FTC Investigates Walmart, Amazon Over Supply Disruptions

In a press release, the Federal Trade Commission (FTC) announced nine major retailers and wholesalers, including Walmart and Amazon, have 45 days to provide information about their operations to identify the causes of supply chain disruptions that impede economic recovery.

In a 4-0 vote on the orders, the FTC commissioners decided that studies that do not have a specific law enforcement purpose are justified under Section 6(b) of the FTC Act.

The retailers must submit internal documents related to the disruptions, including "strategies for supply chains, pricing and marketing, costs, profit margins and sales volume, and selection of suppliers and brands." Moreover, the commission called for "voluntary comments" that could "provide market participants with an opportunity to surface additional issues and examples of how supply chain disruptions affect competition.”

“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,” stated FTC Chair Lina 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.”

By examining whether the obstructions are “leading to specific bottlenecks, shortages, anticompetitive practices, or contributing to rising consumer prices," the commission could shape future regulations to maintain or increase the level of competition in key industries.

According to a former FTC official, the commission will need to distinguish between price increases resulting from supply-demand dynamics and those resulting from improper relationships.

A meeting about supply issues between President Joe Biden and CEOs from Walmart, Food Lion, Mattel, and Best Buy among others, was held the same day. President Biden was due to speak after the meeting, but the White House rescheduled the remarks for Wednesday citing the President’s desire to spend more time with CEOs.

President Biden mentioned the FTC's recent investigation of the oil and gas industry in his statement, but not the probe into supply chain disruptions.