The Federal Trade Commission accused Albertsons executives of willfully destroying text messages in the early days of its investigation into the $24.6 billion Kroger, Albertsons merger.
The FTC said in a court document filed on Aug. 16 that four days after Kroger and Albertsons notified federal regulators that they intended to merge on Nov. 3, 2022, the FTC informed the companies that it was launching an investigation into the proposal.
The FTC “specifically requested that ‘pending completion of this investigation, please cease all document destruction activities with respect to matters that may be of relevance to this investigation,’ including ‘the proposed transaction,’ and ‘the competitiveness of’ Albertsons,” according to the court filing.
Four Albertsons executives who will appear before a district court judge in Portland, Ore., on Aug. 26 “failed to preserve responsive text messages after receiving a preservation hold and numerous reminders,” the FTC claimed.
Neither Kroger nor Albertsons could be immediately reached for comment.
Those include Albertsons’ CEO Vivek Sankaran, Colorado Division President Todd Broderick, Pacific Northwest Division President Carl Huntington, and VP of Customer and Market Intelligence Lisa Kinney.
Federal regulators noted that one conversation “reveals one Albertsons executive’s assessment that the merger will likely increase prices.”
The FTC is now asking the court to take these deleted conversations into consideration and draw an “adverse inference” in court.
One ofthe deleted message threads central to the court filing took place between Broderick and an unknown person, whose text messages were deleted, the court filing stated.
Albertsons responded to the allegation on Nov. 7, 2023, saying that Broderick’s “apparent one-sided conversations were not on his iPhone” and that “this may have been because of settings on the iPhone that automatically delete files after a period of time.”
The court document also revealed that Albertsons responded to requests from the FTC on the missing messages on Jan. 17,, noting the company was able to retrieve 70 text messages from the phone of Albertsons CEO Sankaran.
“Albertsons’ executives’ claimed use of an “auto-delete” feature does not change the analysis. Courts have found that an employer’s failure to automatically preserve communications—i.e., an employer’s decision to give individual employees discretion to decide how and what to preserve—is sufficient to show willful destruction of evidence,” the FTC said in the court filing.