Kroger Seeks to Block FTC Merger Case in Federal Court

Kroger has taken legal action to block the Federal Trade Commission’s (FTC) internal proceedings against its planned $24.6 billion acquisition of Albertsons Cos., arguing that the process is unconstitutional. According to Bloomberg, thismove marks a significant development in what could become the largest supermarket merger in U.S. history.

Kroger filed a motion on Monday in a federal court in Ohio, seeking a preliminary injunction to stop the FTC’s administrative trial. The company contends that the case should be adjudicated in federal court rather than within the FTC’s own administrative law system, citing concerns over the separation of powers. Kroger referenced a recent Supreme Court decision in Securities and Exchange Commission v. Jarkesy, where the Court restricted the SEC’s ability to handle cases in-house, a precedent that could potentially extend to other regulatory bodies, including the FTC.

The FTC, supported by eight states and Washington, D.C., launched its challenge against the merger in February, arguing that it would lead to higher grocery prices for American consumers and reduce competition. The agency has maintained that the deal would not only harm consumers but also increase the merged company’s power over workers, potentially slowing wage growth, reported Bloomberg.

Related: Lawmakers Rally Against Kroger-Albertsons Merger

Kroger’s legal strategy is part of a broader defense against multiple challenges to the merger. In addition to the FTC’s case, the proposed acquisition faces legal opposition in a federal court in Oregon and from two state lawsuits in Colorado and Washington. Last year, a group of consumers also attempted to block the deal but were unsuccessful.

For now, the merger remains on hold pending the outcome of the antitrust lawsuit in Colorado. Kroger and Albertsons have defended their merger as a necessary move to remain competitive against larger retailers, such as Amazon.com Inc., arguing that the acquisition would enhance their ability to serve customers.

The outcome of Kroger’s latest legal maneuver could have far-reaching implications for the future of administrative law in the U.S., particularly in how regulatory agencies pursue cases against corporations.

Source: Bloomberg