TPA Slams FTC’s Foolish Investigation of Subway Deal, Progressive Attacks on So-Called ‘Sandwich Shop Monopoly’

For Immediate Release

Contact: Kara Zupkus, 224-456-0257

WASHINGTON, D.C. – The Federal Trade Commission (FTC) is reportedly investigating the acquisition of Subway by Roark Capital, a private equity firm that already owns Jimmy John’s and Arby’s, among others. People familiar with the matter say that regulators fear the $10 billion merger will lead to consolidation within the fast-food industry. Sen. Elizabeth Warren (D-Mass.) — always quick to endorse poorly conceived government interventions — endorsed the investigation on X (Twitter), citing the merger’s potential to create “a sandwich shop monopoly.”

The Taxpayers Protection Alliance’s Executive Director Patrick Hedger provided the following comments:

“When Lina Khan and Elizabeth Warren agree, you know you’re in for trouble. The FTC’s facially ridiculous hypothesis that this deal could create a sandwich shop monopoly not only ignores every principle of sound economics, but also calls the agency’s larger judgment into question. These questions are particularly important as the FTC’s current Democratic majority tries to convince courts and the American public to adopt novel, interventionist antitrust theories. In cases involving industries such as cutting-edge cancer screening and online marketplaces, the FTC has been able to hide its ideological agenda behind a smokescreen of pseudo-economics. This is impossible in the case of the Subway acquisition, which directly affects an industry that most Americans know from their own personal experience to be incredibly competitive. This is a wake-up call that none of the current FTC’s novel theories of competitive harms should be accepted without close scrutiny.

“This investigation highlights the contradictions that are at the core of the FTC’s current crusade and of Bidenomics generally. Time and time again, we see that the right hand neither knows nor understands what the left hand is doing. While the FTC frets about consolidation in the fast-food industry, President Biden’s administration is attempting to rework the definition of ‘joint employer status’ in a way that would cripple smaller restaurants seeking to compete with the largest giants. Similarly, Chair Khan recently advocated antitrust as a means to decrease foreign influence in American markets, but she has pursued cases that would prevent American firms from competing internationally and has actively assisted Europe’s implementation of the Digital Markets Act, a transparently anti-American regulatory regime. The FTC also seems to be preparing a challenge to the merger between Albertson’s and Kroger, a deal that would, if allowed to stand, promote competition with Amazon, subject of multiple questionable FTC actions itself.

“Sen. Warren’s fear mongering about private equity, which the FTC has also engaged in, is equally unfortunate. Although often not understood, private equity’s economic purpose is simple; investment firms transfer resources from low-valued uses to high-valued ones, generating economic growth, jobs, and innovation. Policy makers should avoid invoking ‘private equity’ as a populist scare tactic as Warren did, as it is economically ignorant and demagogic.”