Inaugural Strike Force Meeting Signals Broad Cross-Agency Focus on Pricing

The Federal Trade Commission (FTC) and the US Department of Justice (DOJ) on August 1, 2024 co-hosted the first public meeting of the Strike Force on Unfair and Illegal Pricing (Strike Force), formed by President Joseph Biden earlier this year. The Strike Force brings the FTC and DOJ together with representatives of six other leading federal agencies and signals a broad cross-agency focus on practices that may raise consumer prices. Given the breadth of the enforcement focus, there is a high likelihood of increased scrutiny in virtually every consumer-facing sector, with a pronounced initial focus by the FTC on grocery pricing.

In March 2024, President Biden announced the creation of the Strike Force as a way to “strengthen interagency efforts to root out and stop illegal corporate behavior that hikes prices on American families through anti-competitive, unfair, deceptive, or fraudulent business practices.” Framed as an effort to hold corporations “accountable when they try to rip off Americans,” President Biden signaled that the Strike Force would focus on a number of “key sectors where corporations may be violating the law and keeping prices high, including prescription drugs and health care, food and grocery, housing, financial services, and more.” Led by the FTC and the DOJ, the Strike Force has representation from six other federal agencies: the Consumer Financial Protection Bureau (CFPB), US Securities and Exchange Commission (SEC), US Department of Agriculture (USDA), US Department of Health and Human Services (HHS), US Department of Transportation (DOT), and Federal Communications Commission (FCC).

The Strike Force’s Inaugural Public Meeting

The August 1 meeting of the Strike Force began with a 45-minute session that was open to the public via an online webcast, which was transcribed. Echoing President Biden’s earlier sentiments, FTC Chair Lina Khan welcomed attendees with a characterization of the Strike Force as an initiative “to make sure that no American pays inflated prices due to corporate lawbreaking or exploitative tactics.” This was the first time that the Strike Force held such an open, “public” meeting. Following the open session, the webcast concluded, and the Strike Force met in a closed-door session. The public session was structured to enable the FTC, DOJ, and other involved agencies to highlight their consumer-focused initiatives and the actions they are taking, or intend to take, to address inflated consumer prices.

FTC

FTC Chair Lina Khan, speaking at the public session on behalf of the FTC, recounted the FTC’s “laser focus” on “ensuring that no American faces inflated prices due to illegal business practices.” Chair Khan pointed to the FTC’s recent actions to reduce the cost of items ranging from gasoline to asthma inhalers as evidence of the agency’s continued efforts. Of note, she referenced the agency’s ongoing work to finalize the “click to-cancel rule,” which will undoubtedly impact consumer-facing businesses across industries. Chair Khan concluded with an announcement that she intends to seek an FTC inquiry into grocery prices, aimed at probing whether collusion or other anticompetitive tactics are to blame for what were characterized as persistently high food prices.

DOJ

Representatives from the DOJ, including Acting Associate Attorney General Benjamin Mizer, Assistant Attorney General Jonathan Kanter, and Principal Deputy Assistant Attorney General Brian Boynton highlighted the agency’s enforcement efforts in the grocery, transportation, healthcare, higher education, housing, and entertainment industries. Notably, Principal Deputy Assistant Attorney General Brian Boynton underscored the DOJ Civil Division’s continued commitment to work with the FTC to bring civil penalty cases and emphasized the Justice Department’s focus on purported price fixing in the pharmaceutical sector.

CFPB

CFPB Director Rohit Chopra focused his remarks on key areas of focus for the agency: price gouging, junk fees, and credit card collusion. Director Chopra highlighted several examples of interagency collaboration on these efforts, such as the CFPB’s recent collaboration with the USDA and US Department of Education to address reports of school lunch junk fees.

SEC

SEC Chair Gary Gensler began with a reminder of the SEC’s core mission: “[G]uarding against deception, fraudulent or anti-competitive practice is at the heart of what the SEC does.” Chair Gensler went on to discuss the SEC’s efforts to bring enforcement actions to promote transparency, access, and fairness in the securities markets. As examples, Chair Gensler referenced a recent settlement with a large asset manager and enforcement actions involving allegations of overcharging and failure to disclose material information to consumers. Chair Gensler also called out the SEC’s rulemaking efforts. In closing, Chair Gensler explicitly acknowledged the increased reliance on artificial intelligence (AI) by companies and reaffirmed the SEC’s commitment to addressing unfair and deceptive conduct arising from the adoption and use of AI.

USDA

USDA Deputy Secretary Xochitl Torres Small began with a statement about the USDA’s ongoing efforts to increase competition in the agricultural industry. Recounting the USDA’s “unprecedented steps to stabilize agricultural markets” during COVID-19 and its launch of a “multi-billion-dollar investment plan” designed to boost supply chain resiliency, Deputy Secretary Torres Small highlighted recent progress toward “delivering more stable affordable food prices for families” and fostering competition across the food system.

HHS

HHS Deputy Secretary Andrea Palm began by assuring the audience that the agency is doing everything “within [its] power” to make healthcare “affordable, transparent, and fair for everyone.” Deputy Secretary Palm discussed HHS’s strategy to promote transparency, competition, and choice in healthcare, focusing on promoting choice in all parts of the healthcare system, lowering drug costs, and addressing the role of private equity companies and real estate investment trusts in healthcare consolidation, particularly in the nursing home sector.

DOT

DOT Acting General Counsel Subash Ayer focused on DOT’s efforts to “protect air travelers” and put “money back in people’s pockets.” Acting General Counsel Ayer highlighted DOT’s recent initiatives in the airline sector, including the announcement of a proposed rule that would ban fees on families traveling with young children, such as “family seating junk fees.”

Acting General Counsel Ayer also referenced DOT’s actions following what he described as “the IT meltdown” of July 19, 2024, citing the investigation of one airline and the issuance of letters to other large airlines warning them about “financial obligations to passengers during and following the IT meltdown and any cancellation or significant change.” Acting General Counsel Ayer reminded the audience of the refunds rule signed into law in May, which entitles passengers to “get their money back properly and in cash when they do not receive or accept travel alternatives following a cancellation or a major delay.”

FCC

FCC Chair Jessica Rosenworcel opted to focus on “one really big initiative” recently undertaken by the FCC to address the high rates charged for prison phone calls. Chair Rosenworcel attributed the years-long “injustice” of “sky-high usurious rates” to monopolistic practices by single providers.

What’s Next: The Potential for Broad and Varied Scrutiny

The convening of the Strike Force and the cross-agency focus on consumer prices and related practices can be viewed as the latest example of the current administration’s focus on addressing the public’s growing concerns about rising consumer prices. The White House and, in turn, federal agencies, are focused on the high consumer prices that Americans are facing—due in large part to inflation and the continuing effects of COVID-era supply chain disruption.

Of significance, the Strike Force represents a largely unprecedented and coordinated commitment by key consumer-focused federal agencies to collectively bring their resources to bear in investigating and potentially challenging pricing practices as unlawful. The gearing up of the Strike Force comes on the heels of recent efforts by the US Congress and the FTC to revitalize the Robinson-Patman Act, which is a Depression-era statute intended to curb price discrimination and is focused more on pricing to smaller businesses as opposed to consumers.

The breadth and sheer volume of proposed and implemented initiatives discussed by the agencies involved in the Strike Force should be viewed as a harbinger of increased scrutiny by these agencies. Consumer-facing businesses should take this opportunity to assess their practices and any potential exposure, as well as to prepare for the possibility of investigatory outreach. As a first step, organizations would be well served to consider, based on the nature of the organization’s business, which of the involved agencies may be most likely to be a source of scrutiny. As a further step, it would be prudent to conduct a holistic assessment of pricing practices to identify any areas that the agencies might view (fairly or not) as problematic. This would include—among many other practices—efforts to deter or delay competition, price signaling or other pricing communications, price gouging, selling below cost with the intent of eliminating market rivals, and price discrimination.