October 4, 2022

Volume XII, Number 277

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October 03, 2022

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FTC Announces Inquiry into the Infant Formula Shortage

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.

© 2022 Proskauer Rose LLP. National Law Review, Volume XII, Number 159
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About this Author

Christopher Ondeck Antitrust Litigator chair of  Proskauer Rose nationwide Antitrust Group
Partner

Chris Ondeck is a partner in the Litigation Department and vice-chair of the Antitrust Group. He focuses his practice on representing 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, defense, medical devices, metals,...

202-416-5865
John Ingrassia, Antitrust Attorney, Telecommunications, Proskauer Law firm
Special Counsel

John Ingrassia is a special counsel and advises clients on a wide range of antitrust matters in various industries, including chemicals, pharmaceutical, medical devices, telecommunications, financial services, health care, and others. His practice includes a significant focus on the analysis of Hart-Scott-Rodino pre-merger notification requirements, the coordination and submission of Hart-Scott-Rodino filings, and the analysis and resolution of antitrust issues related to mergers, acquisitions, and joint ventures. John has extensive experience with the legal, practical,...

202.416.6869
Kelly Landers Hawthorne, Proskauer Law Firm, New York, Litigation Attorney
Associate

Kelly Landers Hawthorne is an attorney in the Litigation Department.

Education

  • Columbia Law School, J.D., 2017

  • George Mason University, M.Ed., 2013

  • University of Richmond, B.A., 2011

212-969-3537
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