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FTC Launches Inquiry Into Formula Shortage

  • On May 24th, the FTC launched an inquiry into the ongoing infant formula shortage and issued a solicitation for public comment with regards to the same. In a statement released along with the announcement of the inquiry, FTC Commissioner Lina Khan said, “While the [FTC] does not regulate the safety or manufacturing of the impacted products, it can take steps to address any anticompetitive, unfair, or deceptive acts or practices that have contributed to or are worsening this problem. The FTC can also examine the infant formula industry to identify the factors that created such a fragile market, where a single disruption at a single plant can jeopardize supply.”
  • Commissioner Khan identified four components to the inquiry. First, the FTC will investigate and pursue anyone who deceives, exploits, or scams American families trying to buy formula, particularly those who use online “bots” to automatically purchase and then resell formula at exorbitant prices. Second, it will investigate whether infant formula manufacturers and distributors are engaging in unlawful economic discrimination that may be limiting the availability of formula at certain retailers.
  • Third, the FTC will work with the USDA, the agency that administers the Special Supplemental Nutrition Program for Women, Infants, and Children (commonly known as the WIC Program), to identify the factors that contributed to the shortage or hampered an effective response. Fourth, the FTC will use the lessons learned from this incident to inform its enforcement and policy work in other industries.
  • Comments should be submitted to regulations.gov and must be received no later than Friday, June 24, 2022 by 11:59pm ET.