Khan’s latest assault on business is reviving a 1936 antitrust theory. 
The Wall Street Journal and I bid An Unfond Farewell to Lina Khan
The FTC lawsuit filed Thursday against Southern Glazer’s Wine and Spirits is a classic Khan job. She has resurrected the dormant 1936 Robinson-Patman Act to sue the nation’s largest liquor distributor for alleged illegal price discrimination. The FTC hasn’t litigated a claim under this law for more than 30 years.
Robinson-Patman says suppliers cannot “discriminate in price between different purchasers of commodities of like grade and quality.” The FTC alleges that Southern Glazer’s squeezed mom-and-pop businesses by selling them booze at higher prices than to larger chains, which it claims resulted in fewer choices and higher prices.
The FTC offers no evidence for the latter, and volume discounts are ubiquitous in retail. Most retailers charge customers lower marginal prices on products bought in bulk. This reduces prices. There’s also no evidence mom-and-pop shops have been harmed by these volume discounts. Liquor and convenience stores have added roughly 24,000 jobs in the last five years.
GOP Commissioner Melissa Holyoak distills the history of the Robinson-Patman Act in a biting 88-page dissent. Antitrust regulators mostly stopped enforcing the law after a 1977 Justice Department report documented how it resulted in higher prices and price-fixing among competitors, while inhibiting small retail cooperatives from negotiating discounts with suppliers.
Meanwhile, the FTC is touting its victory this week blocking Kroger’s $24.6 billion supermarket tie-up with Albertsons. Judge Adrienne Nelson on Tuesday ruled that the combination would reduce head-to-head competition in the narrowly defined market of traditional supermarkets, which excludes Amazon, Walmart, Costco and discount stores. Albertsons then called off the merger.
The merger would have given the combined firm more leverage with wholesalers like Southern Glazer’s and increased supply-chain efficiencies. Kroger promised to invest $1 billion in lowering prices post-merger. Consumer welfare had been the north star of antitrust law for four decades until Ms. Khan took over the FTC.
Alas, Ms. Khan prioritizes progressive hobby-horses above consumers. Grocery unions claimed the merger would make it harder to play Kroger against Albertsons to win higher wages and more generous benefits. But if that’s true, the FTC challenge will also likely result in higher prices, and it may cause some stores to close because they can’t compete.
Albertsons is now suing Kroger for billions of dollars in damages for allegedly failing to exercise its “best efforts” to secure regulatory approval for the merger. But Kroger offered to divest 579 of 5,000 stores to C&S Wholesale Grocers, only to have Ms. Khan and the judge say this isn’t good enough.
There’s nothing Kroger could have done to convince Ms. Khan to drop her lawsuit, which became a cause célèbre on the left. She has developed a media fan club by championing progressive causes like bans on employer non-compete agreements and junk fees. But she’ll mostly be remembered for harassing businesses to no productive end and many legal defeats.
Team Trump Economic Contradictions
Khan will be gone in a much needed house-cleaning sweep.
But bear in mind vice-president elect JD Vance has high praise for Khan.
Please consider this July 18, 2024 WSJ Flashback J.D. Vance, Lina Khan and the GOP’s Economic Contradictions
Do Republicans want to rein in the regulatory state or unleash it? It’s hard to tell these days, and the contradiction comes into sharp focus in J.D. Vance’s embrace of Lina Khan, Elizabeth Warren’s favorite regulator who runs the Federal Trade Commission.
At a Bloomberg technology forum in February, Mr. Vance called Ms. Khan “one of the few people in the Biden administration that I think is doing a pretty good job.” At what? Breaking the law and losing in court?
The FTC Chair has been the most ambitious Biden regulator, stretching the law at every opportunity to impose her policy views on antitrust and other matters. No Biden regulator has lost more in court as a result. Federal judges rejected Ms. Khan’s efforts to block the Microsoft-Activision and Meta-Within Unlimited acquisitions. Another judge this month tossed her ban on non-compete agreements.
Mr. Vance nonetheless supports her policy of jettisoning the consumer-welfare antitrust standard that has prevailed for 40 years. Her revised guidelines empower the agency to challenge mergers because of their effects on workers, suppliers and minority ownership stakes, among other non-antitrust factors.
The FTC is challenging the Kroger-Albertsons grocery tie-up on the grounds it would reduce retail labor competition, no matter that the supermarkets compete with countless businesses for workers. They aim to reduce prices by increasing their leverage with suppliers. The combined company would also compete more vigorously with big-box stores.
Ms. Khan also isn’t doing any favors for U.S. workers. Amazon and iRobot, the Roomba vacuum manufacturer, blamed regulatory obstacles in calling off a merger in January. Afterwards iRobot announced it was cutting nearly a third of its workforce and research and development spending by “offshoring of non-core engineering functions to lower-cost regions.”
Mr. Vance’s support for Ms. Khan is all the more puzzling given her hostility to conservatives. She has harassed Elon Musk and accused former Pioneer Natural Resources CEO Scott Sheffield of colluding with the Organization of the Petroleum Exporting Countries (OPEC) based on dubious evidence. Mr. Sheffield’s political offense was criticizing Mr. Biden’s anti-fossil-fuel policies.
Trump’s Nauseating Pick for Labor Secretary
Getting rid of Khan will be a good thing because no one could possibly be worse.
Unfortunately, we will be saddled with a horrendous pick as Labor Secretary instead of the FTC.
I discussed this sorry state of affairs on November 25 in Trump’s Nauseating Pick for Labor Secretary Is the Teacher’s Union Favorite
Hard to believe, but Donald Trump nominated a favorite of teachers union chief Randi Weingarten as his Labor Secretary. Why would Mr. Trump want to empower labor bosses who oppose his economic agenda and spent masses to defeat him?
Weingarten is truly rat vomit nauseating. We should be expanding right to work laws not trashing them.
If voters wanted the problems of the Chicago school system, they would have voted for Harris.
Meanwhile, the big question is how much more damage the Khan and the Biden administration will do before they are both gone.
I see several parties to the economic action:
1) The business, its managers and investors. 2) The workers at the business. 3) The customers of the business. 4) competitors of the business. 5) workers at the competitors.
The regulators tend to put workers, both #2 and #5, near the top, and the owners and managers #1 near the bottom. (Hence their liking of unionization, to “screw” more pay out of the bosses.) The public often thinks similarly.
And, for lack of alternatives, regulators support competitors in hopes of driving down the profits and amount of money bosses, managers and big-investors get from companies.
How much money do bosses, managers and investors deserve to get? (Are they getting too much?) Do we need a new Ayn Rand to better inform us of what they deserve?
Lina Khan was the bright spot of the Biden administration. She was the cop on the beat enforcing antitrust law and protecting the consumer and the economy. Monopolies are the downfall of economies.
You are entitled to you opinion. Mine is that she is a complete marxist fool
When I was an attorney I did some antitrust work. With the primacy of the Chicago school, antitrust became a seldom seen backwater.
That is both good and bad. Antitrust is an important part of ensuring competition. Our society has been made worse off by killing it.
It has been made better off in some ways too. It is a thicket of an issue.
Frankly it was encouraging to see someone try to revive it. I do not know enough about Kahn to make a judgment whether she was good or bad. But I can say that we need a return to some of the precepts encapsulated in antitrust if we are to fix what ails us.
They should be going after medical providers with Patman-Robinson.
There is a lot of unrecognized chained sales practices going on, where supplies/distributors muscle smaller parties into compliance (often with intangible “goods”), and it is easy to do while maintaining plausible deniability.
Mish should be an advocate of free markets. The software business (and others) are replete with parties with too much market power buying up a second or third rate company in a certain niche, integrating it “free” of charge, thereby destroying the entire market, and locking users into crappy software but without alternatives. Of course you can always spin this as a benefit to consumers, but it is destruction of competition nonetheless.
Destruction of the competition and monopoly profit is what drives all the “free market” preaching corporations, because, as Adam Smith noted, in a truly free market it is almost impossible to turn much of a profit. Pretending whatever happens is a result of free action is like saying that drivers in Manhattan prefer gridlock (since their free behavior, entering intersections that are not clear, is the proximate cause).
“Weingarten is truly rat vomit nauseating” – That alone was worth the time it took to read this post. Hopefully the karma will be evident to the public at large. We deserve it after the past four years of systematic destruction of the nation. ☮
T Roosevelt feared that price gouging by bad monopolies could result in civil uprising and that no one, even the elite of a bad monopoly(JP Morgan e.g.) was above the law. TR, as the elected president, would monitor and control the identified bad monopolies. Times have changed; the fox now lives in the hen house.
Typical millennial elite, born after Regan, schooled only in Law/Policy without business or even economics background, who think gov’t control of private business is always the answer.
Those like her need a degree from SOHK (school of hard knocks).
The first thing Congress should do is repeal that stupid Robinson-Patman Act and do a thorough study of other arcane regulations foisted on the country by the Administrative State who have been allowed to run roughshod over the rights of everyone.
With the incoming Musk-Trump kakistocracy, who needs competition anymore? After all, all these billionaires got rich by suppressing competition.
I’d say they mostly destroyed competition via better product/value. (although I’ll exclude the predator I-bankers and VCs who cozy up to the swamp for protection)
Only BVD rivals Tesla, nothing really competes against SpaceX, Starlink and soon Starship.
Doug Burgum got his first $B from Microsoft selling his company … some would say Microsoft was buying up the competition …so be it.
BYD electric cars are widely considered better/safer cars than Tesla. Guess where Musk’s $315 billion net worth mainly comes from? Keeping BYD out of the US market.
It is safe to say that Ms. Kahn is unlikely to take a job with one of the wall street investment banks.
Khan is perfect example of a DEI hire. She is one dumb b*tch.
Weingarten is a demon, a torturer of children.
I disagree with you regarding Lina Kahn. I have zero desire to see Kroger take over Albertsons and see yet higher food prices. Monopoly power has brought us no right to repair, the mess we see in the medical industry, and too much power in Wall Street and the financialization of our economy. Not to mention the Noeing McDonald Douglas merger that never should have happened. I’d rather see a slight over application of the anti monopoly laws than the non application we’ve seen since Reagan.
I don’t think the merged co. will raise prices. If they do, they’ll just lose their customers to Target, Wal-Mart and Aldi.
and Costco, Sams Club, BJs and so on.
Grocery stores in the next 15 years are going the same way as department stores have over the last 15. Put out of business by online and big box retailers/wholesalers.
A Kroger – and any of their iterations – is something I don’t want to see in my town, without regard to any corporate and legal crap mentioned.
Mariano’s is Kroger.
One billionaire bought the president, another one bought the vice president, and most of congress and the Supreme Court is owned by other billionaires.
Lets see how things go for non-billionaires over the next few years…
Life is short. Maybe not all billionaires but lets see how things go for the corrupt ones on the day of reckoning. They will wish they had all the wealth in the world to redeem their souls, but it wouldnt be accepted from them. They will receive their due without the least injustice.
Merger would result in prices dropping; Union wages and number of jobs would drop too. Profits and overall efficiency go up. Doubtful a “checker” becomes a lifelong decent career — it is now for the old timers (California average union checker wage is $80K/yr according to AI; newcomers much less of course.)
We’ll be seeing lots of marginal supermarkets closing over next 12 months; surviving stores will then raise their prices.
The Wrath of Khan
I believe that J. D. Vance is a total “Khan Job”..
And, the Establishment Blob/Swamp would be more than pleased if Trump was disposed of and Vance took over as Prez.
Hid business partners and their investments are very creepy…
I would have been much more satisfied with Tulsi Gabbard as VP.
So for you its various levels of crazy that you like, as compared to liking ALL crazy people ….
It seems that to succeed (ascend to higher and higher office) in politics, you must have a certain level of insanity.
Sociopathy, narcissism, greed, etc..
So, it would be best for us, the plebes, to live under politicians with the lowest level of these tendencies.
There is so much corruption and greed and perversity that one must “go along with” to be in the DC club, you’d have to be crazy to be willing to be involved with it.
FFS same thing happens in pharmacy retail, big players get better pricing by buying in mass qty. mom and pop get shut down. This is americas story, big eat little. Until one day we all buy from same company. Like Amazon.
Is it Lina Khan or Lina Kahn? It can’t be both, unless it is one of those Quantum thingy.
It would be on the FTC website
I’m gong to have to disagree here. Kroger and Albertson’s should have been allowed to merge? I don’t think so. We need to have more competition, not less. Look at what airline mergers have done to price and quality.
capital punishment may be replaced by a very long airplane journey in cattle class, say 180 days.
No matter what, I always seem to get the seat by the hip couple with the screaming one year old.
Kroger & Albertson’s are competing against the big box stores (and Aldi).
In this environment, one of them won’t survive. The merger meant to prevent that.
Albertsons would do well by firing the idiot Millennials in corporate who come up with the three card monte sales gimmicks in their weekly ads.
They’re too complicated for me!
Kroger still takes paper coupons 🙂
Albertsons has had a bad business models for decades it’s the keep growing or fail at any cost model. They have too many unprofitable stores from expanding and they don’t adapt to changing climates. Store selection is great and prices are high, Walmart on the other hand selection is poor and prices are not low. Walmart meat prices are high and quality is very poor. I avoid both. Albertsons isn’t compeating with Aldi or Amazon that’s a myth.
A most irritating gimmick is digital coupons I hate those things.
Grocery only stores are probably doomed over the next 15 years in the same way department stores have been over the last 15.
Online sales and big box retailers (Walmart/Costco etc) will ensure that in the same way it did to department stores. Covid showed how easy it is and most people have continued to embrace it.
In the end there is only going to be fresh produce/meat at local farmers markets/butcher shops and everything else is going to be online ordering or big box retailers.
Around here, grocery stores mostly used by seniors. After this cohort dies off, they will be a lot emptier. And prob close, as you say.
If the courts found that she was wasting everyones time, they would have told her to pound sand. If Trump looked even remotely innocent, they would have told the NY prosecutor to go pound sand. Trump’s went forward and so did Khans. Let the courts do their job.
right the systems have no biases… what world we’re you educated on?
Do you have any facts to back up your belief the courts are corrupt or you just “FoxNewsRiffing” right now?
The prosecutor in the 34 felony counts case is corrupt. Trump’s constitutional rights were violated. Over turn on appeal.
Last I heard he’s still a felon, convicted by 12 of his peers (two were lawyers) on not 5, not 10, not 20, not 30 but 36 counts. We’ll see if the higher courts are afraid of him.
Trump aides mull abolishing FDIC as part of dramatic banking deregulation spree: report New York Post. This would instantly crash the banking system. https://nypost.com/2024/12/13/business/trump-aides-mull-abolishing-fdic-as-part-of-deregulation-spree/
the FDIC isn’t the problem, its the Federal Reserve that is the issue. its like complaining about a hang nail on a toe with gangrene.
Then, w/o FDIC, USTs or TBTF banks become the place for cash. Kinda like that already given low FDIC limit (relative to payrolls).
Free market would punish banks with poor balance sheets.
Leave FDIC at $25-100K/person (not per bank) to protect small savers.