Federal Trade Commission Launches Inquiry Into Supply Chain Disruptions

The U.S. Federal Trade Commission has launched a new inquiry into supply chain disruptions contributing to empty shelves and sky-high prices for U.S. consumers.

As part of the inquiry, the FTC is ordering nine large retailers, wholesalers, and consumer goods suppliers to provide detailed information that to help shed light on issues and how disruptions are causing “serious and ongoing hardships for consumers and harming competition in the U.S. economy.”

The order has been sent to some of the country’s leading companies, including Walmart., Amazon.com., Kroger., C&S Wholesale Grocers, Associated Wholesale Grocers, McLane Co, Procter & Gamble, Tyson Foods., and Kraft Heinz. The companies will have 45 days from the date they received the order to respond.

Although maritime shipping was not specifically mentioned by the FTC, the order requires the companies to detail primary factors disrupting their ability “to obtain, transport and distribute their products; the impact these disruptions are having in terms of delayed and canceled orders, increased costs and prices; the products, suppliers and inputs most affected; and the steps the companies are taking to alleviate disruptions; and how they allocate products among their stores when they are in short supply.”

The study will seek to examine whether supply chain disruptions are leading to specific bottlenecks, shortages, anticompetitive practices, or contributing to rising consumer prices.

“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.”

As part of the inquiry, the FTC also is requiring the companies to provide internal documents regarding the supply chain disruptions, including strategies related to supply chains; pricing; marketing and promotions; costs, profit margins and sales volumes; selection of suppliers and brands; and market shares.

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