November 19, 2021
What Happened: President Biden requested (again) that the Federal Trade Commission take a look at whether rising gas prices in the US are a result of illegal anticompetitive conduct.
The Bottom Line: This increases the likelihood of antitrust investigations that could affect clients in the oil and gas space.
The Full Story:
In a November 17 letter to Federal Trade Commission (“FTC”) Chair Lina Khan, President Biden asked the FTC to investigate the divergence between oil prices and the cost of gasoline at the pump, referencing his September 2021 request. Biden credited Khan’s decision to “strengthen oversight of mergers in the oil and gas sector,” but asked Khan to do more to clamp down on what the President claims is “anti-consumer behavior by oil and gas companies.” Biden specifically referenced the fact that in the last month, “the price of unfinished gasoline is down more than 5 percent while gas prices at the pump are up 3 percent.”
As mentioned in our September Client Alert, Biden is not the first president to address rising gas prices. Prior administrations under Presidents Obama, George W. Bush, and Clinton all made similar requests of the FTC.
With gasoline prices now over $3.00/gallon nationwide, the timing of Biden’s letter—a week before the Thanksgiving holiday—puts even more pressure on the FTC to open antitrust investigations in the oil and gas sector.
FTC antitrust investigations of this sort necessarily involve the collection of information from a broad range of industry participants, including targets of investigations as well as third parties, and can often be burdensome and costly. Hunton’s antitrust team, comprised of former FTC officials, has deep experience negotiating and complying with agency requests.