US Senator Elizabeth Warren has directed a letter to the Federal Trade Commission (FTC) and the antitrust department of the Ministry of Justice. In it, she calls on the authorities to carefully check the planned takeover of Foot through Dick’s Sporting Goods and, if necessary, to block them. The senator expressed concerns that the merger of two of the largest retailers in the market for sports shoes could lead to higher prices for consumers, job losses and disadvantages for small companies.
According to Warren, the merger would unite the largest sporting goods dealer in the USA with one of the largest sports shoe dealers and give the new company control over more than 15 percent of the US sports article market. This could result in a duopoly with JD Sports and require a “significant examination by the antitrust authorities”. She emphasized that the elimination of competition could “lead to higher prices for consumers and other negative effects”. This is particularly worrying against the background that many families would have to struggle with increasing costs at the beginning of school. A current survey shows that 39 percent of the parents cannot afford school this year and 44 percent plan to accept debts.
The planned takeover also raises concerns about employees and small companies. Foot Lichen has already indicated that some branches could be closed as a result of the merger. This would lead to further job losses in municipalities who have to deal with high closure rates in retail anyway. In addition, the new company would have a stronger negotiating power to manufacturers, which could disadvantage independent retailers and possibly result in behavior contrary to competitive behavior.
In this context, Senator Warren referred to the recent decision of a federal judge to block the merger of Kroger and Albertson. This shows the advantages of a functioning competition. She noticed that the new CEO of Albertsons has announced since then to concentrate on keeping prices low to win customers. Finally, Warren demanded that the FTC and the Ministry of Justice should check and block this merger thoroughly if they are a shame on the competition under violation of applicable federal laws. This is particularly relevant, since consumers are already confronted with higher shoe prices by the customs policy of President Trump, which, according to economists, could increase by up to 44 percent.
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