On May 24, 2022, the FTC announced a widespread inquiry into the ongoing infant formula shortage. The agency had been tasked by the White House with investigating any price gouging or unfair market practices in the industry. The agency is seeking public comments on “various factors that may have contributed to the infant formula shortage…as well as its impact on families and retailers.”

In its press release, the agency identified issues of particular concern, including:

  • Fraud, deception, or scams consumers may have experienced when trying to buy infant formula,
  • Retailers’ experiences since the formula recall began in February,
  • How mergers and acquisitions, and FDA regulations, have affected the number of suppliers of infant formula, capital investment in the market, and the overall manufacturing capacity of suppliers, and
  • Whether regulatory barriers have blocked non-US companies from entrance to the market.

The FTC has also requested comment relating to barriers families have faced in purchasing infant formula through the Special Supplemental Nutrition Program for Women, Infants, and Children (“WIC”) and barriers that have prevented formula suppliers from entering the WIC program.

In addition to listing these specific topics, the FTC welcomed additional public comments on any concerns commenters deem to be relevant or appropriate for the agency’s consideration.

FTC Chair Lina Kahn released a supplementary statement regarding the inquiry, detailing numerous actions the FTC is taking to address the infant formula shortage.  The FTC announced that it will investigate any potential unlawful business practices committed by infant formula manufacturers and distributors that may be contributing to the limited supply of formula. According to Chair Kahn, the FTC will examine whether discriminatory terms or conditions were used to prevent some grocers, pharmacies, and other stores from accessing infant formula during the shortage, particularly those retailers located in rural or inner-city areas. The FTC will seek to hold accountable “anyone who deceives, exploits, or scams American families trying to buy infant formula,” including through the use of online “bots” to purchase and resell formula at unfair prices.

Any business that manufactures, distributes, or retails infant formula can expect to hear from the FTC soon, if they have not already. This is the time then to redouble compliance training and efforts, and to bring compliance materials up to date to reflect both current market and industry conditions as well as current enforcement priorities.

Special thanks to summer associate Sarah W. Ghivizzani in the Washington, DC office for her contributions to this post.

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Photo of Christopher E. Ondeck Christopher E. Ondeck

Chris Ondeck is co-chair of the Firm’s nationwide Antitrust Group. He represents clients in civil and criminal antitrust litigation, defending mergers and acquisitions before the U.S. antitrust agencies, defending companies involved in government investigations, and providing antitrust counseling.

Chris has handled antitrust matters…

Chris Ondeck is co-chair of the Firm’s nationwide Antitrust Group. He represents clients in civil and criminal antitrust litigation, defending mergers and acquisitions before the U.S. antitrust agencies, defending companies involved in government investigations, and providing antitrust counseling.

Chris has handled antitrust matters for clients in a number of industries, including advertising, aerospace, alcoholic beverages, appliances, building materials, consumer products, defense, franchise, medical devices, metals, mining, natural resources, oil and gas, packaging, pharmaceuticals, software and telecommunications. He also has developed substantial experience advising clients regarding the application of the antitrust laws to the pharmaceutical industry, the agriculture industry, trade associations and the energy industry.

Photo of John R. Ingrassia John R. Ingrassia

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating…

John is a partner at the Firm, advising on the full range of foreign investment and antitrust matters across industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services consumer goods and health care. He is the first call clients make in matters relating to competition and antitrust, CFIUS or foreign investment issues.

For more than 25 years, John has counselled businesses facing the most challenging antitrust issues and helped them stay out of the crosshairs — whether its distribution, pricing, channel management, mergers, acquisitions, joint ventures, or price gouging compliance.

John’s practice focuses on the analysis and resolution of CFIUS and antitrust issues related to mergers, acquisitions, and joint ventures, and the analysis and assessment of pre-merger CFIUS and HSR notification requirements. He advises clients on issues related to CFIUS national security reviews, and on CFIUS submissions when non-U.S. buyers seek to acquire U.S. businesses that have national security sensitivities.  He also regularly advises clients on international antitrust issues arising in proposed acquisitions and joint ventures, including reportability under the EC Merger Regulation and numerous other foreign merger control regimes.

His knowledge, reputation and extensive experience with the legal, practical, and technical requirements of merger clearance make him a recognized authority on Hart-Scott-Rodino antitrust merger review. John is regularly invited to participate in Federal Trade Commission and bar association meetings and takes on the issues of the day.

Photo of Kelly Landers Hawthorne Kelly Landers Hawthorne

Kelly Landers Hawthorne is an associate in the Litigation Department.

While at Columbia, she served as an articles editor of the Columbia Journal of Law & the Arts and was involved with the Lawyering in the Digital Age Clinic.  She also worked as…

Kelly Landers Hawthorne is an associate in the Litigation Department.

While at Columbia, she served as an articles editor of the Columbia Journal of Law & the Arts and was involved with the Lawyering in the Digital Age Clinic.  She also worked as a judicial intern for the Honorable Sandra Townes of the United States District Court for the Eastern District of New York.

Kelly is a Teach For America alumnus and taught middle school special education and math in Washington, D.C. prior to law school.