Judge Adrienne Nelson, who was nominated by President Biden to the federal district court in Oregon, issued a 71-page opinion that blocked a proposed merger of two national grocery store chains. Judge Nelson found that those objecting to the merger were likely to succeed on their claims that it is anti-competitive and would result in higher prices for consumers. The December2024 decision was in FTC v Kroger Co.
What happened in this case?
Kroger and Albertson’s are the second and fourth largest grocery store companies in the nation. In October 2022, they announced plans to merge via a purchase by Kroger of Albertson’s for over $24 billion. After a civil investigation, the Federal Trade Commission (FTC) began administrative proceedings against the merger before an administrative law judge. On the same day, the FTC and eight states filed a federal lawsuit to stop the merger, contending that it is anti-competitive and will raise consumer prices in violation of federal antitrust law.
Discovery continued, and in late August 2024, the court held a fifteen-day preliminary injunction hearing, including extensive expert and other testimony. Judge Nelson carefully considered the record and relevant precedent and issued her decision on December 10, 2024.
How did Judge Nelson rule and why is it important?
Judge Nelson thoroughly reviewed the record in the case and applicable case law and ruled that the FTC and the states were likely to succeed and so stopped the merger pending the outcome of the FTC administrative proceedings. She explained that based on the evidence presented at the hearing, the proposed merger “would lead to undue market concentration in multiple geographic markets,” which would “lessen competition” and raise prices. She wrote that “both qualitative and quantitative evidence” in the record shows that Kroger’s and Albertson’s “engage in substantial head-to-head competition” that the proposed merger would “remove,” so that the merger would produce “unilateral competitive effects” and “is presumptively unlawful.”
Judge Nelson also found that the efforts by Kroger’s and Albertson’s to defend the merger by pointing to the proposed divestiture of some of their stores was “not sufficient” to compensate for the significant anti-competitive effects of the proposed merger. Overall, she concluded, the FTC and the states had shown that the proposed merger would “substantially lessen competition” and raise grocery prices, and that the FTC and the states are “likely to succeed” on their antitrust claims. The day after the ruling, Albertson’s filed suit against Kroger, claiming it had not done enough to promote the merger.
Judge Nelson’s opinion is obviously important to the millions of US customers who shop at Kroger’s and Albertson’s. It may also be significant in other antitrust cases in the Ninth Circuit, which includes Oregon, California, Alaska, Arizona, Hawaii, Idaho, Montana, Nevada, and Washington. In addition, the decision serves as a reminder of the importance of confirming fair-minded judges to our federal courts.