The Federal Trade Commission is ordering nine large retailers, wholesalers, and consumer good suppliers to provide detailed information that will help the FTC shed light on the causes behind ongoing supply chain disruptions and how these disruptions are causing serious and persistent hardships for consumers and harming competition in the U.S. economy.
The FTC is issuing the orders under Section 6(b) of the FTC Act, which authorizes the Commission to conduct wide-ranging studies that do not have a specific law enforcement purpose, according to a press release.
The orders are being sent to Walmart Inc., Amazon.com, Inc., Kroger Co., C&S Wholesale Grocers, Inc., Associated Wholesale Grocers, Inc., McLane Co, Inc. Procter & Gamble Co., Tyson Foods, Inc., and Kraft Heinz Co. The companies will have 45 days from the date they received the order to respond.
“Supply chain disruptions are upending the provision and delivery of a wide array of goods, ranging from computer chips and medicines to meat and lumber. I am hopeful the FTC’s new 6(b) study will shed light on market conditions and business practices that may have worsened these disruptions or led to asymmetric effects,” said Chair Lina M. Khan. “The FTC has a long history of pursuing market studies to deepen our understanding of economic conditions and business conduct, and we should continue to make nimble and timely use of these information-gathering tools and authorities.”
In addition to better understanding the reasons behind the disruptions, the FTC said the study would examine whether supply chain disruptions lead to specific bottlenecks, shortages, anticompetitive practices, or rising consumer prices.
The orders require the companies to detail the significant factors disrupting their ability to source, transport, and distribute their products and the impact these disruptions have in terms of order delays and cancellations, increased costs, and prices.
The Commission also wants to know which products, suppliers, and inputs are most affected, the measures companies take to alleviate disruptions, and how they allocate products among their stores when shortages occur.
The FTC also requires the companies to provide internal documents regarding the supply chain disruptions, including strategies related to supply chains, pricing, marketing, and promotions; costs, profit margins, sales volumes; selection of suppliers and brands; and market shares.
The agency is also soliciting voluntary comments from retailers, consumer goods suppliers, wholesalers, and consumers on their views about how supply chain problems are affecting competition in consumer goods markets. These comments provide an opportunity for market participants to provide additional issues and examples of how supply chain disruptions are affecting competition.
The Commission vote to approve issuing the Special Orders was 4-0.