June 24, 2024
Antitrust: The DOJ & FTC Invite the Public to “Drop a Dime” on Roll-Ups
The DOJ and FTC are extending a cordial invitation to the public to drop a dime on “serial acquirers” whose deals may have harmed competition. This Morrison & Foerster memo explains the initiative:
On May 23, 2024, the Federal Trade Commission (“FTC”) and the Department of Justice (“DOJ”) Antitrust Division announced a Request for Information (“RFI”) seeking information from the public to “identify serial acquisitions and roll-up strategies throughout the economy that have led to consolidation that has harmed competition.”
This is the latest action by the Biden administration to enforce against corporate consolidation more aggressively. The FTC and DOJ claim that serial acquisitions are particularly troublesome because a company can become “larger” and “potentially dominant” through a series of smaller acquisitions that fall below the Hart-Scott-Rodino (“HSR”) thresholds and therefore are not subject to pre-closing agency review or oversight. According to the FTC, through these smaller deals, firms can “amass significant control over key products, key services, and/or labor.”
The memo notes that the agencies’ focus on serial acquisitions is not new, and that, among other things, the new Merger Guidelines and changes to the HSR filing process illustrate their concern with roll-up strategies. The memo discusses several recent enforcement actions targeting private equity roll-ups and notes that the results of this initiative could lead to a variety of new actions by the antitrust agencies. It advises serial acquirers to keep tabs on the public responses to this RFI, which will be available on the Regulations.gov website.
– John Jenkins