Senator Elizabeth Warren (D-MA) is asking the Federal Trade Commission and the Department of Justice to “closely scrutinize” Dick’s Sporting Goods’ proposed acquisition of Foot Locker, Inc. and “block the deal” if the merger is found to violate antitrust laws, as reported by CNBC. The senator, in a letter to the two agencies, argued that the $2.4 billion merger could raise costs, reduce competition, and lead to job losses.
She wrote that it would create a “duopoly” in sneakers and other athletic footwear between the merged companies and their next largest competitor, JD Sports.
“This is particularly concerning given that more than half of parents plan to sacrifice necessities, such as groceries, because of rising prices for back-to-school shopping,” Warren wrote, citing a July survey from Credit Karma. “Higher prices on athletic footwear could lead to further economic hardship for parents,” she continued.
Warren noted in her letter that Foot Locker and Dick’s currently compete with each other and with independent retailers to secure deals with suppliers.
“The new giant would have significantly increased power to extract favorable conditions with manufacturers,” she wrote. “This could mean that independent retailers are at a disadvantage when it comes to negotiating with suppliers, which could give Dick’s and Foot Locker an incentive to engage in anticompetitive conduct to restrict suppliers from dealing with independent retailers.”
