Background

The Federal Trade Commission has launched a probe into how supply chain disruptions are impacting consumers and competition, the latest in a string of related efforts by the federal government.

While much of the focus in recent months has been breaking the logjam of cargo containers at U.S. ports, the FTC is taking a broader look into market conditions and business practices that may have worsened supply chain disruptions or led to asymmetric effects. The agency will also examine whether these disruptions are leading to specific bottlenecks, shortages, or anticompetitive practices or contributing to rising consumer prices.

The FTC has ordered nine large retailers, wholesalers, and consumer good suppliers to provide within 45 days details on (1) the primary factors disrupting their ability to obtain, transport, and distribute their products, (2) the impact these disruptions are having in terms of delayed and canceled orders, increased costs, and prices, (3) the products, suppliers, and inputs most affected, (4) the steps the companies are taking to alleviate disruptions, and (5) how the companies allocate products among their stores when they are in short supply. The FTC also is requiring the companies to provide internal documents on supply chain strategies; pricing; marketing, and promotions; costs, profit margins, and sales volumes; selection of suppliers and brands; and market shares.

Further, the FTC is soliciting voluntary comments from retailers, consumer goods suppliers, wholesalers, and consumers on how supply chain issues are affecting competition in consumer goods markets.

Sandler, Travis & Rosenberg is continuing a campaign to advocate with federal regulators and lawmakers on solutions to the supply chain crisis. For more information on this campaign and how to participate, please contact Ned Steiner at (202) 730-4970 or via email.

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