding judge needs to approve the settlement. If the government says the settlement addressed their concerns, most judges will approve the proposal, but a judge could force the parties to renegotiate if the settlement does not address a core issue from the initial complaint, according to Carstensen.
Additionally, several states attorneys general are joint plaintiffs on the suits against AgriStats, Corteva, and Kroger-Albertsons. The states will need to agree to any settlement, and if the federal government dismisses the case or accepts an overly generous deal, state attorneys general could decide to carry on the case themselves. This happened during the last Trump administration, when several state attorneys general appealed [[link removed]] an antitrust case against American Express up to the Supreme Court, an appeal the federal government did not join [[link removed]].
State antitrust enforcers have drastically fewer resources than the feds, so the likelihood that they take over a case alone depends on how far along it is. “It’s relatively cheap to pursue an appeal, it’s much more expensive to run a trial,” Newman says.
Find and share this story originally published on [[link removed]] Food & Power [[link removed]] . [[link removed]]
What We're Reading
President-elect Trump has named several nominees for cabinet positions. The list of rumored candidates for Secretary of Agriculture includes high profile farmer donors, past USDA officials, and members of Congress. ( Ag Web [[link removed]])
Voters rejected a ballot initiative to close the last slaughterhouse within Denver city limits. The plant, Superior Farms, processes roughly 20% of all lamb in the U.S. ( Investigate Midwest [[link removed]])
The California Air and Resources Board amended [[link removed]] its low carbon fuel standard and maintained highly favorable “ carbon negative [[link removed]]” ratings for biogas generated from animal waste, despite criticism from environmental justice organizations [[link removed]] that argue [[link removed]] biogas infrastructure on large dairy farms perpetuates [[link removed]] local air and water pollution. (Food & Water Watch)
Donate to Support Food & Power [[link removed]] About the Open Markets Institute
Our team of reporters, lawyers, and economists works to revive competition policy to build stronger democracies, more just and equitable societies, more innovative and sustainable economies, and a more secure and peaceful world.
Follow F&P on Twitter [[link removed]] | Subscribe [[link removed]] to this Newsletter | F&P Website [[link removed]] | Contact Us [[link removed]]
Tweet [link removed] Share [[link removed]] Forward [link removed]
Written by Claire Kelloway
Edited by Phil Longman and Anita Jain
Open Markets Institute
655 15th St NW Suite 310
Washington D.C., xxxxxx
Unsubscribe [link removed]
