On August 1, the Federal Trade Commission (FTC) and Department of Justice (DOJ) virtually cohosted the first public meeting of the multiagency Strike Force on Unfair and Illegal Pricing (Strike Force), focused on antitrust and consumer protection enforcement. President Joe Biden announced the formation of the Strike Force in March, promising to “crack down on companies [that] break the law while keeping prices high for American consumers.” Joined by six other federal agencies – the Department of Agriculture (USDA), Department of Health and Human Services (HHS), Department of Transportation (DOT), Securities and Exchange Commission (SEC), Federal Communications Commission (FCC) and Consumer Financial Protection Bureau (CFPB) – the Strike Force highlighted the key initiatives each agency has undertaken in recent months to combat rising prices across a wide array of industries. The breadth of agencies on the Strike Force continues the whole-of-government approach to enforcement, a hallmark of the Biden administration.

The public portion of the meeting included remarks from senior officials from all eight agencies. Each agency official highlighted their actions thus far as part of the Strike Force that are intended to lower costs for consumers.

FTC Chair Lina Kahn began the meeting, declaring that the Biden administration has saved Americans millions of dollars since the launch of the Strike Force by slashing credit card fees, capping the cost of insulin and making it more affordable to obtain hearing aids, along with other efforts. She then announced her intention to launch an FTC “inquiry into grocery prices in order to probe the tactics that big grocery chains use to hike prices and extract profits from everyday Americans at the checkout counter.” Khan noted, “Grocery prices skyrocketed during the pandemic, due in large part to higher costs and supply chain disruptions … [but] in the years since, costs have fallen and supply chains have improved. But many items are still too costly, and many large grocery chains are still raking in enormous profits. The FTC is determined to understand why.”

The other agencies highlighted their recent efforts in support of the Strike Force, including:

• DOJ Acting Associate Attorney General Benjamin Mizer provided a snapshot of the DOJ’s efforts to combat unfair prices in the grocery, automobile and healthcare industries as well as efforts to combat fraudulent schemes involving on government contracts.
• Assistant Attorney General Jonathan Kanter highlighted eight concrete actions that the DOJ Antitrust Division has taken to make everyday life more affordable for American consumers. The actions touched on healthcare, college tuition, housing, income/wages, airfare, groceries, the supply chain and concert fees.
• Principal Deputy Assistant Attorney General Brian Boynton highlighted the DOJ Civil Division’s enforcement efforts in this space involving the Consumer Protection Branch and the Civil Fraud Section. Specifically, Boynton highlighted that the Civil Division will work closely with the FTC to bring civil penalty cases and that drug price fixing is a particular area on which the division intends to focus its efforts.
• USDA Deputy Secretary Xochitl Torres Small highlighted the department’s efforts to promote competition in the agricultural industry and lower costs for consumers by launching a billion-dollar investment plan to directly incentivize competition and alter the supply chain, with the hope of impacting prices and food choices. Additional efforts include entering into partnerships with various state attorneys general to address fair competition in the agricultural industry and providing monetary support for food procurement and independent meat processing.
• HHS Deputy Secretary Andrea Palm highlighted HHS’ work to make healthcare more affordable and transparent. She added that HHS intends to investigate the ownership interests of private equity (PE) funds and real estate investment trusts, with a particular focus on nursing home ownership.
• CFPB Director Rohit Chopra stated that the bureau is also focusing on alleged PE price gouging, emphasizing that PE investors are often not held responsible for illegally mistreating consumers. Chopra also highlighted the CFPB’s work on all aspects of the credit card market, including looking into alleged bait-and-switch rewards tactics, curbing excessive fees and ensuring competition, all against the backdrop of high interest rate margins.
• DOT Acting General Counsel Subash Iyer announced efforts to lower the cost of airline travel for American families, including banning junk fees, allowing parents to sit with young children without paying fees and providing airline passengers with prompt refunds when airlines fail to deliver.
• FCC Chair Jessica Rosenworcel detailed how the commission is working to tackle unfair and deceptive pricing tactics in the communications sector.
• Finally, SEC Chair Gary Gensler emphasized that the SEC is committed to addressing unfair, anticompetitive and deceptive business practices. He also discussed issues associated with emerging technologies, especially artificial intelligence (AI), and noted that if a company relies on AI, the company will be responsible for the results.

Takeaways

• The Strike Force is the most recent example of the current administration’s whole-of-government approach to antitrust enforcement. The breadth of agencies involved demonstrates the range of tools available to investigate and enforce issues relating to consumer products and activities.
• The Strike Force presentations reveal a road map for federal enforcement activities focusing on consumer pricing practices across a variety of industries. Companies should take note of the current enforcement priorities and consult with experienced antitrust, consumer protection and regulatory counsel to assess the risks associated with company practices and to ensure compliance programs are tailored to reduce the risk that the company’s practices are on a collision course with the Strike Force.

We expect regulatory scrutiny to continue across industries in the face of an aggressive antitrust enforcement environment. BakerHostetler’s attorneys have extensive experience helping clients with these issues, including advising and defending clients in antitrust and consumer protection-related matters. Please feel free to contact any of our experienced professionals if you have questions about this alert.

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