Kroger Files Lawsuit To Halt an Internal FTC Review of Albertsons Merger

Two years ago, grocery giant Kroger proposed a $25 billion deal to buy rival chain Albertsons. However, the Federal Trade Commission (FTC) wants to delay the merger while it takes some time to review. Fearing such an internal review would take years, Kroger fired back with a lawsuit.

Calling the FTC’s action unconstitutional, Kroger wants a Cincinnati court to stop the regulator’s in-house review and let a federal court decide the legality of the merger. Kroger has a pending federal case scheduled to be heard on Aug. 26. With a court looking at the deal versus the FTC’s internal judges, Kroger may have a better chance at getting the merger approved.

“We are asking the court to halt what amounts to an unlawful proceeding before the FTC’s own in-house tribunal,” said Kroger Chairman Rodney McMullen, per the New York Post.

Earlier this summer, the U.S. Supreme Court made a crucial ruling that significantly curbed the enforcement power of some federal agencies. The decision could influence Kroger’s Cincinnati court case and effectively interrupt the FTC’s request to review the merger deal in-house.

“We’re deep, deep in uncharted waters here,” said Christine Bartholomew, a professor of law and vice dean of academic affairs at the University at Buffalo School of Law, per The Washington Post. “This is an attack on the legitimacy of the Federal Trade Commission.”

To compete with retail giants Amazon and Walmart, Kroger revealed plans in October 2022 to buy Albertsons, which would bring the number of locations to over 4,000. As part of the deal, Kroger promised to increase employee wages and lower prices by $1 billion. This is double the company’s initial offer of $500 million.

The FTC argues the merger will lead to higher prices for consumers and hurt employees. According to the regulator, the grocery behemoth would have greater leverage when negotiating employment conditions and less motivation to improve quality. The FTC has yet to comment on the recent lawsuit filed by Kroger.