December 07, 2021

FTC and DOC Among Agencies to Advance Initiatives in Biden Administration’s ‘Supply Chain Action Plan’

On December 1, 2021, President Joseph Biden released a statement proclaiming that, despite widely reported supply chain problems, with “the actions the administration has taken in partnership with business and labor, retailers and grocery stores, freight movers and railroads, [store] shelves are going to be stocked.” Answering the Biden administration's call to mobilize federal agencies in addressing the ongoing supply chain issues, several federal agencies — including the Federal Trade Commission (FTC) and the Department of Commerce (DOC) — have taken steps in the last month, either under the mandate of the Biden administration or under other statutory authority, to conduct supply chain reviews in the retail and manufacturing industries.

With this background in mind, the FTC on November 29, 2021, ordered nine large retailers, wholesalers, and consumer good suppliers to respond and provide internal documents within 45 days about the reasons behind, and their respective strategies to cope with, the recent supply chain disruptions in consumer goods markets. The recipients — Walmart Inc.,, Inc., Kroger Co., C&S Wholesale Grocers, Inc., Associated Wholesale Grocers, Inc., McLane Co, Inc., Procter & Gamble Co., Tyson Foods, Inc., and Kraft Heinz Co. — are expected to provide data about “the primary factors disrupting their ability to obtain, transport and distribute their products; the impact these disruptions are having in terms of delayed and canceled orders, increased costs and prices; the products, suppliers and inputs most affected; and the steps the companies are taking to alleviate disruptions; and how they allocate products among their stores when they are in short supply.” They are also expected to provide internal documents related to the recipients’ current strategies on “pricing; marketing and promotions; costs, profit margins and sales volumes; selection of suppliers and brands; and market shares” to help FTC examine “whether supply chain disruptions are leading to specific bottlenecks, shortages, anticompetitive practices, or contributing to rising consumer prices.” Meanwhile, the FTC also invited any retailers, consumer goods suppliers, wholesalers and consumers to file voluntary comments about additional issues and examples of how supply chain disruptions are affecting competition.

The FTC’s inquiry stems from Section 6(b) of the FTC Act, which authorizes the FTC “to conduct wide-ranging studies that do not have a specific law enforcement purpose.” The four current FTC commissioners unanimously approved these orders after a one-week delayed vote while the Republican and Democratic FTC commissioners reached a consensus on the scope of questions designed for this study.

While the FTC’s study does not appear to be directly prompted by the Biden administration’s current directives, it is against the backdrop of the Biden administration’s “supply chain action plan” throughout the past year, which calls for interagency collaboration to tackle supply chain problems.

Also on November 29, 2021, President Biden met with leaders of major retailers including Walmart Inc., Best Buy, Food Lion, Qurate Retail Group, Todos Supermarket, Etsy, Kroger, CVS and QVC, as well as with executives from businesses that sell electronics, toys, clothing and other items that are common gifts, to discuss recent observations and progress made against supply chain disruptions. Topics during this meeting include the concerted efforts by the Biden administration, port companies and labor unions to alleviate logjams at ports by 40% in terms of decrease in the number of containers sitting at docks for eight days or longer. These concerted efforts include the Department of Transportation’s (DOT) November 2021 actions to extend flexibility on the number of working hours for truck drivers and to allow port authorities to redirect cost savings from federal grants into innovative supply chain solutions.

DOT is also working the Federal Maritime Commission (FMC) to find improvements in exchanging data between different supply chain actors in order to reduce “delays and inefficiencies as cargo moves from one part of the supply chain to another.” The two agencies plan to publish a request for information “on standardized data exchange requirements for goods movement in the transportation supply chain.” Meanwhile, the FMC plans to convene six supply chain innovation teams to explore options to facilitate container return and delivery process at marine terminals amidst the White House’s urging that FMC consider antitrust actions against unfair practices by ocean carriers. The announcement of these actions are also accompanied by another meeting between President Biden and the CEOs of retail companies such as Walmart and Target to discuss speeding up deliveries, lowering prices for consumers and making commitment toward meeting critical holiday demand.

These DOT and FMC actions are built upon the goals and timelines designated by the Biden administration to its recently established Supply Chain Disruptions Task Force. Led by the DOT, DOC and Department of Agriculture, the Task Force works toward implementing findings from a 100-day supply chain review mandated under President Biden’s February 24, 2021, Executive Order with $17 billion of new appropriations for supply chain infrastructure from the November 2021 Bipartisan Infrastructure Deal.

Earlier in November, public comments were due in response to a September survey request that the DOC’s Bureau of Industry and Security published in preparing a joint report by the DOC and Department of Homeland Security to the White House on the global semiconductor shortage and a separate DOC request on supply chain disruptions in the broader information and communications technology sector. Both were intended to implement the February 24, 2021, Executive Order by “both diagnos[ing] chokepoints in the supply chain and offer[ing] firms data that can help them adapt their production processes to adjust to the supply shortage,” according to a White House briefing. While the breadth of the DOC survey requests has since raised some concerns by technology and business groups about especially sensitive information, including usually confidential sales and sourcing data, hundreds of comments were filed in those DOC dockets.

The current Administration’s push for more actions on supply chain solutions is showing no signs of slowing down. As some new bills having been introduced in Congress, on December 3, 2021, more than 20 House Democrats continue to urge House leadership to consider a range of additional bills to ease supply chain pains throughout the country. As noted above, to ensure that your supply chain concerns are fully shared with the administration and Congress, interested parties can submit voluntary comments by January 13 on the issues and scenarios that jeopardize their supply chains and affect their businesses.

For More Information

Faegre Drinker will continue monitoring and reporting on this fast-evolving topic as new developments unfold. For further information, you may contact the co-chairs of the consumer products and retail industry team, Kathi Murphy and Zoë Wilhelm, partners Laura Phillips and Alicia Batts, associate Qiusi Newcom, or your usual Faegre Drinker attorney.

Related Industries

The Faegre Drinker Biddle & Reath LLP website uses cookies to make your browsing experience as useful as possible. In order to have the full site experience, keep cookies enabled on your web browser. By browsing our site with cookies enabled, you are agreeing to their use. Review Faegre Drinker Biddle & Reath LLP's cookies information for more details.