(Daily360.com) – A United States senator is asking questions about a possible sandwich shop monopoly in America. The private equity firm Roark Capital recently bought Subway, the sandwich chain, for $10 billion. Democrat Senator Elizabeth Warren of Massachusetts believes the purchase, which she calls a “sandwich shop monopoly,” may be a violation of antitrust laws. The group’s portfolio already includes Jimmy John’s, Arby’s, Schlotzky’s and McAlister’s Deli.
Warren is concerned that Roark is cornering the sandwich chain market and that could lead to higher prices for consumers. The Federal Trade Commission (FTC) is said to be looking into the acquisition and potential monopoly issues with it.
Warren has a history of going after business deals she views as monopolistic. She once went after Amazon’s line of ‘basics,’ including phone chargers. Critics said Warren’s actions with Amazon would likely lead to an increase in prices consumers would pay for these items. Critics of her statements about Roark say it will likely be more of the same and they don’t see the buy as creating a monopoly.
Critics further assail Warren’s comments as being short-sighted. They say that a sandwich is a relatively basic meal that can be bought at any number of places. The Roark companies don’t have a monopoly on any particular sandwich element and competition overall remains robust. They say the monopoly regulations and antitrust laws are meant to stop businesses from completely cornering a market with no competition, and to prevent price-gouging of consumers who have no alternatives to a particular good or service.
The definition of a monopoly under US law seems to be at odds with Warren’s position regarding Roark; there is a array of other types of eateries competing for the dollars of hungry consumers. For example, a consumer may choose a burger or a taco over a sandwich if they so desire.
With the food-making market as competitive as it is, analysts say that should Roark try to raise prices, consumers more than likely opt for cheaper alternatives that are readily available.
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