Natural Foods Merchandiser

U.S. senators criticize FTC's new rules in Whole Foods case

Eight senators sent a letter to the Federal Trade Commission last week expressing concern that the agency's recently proposed rule changes to the procedure it uses to investigate antitrust cases are unfair and should be reconsidered.

The senators expressed complaints similar to the ones filed by Whole Foods Market in October. The natural supermarket chain has been embroiled in an antitrust battle with the FTC ever since the company's 2007 merger with rival grocer Wild Oats.

"We are concerned that [the proposed rule changes] may fall short of the standard of prudence with which the FTC ought to wield its considerable power," said the senators in a letter dated Dec. 12, which did not mention any specific cases by name.

The FTC did not immediately return a phone call seeking comment.

In October, the FTC laid out a new series of proposed rules to the procedures it uses to prosecute antitrust cases and gave the public 30 days to comment. Among the changes was a regulation that would give the FTC authority to rule over certain prehearing motions currently overseen by administrative law judges. At the time, Whole Foods said this change would make any appearance of judicial independence "illusory." The senators also had concerns:

"Under the proposed changes, a defendant wishing to dispose of an FTC matter before trial would have no recourse but to plead its motion for dismissal or summary judgment before the very same Commissioners who have already decided that there is sufficient evidence to bring the matter," the letter said. "The opportunity for an administrative law judge to independently review Commissioners' decisions is a feature, not a flaw, of the present system."

The letter called the 30-day public comment period the FTC allowed for the changes "abbreviated" and noted that "less significant rules changes in the past have been made only after significantly longer and more robust public comment periods."

Whole Foods' complaint called the 30-day period "wholly inadequate to deal with changes in the number and of the magnitude proposed."

The senators asked the FTC to re-open the comment period.

Democrats Tom Harkin of Iowa, Patrick Leahy of Vermont, Dianne Feinstein of California, Charles Schumer of New York, Bill Nelson of Florida, and Benjamin Cardin of Maryland signed the letter. Republicans Arlen Specter of Pennsylvania and John Cornyn of Texas also signed the letter.

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