As part of its whole-of-government effort to enforce the antitrust laws, the Biden administration recently launched a new interagency Strike Force on Unfair and Illegal Pricing (Strike Force), which will be co-chaired by the Federal Trade Commission (FTC) and the Department of Justice (DOJ), and will seek “to root out and stop illegal corporate behavior that hikes prices on American families through anti-competitive, unfair, deceptive, or fraudulent practices.” The White House intends the Strike Force to focus on “key sectors . . . including prescription drugs and health care, food and grocery, housing, [and] financial services,” with the goals of lowering costs and promoting competition. Jonathan Kanter, the DOJ’s Assistant Attorney General for the Antitrust Division, describes the Strike Force as “a new chapter in a fight against unfair and anticompetitive pricing.” [1]
A primary goal of the Strike Force will be to operationalize the administration’s revival of the Robinson-Patman Act (RPA), a 1936 statute prohibiting price discrimination that has fallen into disuse. The creation of the Strike Force comes on the heels of statements by FTC officials in September 2022 and March 2023 about reviving the Depression-era statute, and is consistent with reports of active RPA investigations in the pharmaceutical drug, alcoholic beverage, and grocery supply chain markets. FTC Chair Lina Khan recently stated that the Commission is determined to use the RPA in its fight against big businesses that have unfair advantages over small businesses. When the Strike Force launched, Kahn described it as part of the FTC’s broader campaign to crack down on anticompetitive, unlawful business practices that inflate costs for Americans.
The creation of this interagency Strike Force builds on other similar efforts to promote competition in the American economy. In 2019, the Antitrust Division spearheaded the creation of the Procurement Collusion Strike Force (PCSF) to combat government procurement fraud. Since its inception, the PCSF has opened more than 100 investigations, obtained over fifty guilty pleas and trial convictions, and collected approximately $65 million in fines and restitution. Initially a collaboration between the Antitrust Division and dozen or so federal law enforcement partners, the PCSF has broadened its gaze by collaborating with additional federal agencies and a variety of state and local enforcers. Similarly, the Biden administration is directing this new Strike Force to facilitate the sharing of information across agencies and to utilize each agency’s unique authorities for protecting consumers.
The creation of the Strike Force also is another concrete step to implement the sweeping Executive Order (EO) that President Biden issued in July 2021 to chart a whole-of-government approach to promote competition in the American economy. The EO, which established the White House Competition Council composed of ten Cabinet members and the heads of seven independent agencies, was intended to restore competition, lower prices, raise wages, and increase innovation and productivity in the economy. To date, the Council has made slow but steady progress. Although the White House’s announcement of the new Strike Force was accompanied by a report on some of the more recent accomplishments of the Council—including the updated merger guidelines finalized by the FTC and the DOJ, the FTC’s rule banning auto dealers from charging “junk fees,” and the FTC’s investigation into anticompetitive behavior by group purchasing organizations and drug wholesalers—it was clear that the Strike Force was the centerpiece. That said, the Council’s report also highlighted some planned interagency efforts, such as finalizing the FTC’s proposed rule to ban companies from charging “hidden and misleading” fees across industries, which suggests there may be more to come.
But, at the same time the White House was announcing its efforts to bolster antitrust enforcement, Congress unveiled a plan to cut drastically the DOJ Antitrust Division’s budget. Specifically, appropriators are currently planning to allocate only $233 million to the Division, which cuts $45 million and contradicts last year’s budget, which included funding increases for the Division and the FTC. Although the Biden administration countered with proposed budget increases for both agencies, a stagnate or reduced budget may put a damper on the Strike Force before it starts.
The Biden administration’s announcement of the Strike Force is significant because it creates a concrete, interagency effort to target the pricing practices of specific industries, including the health care, food and grocery, housing, and financial services industries. In light of this increased focus, businesses would be well served to assess their exposure to possible enforcement actions and take steps to ensure their pricing practices do not create heightened risks. Companies considering new pricing policies, programs, or strategies that collaborate with other entities, or that differentiate among customers, should view this as a prime opportunity to assess the risks and potential mitigation strategies.
[1] Chris May, White House Unveils Interagency Strike Force Targeting Unfair, Illegal Pricing, Mlex (Mar. 5, 2024).
[View source.]
