Matt Stoller says the Federal Trade Commission chair is saving us from the predations of Big Tech. Judge Glock says the agency has become ‘ridiculous.’ Who’s right?
To Matt Stoller: Go actually shop at a number of Kroger stores and then re-write your piece so that it reflects reality. You will find that the Kroger stores are a bit run down and not too busy. Kroger and Albertsons are the second- and fourth-largest grocery sellers with 8.9% and 5.5% of U.S. grocery market share, respectively. So, what does that tell you? Even combined, they represent only about 15% of the market. Newsflash for Kahn and Stoller: It is laughable that the FTC thinks that a combined company that has 15% of a market is on its way to a monopoly. That is exactly backwards.
Kroger and Albertsons are fighting for their lives. Against whom, and why did things turn south? Things started to go badly for these two businesses when the democrats managed to get inflation roaring. People started to look for lower grocery prices, and they found them at Walmart. Note to Kahn: Maybe you should include Walmart in your analysis of grocery mergers since Walmart has over 25% of the market, and its share is growing.
Next up, why should Kroger and Albertsons want to merge? They didn't want to, the needed to! How does Walmart have lower prices? Walmart negotiates lower costs because they have more volume. That is a standard in every industry. More volume gives a business leverage to demand discounts. The merger was needed to give the combined company a shot at competing with the 500 lb. gorilla Walmart. And Kahn shot it down. Now what for Kroger and Albertsons? Eventual bankruptcy? Massive contraction to only support the upper middle class with a few stores in suburbia? Brilliant!! Thanks Lisa Kahn! Maybe we should name a food desert after her.
But wait, didn't Kamala tell us that the real reason that grocery prices were up so much was because of price gouging by such companies? Well, Kroger makes less than 2 pennies per dollar of goods sold. That is a very lean and mean company, hardly one that is gouging the customers and living high on the hog. And BTW Matt and Lisa, if Kroger were actually gouging the consumers could just drive a few blocks away and hit the Walmart. Yes, competition works quite well. And this merger that got blocked did not increase true competition, instead it will ultimately hand more market share to Walmart and further drive Kroger and Albertsons loss of market share.
But I know that some of you think that the Federal Govt should just run everything. Profit is evil, only enjoyed by the rich. Well, your old friend Obama thought that too regarding student loans. In 2010, he had the Federal Govt take over student loan administration so that the Federal Govt could use the billions in profits to fund his ACA. Well, how did that work out? The Federal Govt managed to take those billions in profits and turn it into billions in losses. It got so bad that Biden decided that if they were going to lose a lot of money anyway on the program, they might as well just fire up a phony student loan forgiveness vote buying plan and lose a lot more.
Bottom line is that the grocery business was performing quite well. Normal competition was going on daily. Supply is great, selection is great, and prices simply reflect the cost of doing business in the inflated economy that exists. Kahn did no one any favors with her actions against Kroger, but instead she may have hammered a few nails into its coffin.
This is just a guess, but I think their plan is to corner certain local grocery store markets and increase the prices because they'll never get them low enough to compete with Amazon or Walmart. Not every city, town, or neighborhood has a Walmart, and many people still prefer to shop in person (for now).
In the case where there is no Walmart close by, then yes, a merger could result in a local "monopoly" and possible price increases. But such locations are rare, and Walmart would surely open a store there since the location is ripe for competition.
Also realize that the locations you mention where there is no Walmart probably already have higher prices since the low-cost leader is not present to compete with them.
Your guess is essentially what I meant by these grocers shifting to only upper middle-class locations where people are willing to pay more for a nicer shopping experience. But of course, that means closing many locations and many lost jobs to go along with food deserts. And, at least where I live, that was already in place before Walmart showed up. The upscale grocers all faded away mainly due to increased competition but also due to niche grocers like Trader Joes, Fresh Market, etc.
Most of these comments are terrible. Americans seem to have forgotten that anytime the government meddles in business enterprises and markets, you don't have free enterprise and free markets. We are so deluded about our government employees knowing better than market forces that we no longer believe in capitalism and free markets. Disband the FTC; it is unAmerican.
That is a predictable consequence when the democrats run around daily blaming the rich and the corporations for deficits and inflation. How absurd is that? The Federal Govt makes the tax laws and prints trillions of dollar bills to finance wasteful pork projects and then blames others for the consequences of those actions.
Anything that breaks up mergers for any reason is good for capitalism.
Any reason to bust massive companies that did not grow organically is good for capitalism.
Anything that keeps the power of corporations at bay is good for capitalism.
Anything that forces corporate boards to work on themselves to improve their product and service rather than poach from workers is good for capitalism.
Anything forces the transactional relationship between consumer and producer closer is good for capitalism.
Anything that forces more people to be involved in more businesses through multiple means, i.e. a boss and owner that are visible acessible and accountable to the consumer and worker instead ceo, coo, cfo,(more like gfy) that is never seen outside of PR stunts is good for capitalism.
Why am writing all this when I could sum it all up with read your kids 11th US History text book.
Oh wait....
For more pithy, witty and poorly delivered ideas head over to @anincompletethought on substack.
I'm not sure I understand your comment, sir. Is breaking monopoly power communist? Or did you view my comment as not liking capitalism? Communism is centralized power and commerce, benefiting a ruling class, and exploits anyone not cheering for the party by funding the party. Can you explain?
"Anything that forces corporate boards to work on themselves to improve their product and service rather than poach from workers is good for capitalism."
Poach from workers? Right out of the Communist Manifesto.
This one is unrelated to Communism, but is just wrong:
"Anything forces the transactional relationship between consumer and producer closer is good for capitalism."
The sentiment is fine, i.e. that cutting out middlemen is a good thing. Unless those middlemen facilitate businesses. Check out how a distributor works. They hold stock in a producer's goods, and distribute them quickly, as needed, to manufacturers enabling those manufacturers to reduce inventory and waste while still providing quick production cycles. Inventory risk is held by the distributor, not the actual producer, and that is most definitely good for the producer.
Thank you. I'll be a little more clear about my delivey next time.
What I meant by poaching from workers is more along the lines of what causeS wages to stagnate during an inflation or otherwise without commodity cost increase or commodity production decrease.
When wages don't increase relative to supply, demand, and job availability, more often my experience has been that large cocorporate buisness is exploiting the workforce. I mean this in a capitalist since. Moreover, pay me what I'm worth or I leave. The down side to corporations having huge leverage advantages over the employees is forces them to unionize and strike, then we all suffer.
When it comes to low skill service jobs, what twenty years ago I would have called an entry level or high school job, but now--because of monopolistic corporations outsourcing amongst other thing-- these former low wage jobs are now excpeted support families, that was never their purpose.
This in turn can cause more dependency on the nanny state, ssi, etc as an incentive to not work. Also, look at the minimum wage hikes in places like NY...15 dollars an hour for a Mc job? That is a direct result of corporations sending skilled jobs overseas, so playing a skilled workforce for production of goods is a thing of the past.
But this is a comment section, not really a space for me to elaborate. But you are right about my diction choices. And my delivery.
Thank you for explaining. It helps me as I am trying to write a bit more myself. And, I am certainly not advocating for Marxism, socialism, communism or their ilk.
I'm certainly not a fan of everything that Lina Khan has done. But I do agree that market consolidation can be a problem. Instead of competing companies are just buying each other.
I agree that the Microsoft purchase of Activision should have been banned.
Stopping companies from electronically monitoring their employees every second probably makes some sense as well.
Just because we have the technology to make the perfect surveillance state doesn't mean we should
This was interesting, but I'd like to see a follow-up where each of the authors addressed the other's points, since they basically talked about completely different topics.
The peanut-butter approach of the FTC is not working nor will it. If we are "Globalists" then you need critical mass to compete on a global stage. When you tie the hands of economics, with virtuous attitudes, then you get.... reduced competitiveness. In the cases that were mentioned, the FTC can and should step in to ensure that competition is clear and that prices are market driven, but not coercive. Broad-Brushed "Gouging" and "Fair Share" are code-words for marxism.
And the democrats run around selling this Marxism even when completely at odds with the facts. According to the democrats, the rich don't pay their "fair share" in taxes, implying that everyone's tax burden is too high because of the rich. But then you go look at who is actually paying federal income taxes and you find that in 2020, 60% of US households didn't pay any federal income taxes at all.
Is this the same FCC that approved fast track of George Soros' purchase of 200 radio stations last week against the vote of the Republican commissioner? Just checking. Nothing to see there.
Khan reminds me of an old Soviet commissar or worse. I'm convinced she is a true believer that authoritarian interventionism delivers better results than allowing free markets to work if we could only "do it right this time". In the twentieth century there were a number of regimes who shared her faith. Think Berlin, Rome, Moscow and Beijing. If I were her, I wouldn't want to be mentioned in the same breath with them, because the results of their 'planned economies' and government interventionism speaks for itself.
These FP debates need to be four entries, not two. They each need to respond to each other, at least once, if not twice. Reason Magazine debates work much better for this reason.
I understand that many people say they hate big corporations but they didn't get big without providing goods or services that people were willing to pay for. I'm more concerned with the power of government agencies like the FTC, which enforces our vague antitrust laws. Lina Khan may have brought some valid cases but she's also caused a lot of businesses to spend large sums fighting the FTC for their right to do business the way they want. We have a choice to patronize a company or not, but government is force we can't avoid.
It seems like each author cherry picked. Every one of us has home runs and also blunders. I don't think any person can be right 100% of the time, or wrong 100%. So, I understand now some of her home runs, and some of her blunders. But that doesn't give me an over all perspective of how effective she is in her role. I wish instead their had been a dialog.
"That’s because pharmaceutical companies use bogus patents in a complex regulatory scheme ..." There's your answer, dufus. These "complex regulatory schemes" are a function of the government.
The democrats run around castigating the rich, the corporations, etc. as being unfair and deceptive when they are only following the rules set by the Federal Govt. Well, didn't the democrats have full control of the federal govt in 2021? Why didn't they fix everything then?
Lina appears to suffer from the malady that afflicts other Biden admin appointees: visions of authoritarian grandeur. Like many progressives, she is undoubtedly convinced that the antidote for the evils of corporate America is more government, thoughtfully provided by her superior vision for reducing "inequity" and protecting "the great unwashed" who so desperately need ever more caretaking.
How dare the bouncer do his job and not let me in the bar unless I have an ID. He's an authoritarian - also, that automatically somehow makes him a conservative. He thinks this bar would be better with a few basic rules! Malarkey I say!
This article was interesting but suffers from the fact each writer cherry picked instances where the scenario helped their case. So there was no overlap in what they were talking about. It read like there were 2 different FTCs making rulings on 2 different sets of cases.
How about agreeing to a common list of cases, and debate how Khan’s behaviour was helpful or harmful to the consumer in each case. Then it’s at least an apples to apples discussion.
To Matt Stoller: Go actually shop at a number of Kroger stores and then re-write your piece so that it reflects reality. You will find that the Kroger stores are a bit run down and not too busy. Kroger and Albertsons are the second- and fourth-largest grocery sellers with 8.9% and 5.5% of U.S. grocery market share, respectively. So, what does that tell you? Even combined, they represent only about 15% of the market. Newsflash for Kahn and Stoller: It is laughable that the FTC thinks that a combined company that has 15% of a market is on its way to a monopoly. That is exactly backwards.
Kroger and Albertsons are fighting for their lives. Against whom, and why did things turn south? Things started to go badly for these two businesses when the democrats managed to get inflation roaring. People started to look for lower grocery prices, and they found them at Walmart. Note to Kahn: Maybe you should include Walmart in your analysis of grocery mergers since Walmart has over 25% of the market, and its share is growing.
Next up, why should Kroger and Albertsons want to merge? They didn't want to, the needed to! How does Walmart have lower prices? Walmart negotiates lower costs because they have more volume. That is a standard in every industry. More volume gives a business leverage to demand discounts. The merger was needed to give the combined company a shot at competing with the 500 lb. gorilla Walmart. And Kahn shot it down. Now what for Kroger and Albertsons? Eventual bankruptcy? Massive contraction to only support the upper middle class with a few stores in suburbia? Brilliant!! Thanks Lisa Kahn! Maybe we should name a food desert after her.
But wait, didn't Kamala tell us that the real reason that grocery prices were up so much was because of price gouging by such companies? Well, Kroger makes less than 2 pennies per dollar of goods sold. That is a very lean and mean company, hardly one that is gouging the customers and living high on the hog. And BTW Matt and Lisa, if Kroger were actually gouging the consumers could just drive a few blocks away and hit the Walmart. Yes, competition works quite well. And this merger that got blocked did not increase true competition, instead it will ultimately hand more market share to Walmart and further drive Kroger and Albertsons loss of market share.
But I know that some of you think that the Federal Govt should just run everything. Profit is evil, only enjoyed by the rich. Well, your old friend Obama thought that too regarding student loans. In 2010, he had the Federal Govt take over student loan administration so that the Federal Govt could use the billions in profits to fund his ACA. Well, how did that work out? The Federal Govt managed to take those billions in profits and turn it into billions in losses. It got so bad that Biden decided that if they were going to lose a lot of money anyway on the program, they might as well just fire up a phony student loan forgiveness vote buying plan and lose a lot more.
Bottom line is that the grocery business was performing quite well. Normal competition was going on daily. Supply is great, selection is great, and prices simply reflect the cost of doing business in the inflated economy that exists. Kahn did no one any favors with her actions against Kroger, but instead she may have hammered a few nails into its coffin.
The court case has revealed text messages between the grocery store executives saying that the merger will likely increase prices. https://www.idahostatesman.com/news/business/article293264019.html
This is just a guess, but I think their plan is to corner certain local grocery store markets and increase the prices because they'll never get them low enough to compete with Amazon or Walmart. Not every city, town, or neighborhood has a Walmart, and many people still prefer to shop in person (for now).
In the case where there is no Walmart close by, then yes, a merger could result in a local "monopoly" and possible price increases. But such locations are rare, and Walmart would surely open a store there since the location is ripe for competition.
Also realize that the locations you mention where there is no Walmart probably already have higher prices since the low-cost leader is not present to compete with them.
Your guess is essentially what I meant by these grocers shifting to only upper middle-class locations where people are willing to pay more for a nicer shopping experience. But of course, that means closing many locations and many lost jobs to go along with food deserts. And, at least where I live, that was already in place before Walmart showed up. The upscale grocers all faded away mainly due to increased competition but also due to niche grocers like Trader Joes, Fresh Market, etc.
There should be no such thing as “competition policy”.
Most of these comments are terrible. Americans seem to have forgotten that anytime the government meddles in business enterprises and markets, you don't have free enterprise and free markets. We are so deluded about our government employees knowing better than market forces that we no longer believe in capitalism and free markets. Disband the FTC; it is unAmerican.
Disband government. Most government employees are lazy and don't know better than anyone.
That is a predictable consequence when the democrats run around daily blaming the rich and the corporations for deficits and inflation. How absurd is that? The Federal Govt makes the tax laws and prints trillions of dollar bills to finance wasteful pork projects and then blames others for the consequences of those actions.
Anything that breaks up mergers for any reason is good for capitalism.
Any reason to bust massive companies that did not grow organically is good for capitalism.
Anything that keeps the power of corporations at bay is good for capitalism.
Anything that forces corporate boards to work on themselves to improve their product and service rather than poach from workers is good for capitalism.
Anything forces the transactional relationship between consumer and producer closer is good for capitalism.
Anything that forces more people to be involved in more businesses through multiple means, i.e. a boss and owner that are visible acessible and accountable to the consumer and worker instead ceo, coo, cfo,(more like gfy) that is never seen outside of PR stunts is good for capitalism.
Why am writing all this when I could sum it all up with read your kids 11th US History text book.
Oh wait....
For more pithy, witty and poorly delivered ideas head over to @anincompletethought on substack.
Well stated Comrade! Maybe instead of reading some distorted version of US History you should read up on the Soviet Union.
I'm not sure I understand your comment, sir. Is breaking monopoly power communist? Or did you view my comment as not liking capitalism? Communism is centralized power and commerce, benefiting a ruling class, and exploits anyone not cheering for the party by funding the party. Can you explain?
"Anything that forces corporate boards to work on themselves to improve their product and service rather than poach from workers is good for capitalism."
Poach from workers? Right out of the Communist Manifesto.
This one is unrelated to Communism, but is just wrong:
"Anything forces the transactional relationship between consumer and producer closer is good for capitalism."
The sentiment is fine, i.e. that cutting out middlemen is a good thing. Unless those middlemen facilitate businesses. Check out how a distributor works. They hold stock in a producer's goods, and distribute them quickly, as needed, to manufacturers enabling those manufacturers to reduce inventory and waste while still providing quick production cycles. Inventory risk is held by the distributor, not the actual producer, and that is most definitely good for the producer.
Thank you. I'll be a little more clear about my delivey next time.
What I meant by poaching from workers is more along the lines of what causeS wages to stagnate during an inflation or otherwise without commodity cost increase or commodity production decrease.
When wages don't increase relative to supply, demand, and job availability, more often my experience has been that large cocorporate buisness is exploiting the workforce. I mean this in a capitalist since. Moreover, pay me what I'm worth or I leave. The down side to corporations having huge leverage advantages over the employees is forces them to unionize and strike, then we all suffer.
When it comes to low skill service jobs, what twenty years ago I would have called an entry level or high school job, but now--because of monopolistic corporations outsourcing amongst other thing-- these former low wage jobs are now excpeted support families, that was never their purpose.
This in turn can cause more dependency on the nanny state, ssi, etc as an incentive to not work. Also, look at the minimum wage hikes in places like NY...15 dollars an hour for a Mc job? That is a direct result of corporations sending skilled jobs overseas, so playing a skilled workforce for production of goods is a thing of the past.
But this is a comment section, not really a space for me to elaborate. But you are right about my diction choices. And my delivery.
Thank you for explaining. It helps me as I am trying to write a bit more myself. And, I am certainly not advocating for Marxism, socialism, communism or their ilk.
I'm certainly not a fan of everything that Lina Khan has done. But I do agree that market consolidation can be a problem. Instead of competing companies are just buying each other.
I agree that the Microsoft purchase of Activision should have been banned.
Stopping companies from electronically monitoring their employees every second probably makes some sense as well.
Just because we have the technology to make the perfect surveillance state doesn't mean we should
Does an in office employee not get monitored on their work?
This was interesting, but I'd like to see a follow-up where each of the authors addressed the other's points, since they basically talked about completely different topics.
The peanut-butter approach of the FTC is not working nor will it. If we are "Globalists" then you need critical mass to compete on a global stage. When you tie the hands of economics, with virtuous attitudes, then you get.... reduced competitiveness. In the cases that were mentioned, the FTC can and should step in to ensure that competition is clear and that prices are market driven, but not coercive. Broad-Brushed "Gouging" and "Fair Share" are code-words for marxism.
100%
And the democrats run around selling this Marxism even when completely at odds with the facts. According to the democrats, the rich don't pay their "fair share" in taxes, implying that everyone's tax burden is too high because of the rich. But then you go look at who is actually paying federal income taxes and you find that in 2020, 60% of US households didn't pay any federal income taxes at all.
Is this the same FCC that approved fast track of George Soros' purchase of 200 radio stations last week against the vote of the Republican commissioner? Just checking. Nothing to see there.
Khan reminds me of an old Soviet commissar or worse. I'm convinced she is a true believer that authoritarian interventionism delivers better results than allowing free markets to work if we could only "do it right this time". In the twentieth century there were a number of regimes who shared her faith. Think Berlin, Rome, Moscow and Beijing. If I were her, I wouldn't want to be mentioned in the same breath with them, because the results of their 'planned economies' and government interventionism speaks for itself.
These FP debates need to be four entries, not two. They each need to respond to each other, at least once, if not twice. Reason Magazine debates work much better for this reason.
I understand that many people say they hate big corporations but they didn't get big without providing goods or services that people were willing to pay for. I'm more concerned with the power of government agencies like the FTC, which enforces our vague antitrust laws. Lina Khan may have brought some valid cases but she's also caused a lot of businesses to spend large sums fighting the FTC for their right to do business the way they want. We have a choice to patronize a company or not, but government is force we can't avoid.
It seems like each author cherry picked. Every one of us has home runs and also blunders. I don't think any person can be right 100% of the time, or wrong 100%. So, I understand now some of her home runs, and some of her blunders. But that doesn't give me an over all perspective of how effective she is in her role. I wish instead their had been a dialog.
"That’s because pharmaceutical companies use bogus patents in a complex regulatory scheme ..." There's your answer, dufus. These "complex regulatory schemes" are a function of the government.
Bingo!!!
The democrats run around castigating the rich, the corporations, etc. as being unfair and deceptive when they are only following the rules set by the Federal Govt. Well, didn't the democrats have full control of the federal govt in 2021? Why didn't they fix everything then?
Answer: Because they are phony issues!
"Judge Glock". Seriously?
That name definitely deserves a Charles Bronson movie.
Lina appears to suffer from the malady that afflicts other Biden admin appointees: visions of authoritarian grandeur. Like many progressives, she is undoubtedly convinced that the antidote for the evils of corporate America is more government, thoughtfully provided by her superior vision for reducing "inequity" and protecting "the great unwashed" who so desperately need ever more caretaking.
How dare the bouncer do his job and not let me in the bar unless I have an ID. He's an authoritarian - also, that automatically somehow makes him a conservative. He thinks this bar would be better with a few basic rules! Malarkey I say!
This article was interesting but suffers from the fact each writer cherry picked instances where the scenario helped their case. So there was no overlap in what they were talking about. It read like there were 2 different FTCs making rulings on 2 different sets of cases.
How about agreeing to a common list of cases, and debate how Khan’s behaviour was helpful or harmful to the consumer in each case. Then it’s at least an apples to apples discussion.