The Functional Government Initiative (FGI) has filed a transparency lawsuit against the Federal Trade Commission (FTC) for withholding records about the price gauging investigation in the meat industry, saying in a release that the FTC has been “weaponized” to shift blame for inflation onto the private sector.
“On issue after issue, in the face of public scrutiny over whether its own policies bear any fault, the administration’s default position has been to investigate the private sector,” said FGI spokesman Peter McGinnis. “Instead of engaging with industries in a cooperative way to address our supply chain crisis and rampant inflation, the Biden Administration appears to have weaponized the FTC against the most productive individuals and companies in America. The question now is what special interests are driving this dysfunctional strategy and which industry may be next. FGI intends to find out.”
According to a release by FGI, this is the third lawsuit against the FTC. In November 2021 meat prices increased rapidly and the Biden Administration called for the FTC to investigate the meat industry, the FTC said in a statement. This included investigating nine retailers, wholesalers and consumer goods suppliers including Walmart Inc., Amazon.com, Kroger Co., C&S Wholesalers Grocers, Inc., Associated Wholesale Grocers, Inc., McLane Co, Inc., Procter & Gamble Co., Tyson Foods, Inc., and Kraft Heinz Co. The companies had 45 days to respond and the orders directed companies to provide internal documents and also send detailed factors about supply chain disruptions. They also asked for information about the prices of their products, profit margins, and how products are distributed when demand is higher than supply.
The FTC issued the orders under Section 6(b) of the FTC Act, which gives the FTC authority to conduct studies that are unrelated to law enforcement, according to the release.
“Supply chain disruptions are upending the provision and delivery of a wide array of goods, ranging from computer chips and medicines to meat and lumber. I am hopeful the FTC’s new 6(b) study will shed light on market conditions and business practices that may have worsened these disruptions or led to asymmetric effects,” said Chair Lina M. Khan. “The FTC has a long history of pursuing market studies to deepen our understanding of economic conditions and business conduct, and we should continue to make nimble and timely use of these information-gathering tools and authorities.”
This came after people criticized the high meat prices around the time of July 4. Officials in the administration blamed the meat industry for price gauging, but then the FGI filed a Freedom of Information Act request in August 2022 to see what was driving the investigation.
The FGI statement added that the FTC has been “unresponsive” and has been withholding documents. They called out the Biden Administration for using the FTC as a “political shield to redirect blame to the private sector.”
The release also said that the Biden Administration has had investigations in the oil and gas industry, as well as the baby formula industry at the time of supply crises. It added that the egg industry could be next, as supply chain issues and inflation have caused prices to skyrocket as well.
The FGI statement included a link to a January 19 Reuters article, saying that Farm Action wants the FTC to see if there is price gouging occurring. This is after the prices of eggs increased 138% in December compared to a year earlier, according to information from the Bureau of Labor Statistics. Cal-Maine Foods controls about 20% of the egg market and reported that sales were up 110% and profits rose 600%, While they said the decrease in supply was due to avian flu, the company had not reported any positive avian flu tests at the farms, the Reuters report said.
