Free market isn't free

This is why I laugh sardonically when people try to tell me the "free market" is a boon for consumers. There is no free market. Under this administration, the FTC operates as a corporate welfare program. Take for instance the agency's latest ruling on Whole Foods.

The FTC is blocking a merger between Whole Foods and another major organic goods purveyor.

Then, it's a budding monopoly, or so says the Federal Trade Commission, which contends Whole Foods doesn't face that much competition from the mainstream grocery stores. The FTC made that case in saying Whole Foods shouldn't be allowed to buy Wild Oats Markets (OATS, news, msgs), another organic-grocery player, because that would give Whole Foods too much power in this little corner of the retail world.

The problem for Whole Foods is that purchasing Wild Oats was a big piece of its strategy to grab market share and combat competition from the mainstream grocery chains -- you know, the competition that supposedly doesn't exist. That's why news of the FTC's desire to block the merger shaved an additional 7% off Whole Foods' stock price last week.

What a steaming crock. There's not a major grocery store in America that doesn't offer at least some organic items and most chains devote a significant section of their store to such goods. Whole Foods is a minor player in the gorcery industry. They worked hard to build their brand and now the traditional grocers are riding on their coattails, exploiting the market that Whole Foods developed. A look at the FTC's previous rulings makes it clear they're only concerned about protecting the biggest players.

There are several other odd aspects to this case. For one thing, under the administration of George W. Bush, antitrust authorities in the FTC and the Department of Justice have been relatively easy on mergers.

They did nothing to contest last year's marriage of Whirlpool and Maytag, then the top two rivals in household appliances. So far, there's been no opposition to the proposed merger of Sirius Satellite Radio and XM Satellite Radio. What's more, the FTC recently lost two attempts to block mergers in the energy sector.

Free market proponents would like you to believe that consumers dictate the choices and ultimate success of a business. If the market were truly free, that would probably be true. However, when the government actively protects the largest corporations from competition, the only thing free about it the free ride the mega-corps get from the FTC's actions and inactions.

It would be interesting to see how the rulings correlate between the corporations in question and their campaign donations to the GOP. One suspects there's a nexus.