Biden Antitrust Enforcers Set New Record for Merger Challenges

The Biden administration set a new record for merger enforcement activity, according to newly released data obtained by Bloomberg.

In an annual report to Congress set to be released this week, the US Federal Trade Commission said it brought 24 enforcement actions, while the Justice Department’s antitrust division brought 26 in the fiscal year ending Sept. 30, 2022, the most recent period for which that data is public. The total number of challenges is the highest since the US began requiring pre-merger antitrust review in 1976.

FTC Chair Lina Khan and Justice Department antitrust chief Jonathan Kanter had both promised more aggressive antitrust enforcement when they took office in 2021, saying increased concentration of corporate power had limited consumer choices and contributed to higher prices.

The FTC’s most recent win came Sunday, when Illumina Inc. said it will sell Grail Inc. after a US appeals court found that its $7 billion acquisition of the cancer detection startup violated antitrust laws. The announcement capped a long contentious battle with regulators in the US and the EU over the deal.

Earlier: Illumina Plans to Divest Grail After US Antitrust Ruling (2)

Under US law, companies doing deals valued at more than $111.4 million must notify the FTC and DOJ and wait 30 days before closing. The vast majority of mergers raise no concerns and are finalized after the initial waiting period expires. But the agencies can ask for additional information, triggering an in-depth probe of the deal. In 2022, the agencies asked for more information about 47 deals, with 26 of those valued at more than $1 billion.

The most serious enforcement actions become lawsuits. The FTC filed six of those last year, compared to an average of about three in the previous 20 years. The report didn’t break out how many cases the DOJ brought each year.

The stepped-up regulatory activity came amid a spike in transactions. There were 3,152 deals reported to the government in 2022 – the second highest number since 1976 and more than double the average filings in the previous decade. Nearly a fifth of those transactions were valued at more than $1 billion, according to Thursday’s report.

Biden’s antitrust officials have scotched some other high-profile deals before Illumina-Grail. The Justice Department successfully blocked Penguin Random House’s $2.18 billion buyout of publishing rival Simon & Schuster and unwound a partnership between American Airlines Group Inc. and JetBlue Airways Corp. On Dec. 11, Sanofi SA said it would drop plans to exclusively license a rare drug in development by Maze Therapeutics Inc. after the FTC filed suit.

There have also been setbacks. The Justice Department lost its bid to block UnitedHealth Group Inc. from buying health insurance exchange Change Healthcare Inc., and the FTC failed to stop Meta Platforms Inc. from acquiring a virtual-reality startup. The agency also lost a high-profile trial to bar Microsoft Corp. from buying Activision Blizzard Inc. in July, but continues to pursue the case.

The agencies are also pushing to revamp what information companies must turn over about proposed deals and a sweeping overhaul of rules the government uses to determine whether deals violate competition law.

To contact the reporter on this story:
Leah Nylen in Washington at lnylen2@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Anthony Lin

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