Monopoly Round-Up: Kroger-Albertsons Trial Starts Tomorrow

Over the next few weeks, big antitrust cases are in the courtroom. There’s the Kroger-Albertsons hearing starting tomorrow, and two trials for Google.

Matt Stoller

August 26, 2024

Today’s round-up for paid subscribers has lots of good stuff, as usual. But before I get to that, I want to preview a couple of legal actions starting this week. The first is the $24 billion Kroger-Albertsons supermarket merger trial, which starts tomorrow in Portland and goes until September 13th. The second is the Google adtech trial, which isn’t going to start for a few weeks, but has a sanctions hearing on Tuesday to see if Google’s general counsel Kent Walker gets held accountable for telling employees to auto-delete documents.

We’ll start with Kroger-Albertsons, which is technically a hearing for a preliminary injunction, but is mostly going to seem like a merger trial. Because of the importance of this case, and because Kamala Harris has made high food prices and pricing power a centerpiece of her campaign, it’s likely this trial will be widely reported. There is unfortunately no audio streaming, except for opening and closing statements, which you can listen to at 877-336-1831 tomorrow at noon ET. I might get some reporting from the courtroom for BIG.

So what are the stakes? The merging supermarket chains are two of the largest food buyers and sellers in the U.S., collectively owning a little over 5,000 stores (though they are planning to divest 579 stores where they overlap, to a distributor called C&S Wholesale Grocers.) If they win their case, then the entire food system will consolidate even further. If they lose, then consolidation stops, and the leaders of these corporations will be supremely embarrassed. Resignations often follow failed mergers.

To give you a sense of how important this deal is for the executives involved, so far the two companies have spent $864 million on merger costs alone, which is 3.5% of the total value, and enough for a $1200 bonus for each employee. Why is it so expensive? Well, partly because it’s taken two years of legal work, and the teams these firms have doing it are immense and well-paid.

Albertsons has a local law firm, plus D.C. powerhouses Williams & Connolly, Dechert, and Debevoise & Plimpton. Kroger also has a local attorney, and teams from Arnold and Porter and Weil Gotshal. Partners in these firms bill out at $2400/hour. It’s not all labor costs, of course, as one rumor is their legal team is staying at the Ritz in Portland, so some goes to lodging.

Kroger-Albertsons also faces a state merger trial in Washington and one in Colorado as well. If you want to read legal filings from the case, you can get most of them here for free.