On Tuesday, the Federal Trade Commission (FTC) launched an inquiry into the ongoing shortage of infant formula affecting the United States. According to the press release announcing the inquiry, the inquiry seeks information about the nature and prevalence of any deceptive, fraudulent or otherwise unfair business practices aimed at taking advantage of families during this shortage, and the factors that have led to concentration in the infant formula market and the fragility of its supply chains.
In the inquiry, the FTC seeks public comments about various factors that may have contributed to the infant formula shortage during the recall of certain Abbott formula products beginning in February 2022, as well as its impact on families and retailers. Additionally, the inquiry seeks public input on whether the FTC or other state or federal agencies may have inadvertently taken steps that contributed to fragile supply chains in the infant formula market.
The press release states that the FTC will also examine the pattern of mergers and acquisitions in the infant formula market to better understand the market’s current concentration and how merger review should be conducted in the future. Additionally, the FTC pledges to investigate the long-term causes of the current crisis and apply any lessons to prevent future shortages in similar industries.
In the press release, the FTC states that it will work with the USDA to analyze the results of the public inquiry to help determine what policy changes might be necessary to reduce concentration in the market and prevent future shortages. This inquiry by the FTC follows an announcement by the FDA on May 10, 2022, stating that it will be taking steps to improve the supply of infant and specialty formula products amid the shortages.
The FTC Chair, Lina M. Khan, states that the infant formula shortage has caused “enormous anxiety, fear, and financial burden for American families,” and states that the inquiry is an attempt to alleviate those anxieties, fears and burdens, and find the source and causes of the current crises. The FTC states that public comments must be received no later than Friday, June 24, 2022 by 11:59pm ET and should be submitted to regulations.gov.
