Senator Warren Urges Regulators to Block Dick’s-Foot Locker Merger, Citing “Duopoly” Fears and Price Risks
WASHINGTON – Senator Elizabeth Warren is calling on federal regulators to block the proposed $2.4 billion acquisition of Foot Locker by Dick’s Sporting Goods, arguing the deal could harm consumers, eliminate jobs, and create a near-duopoly in the athletic footwear market.
In a letter sent Tuesday to the Federal Trade Commission (FTC) and the Department of Justice (DOJ), Sen. Warren (D-Mass.) urged the agencies to “closely scrutinize” the merger and “block the deal” if it is found to violate antitrust laws.
Warren’s primary concern, detailed in the letter viewed by CNBC, is that the merger would drastically reduce competition. The combined entity would become a dominant force, leaving Britain’s JD Sports as its only major competitor in the specialty athletic shoe store sector.
The senator highlighted the potential impact on American families, particularly as they face rising costs. “This is particularly concerning given that more than half of parents ‘plan to sacrifice necessities, such as groceries,’ because of rising prices for back-to-school shopping,” Warren wrote, referencing a recent Credit Karma survey. “Higher prices on athletic footwear could lead to further economic hardship for parents.”
The letter points to a rapidly consolidating industry. JD Sports has aggressively expanded its U.S. footprint since 2018, acquiring competitors like Finish Line, Shoe Palace, DTLR, and Hibbett. If the Dick’s-Foot Locker merger proceeds, the two resulting giants would control approximately 5,000 athletic shoe stores nationwide.
This concentration of power, Warren argues, could squeeze out smaller, independent retailers. “Dick’s and Foot Locker currently compete with each other and with independent retailers to secure deals with suppliers,” she wrote. “The new giant would have significantly increased power to extract favorable conditions with manufacturers.” This could put independent stores at a significant disadvantage and potentially lead to anticompetitive practices.
The call for scrutiny comes during a period of transition for federal antitrust enforcement. Under President Joe Biden, the FTC adopted an aggressive stance, successfully blocking high-profile deals such as Tapestry’s acquisition of Capri and Kroger’s bid for Albertson’s. While the new Trump administration was expected to be more merger-friendly, its approach to the retail sector remains unclear. The administration has already approved the Nippon Steel acquisition of U.S. Steel, a deal previously blocked under Biden.
However, some antitrust experts believe the merger will ultimately be approved. Amanda Lewis, a partner at Cuneo Gilbert and LaDuca and a former FTC merger official, told CNBC that the deal is unlikely to trigger major alarms. She noted that the combined market share of Dick’s and Foot Locker would be around 15% of the sporting goods market.
“Usually below 30% doesn’t raise too many agency red flags,” Lewis said. She anticipates the merger will be approved, possibly with a condition that Dick’s divest a limited number of stores to preserve competition in certain local markets.
The FTC declined to comment on the matter. The Department of Justice did not respond to a request for comment.
