Toys 'R' Us hit by antitrust probe over pricing of baby products
Federal antitrust officials are as busy as they were when they were breaking up the old AT&T or looking at breaking up Microsoft (MSFT). The government is currently reviewing the proposed search joint venture between Yahoo! (YHOO) and Microsoft and examining IBM's (IBM) practices in the mainframe industry. Even the NFL is under the microscope.
And now, the Federal Trade Commission is after Toys 'R' Us.
According toThe Wall Street Journal, "The Federal Trade Commission is investigating whether the retail giant may have violated an 11-year-old FTC order to abstain from anticompetitive tactics." New charges might be leveled against the company because of its pricing practices on certain baby products such as high chairs and car seats. One of the issues is that Toys 'R' Us may have tried to get other retailers to raise prices.
A successful price-fixing case would hurt the toy chain financially as well as damage its reputation with consumers.
The Toys 'R' Us case raises an interesting question. Have the number of antitrust cases that the government is investigating increased since the Obama Administration took office? Or does it just seem that way? Democrats are known for being more zealous in their protection of consumer interests than Republicans are. Or, perhaps that is just an image built up over the years which no data actual support.
Whatever the reason, there are several large probes of anti-competitive practices against big American institutions going on now. And Toys 'R' Us is going to have some reputation problem this holiday season.
Douglas A. McIntyre is an editor at 24/7 Wall St.