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Tags: Money | Federal Trade Commission | FTC | oil | gas

FTC Seeks to Crack Down on 'unlawful' U.S. Oil and Gas Industry Mergers

FTC
FTC headquarters (AP)

Monday, 30 August 2021 10:52 AM

The Federal Trade Commission will seek to deter "unlawful" mergers in the oil and gas industry and crack down on practices that may be harming consumers at the gasoline pump, FTC Chair Lina Khan told the White House in a letter last week.

The letter, obtained by Reuters, was addressed to White House economic adviser Brian Deese and promised to start an investigation of abuses in the "franchise market" for retail fuel stations, among other steps.

Khan told Deese she was concerned that the FTC's approach to merger reviews in recent years had "enabled" significant consolidation in the industry and created "conditions ripe for price coordination and other collusive practices."

To tackle the issue, she said the FTC would "identify additional legal theories" to challenge mergers in which dominant players in the industry were buying up family-run businesses.

She said the commission would also study its policies that require divestitures during mergers of fuel stations in overlapping markets to ensure that that was not encouraging further consolidation and anticompetitive behavior.

"I am especially interested in ways that large national chains may 'restore' higher prices through collusive practices, and I will direct our staff to investigate any signs of this type of conduct," she wrote.

To discourage what she called proposals for "illegal mergers," the FTC would reimpose "prior approval" requirements.

Lastly, she said the commission would probe practices related to fuel stations that are franchised.

"We will need to determine whether the power imbalance favoring large national chains allows them to force their franchisees to sell gasoline at higher prices, benefitting the chain at the expense of the franchisee’s convenience store operations," she wrote. (Reporting by Jeff Mason; Editing by Doina Chiacu and Jonathan Oatis)

© 2021 Thomson/Reuters. All rights reserved.


StreetTalk
The Federal Trade Commission will seek to deter "unlawful" mergers in the oil and gas industry and crack down on practices that may be harming consumers at the gasoline pump, FTC Chair Lina Khan told the White House in a letter last week.
Federal Trade Commission, FTC, oil, gas
285
2021-52-30
Monday, 30 August 2021 10:52 AM
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