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FTC Launches Probe Into Supply Chain Crisis

FTC Launches Probe Into Supply Chain Crisis

Supply chain delays are wreaking havoc on small businesses and have led the federal government to launch investigations into large corporations to uncover the root cause of the crisis, according to The Washington Post. The Federal Trade Commission (FTC) ordered a total of nine companies, including Amazon, Walmart, and Procter & Gamble, to hand over extensive supply chain related documents, including profit margins and information on how they select suppliers. They have 45 days to provide their internal paperwork.

The probe is not expected to improve current supply chain issues, but it could shape future regulations.

President Joe Biden also held a meeting with major corporate executives to discuss supply chain disruptions. The Biden administration is particularly concerned about how the crisis will exacerbate existing holiday season stressors.

Analysts cite a lack of supply chain competition as a contributing factor to recent inflation. Biden issued an executive order last summer demanding that regulators clamp down on mergers in the shipping and freight rail industries.

“We’ve had an incredible amount of consolidation in the supply chain…That’s why it’s been unable to withstand the kind of shock we’ve seen with the pandemic,” Diana Moss, president of the American Antitrust Institute, said. “We are now learning the hard way what 40 years of unbridled consolidation and lax merger enforcement mean.”

Smaller companies are bearing the brunt of supply chain disruptions. Shipment delays due to crowded ports have forced many of them to get creative with their merchandise and raw material sourcing. “The more control you have over your own supply chain, the better,” Scott Paul, president of the Alliance for American Manufacturing, said.

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