The FTC and DOJ are seeking public assistance in defining the goals of a “serial acquisition strategy.”

The Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice (“DOJ”) announced on Thursday, May 23 that they are expanding their search for companies that use roll-up strategies to consolidate competitors and reduce competition throughout the U.S. economy. Previously, the agencies focused their efforts primarily on the health care industry, but in the latest joint request for information, citizens are encouraged to submit “examples” of companies using a “serial acquisition strategy,” including a “pattern of buying out competing companies,” regardless of market or industry. in which these companies compete.

Previous enforcement efforts have been limited to the health care industry

The May 23 request for information is the latest in a series of interagency efforts to identify companies using roll-up strategies that could potentially reduce competition. In a March 2024 information request, the FTC, the Department of Justice, and the U.S. Department of Health and Human Services (“HHS”) requested public information on contracts involving health care providers, facilities, or ancillary products or services and their impact on competition in the healthcare industry. The following month, the FTC, the Department of Justice, and HHS complied with this request by launching the online reporting portal HealthyCompetition.gov, which the public can use to report potentially unfair and anticompetitive health care practices.

The FTC is aggressively prosecuting serial takeover strategies in the health care industry as well. In FTC v. US Anesthesia Partners, Inc., a lawsuit filed in September 2023, the FTC challenged an alleged plan by a private equity firm and an entity it controlled to monopolize the anesthesia market in Texas, including through the implementation of a roll-up program to consolidate large anesthesia practices in Texas and raise prices through agreements with other independent practices. The court in this case recently dismissed claims against the private equity firm but held that the FTC could pursue efforts to prohibit the controlled entity from engaging in anticompetitive behavior, including through potential “structural” measures.

The latest information request expands the scope significantly

The May 23 request for information is not limited to the health care industry, but seeks public comment on any “serial acquisition strategies” used by any company to reduce competition anywhere in the U.S. economy, regardless of market or industry. The proposal reflects the skepticism expressed by the agencies in the recently published 2023 Merger Guidelines regarding “multiple mergers simultaneously or sequentially by different players in the same industry.” The FTC and the Department of Justice warned in guidance that in such cases, the agencies “may examine multiple transactions in light of the aggregate tendency to concentrate” and, relying on a 1963 U.S. Supreme Court decision, announced that a merger that creates a company with it can be assumed that in some circumstances a market share of just 30% will significantly reduce competition.

The May 23 request for information seeks information from all parties – consumers, businesses, advocacy organizations, professional and industry associations, elected officials and academics – and encourages them to identify specific “examples” of companies using “series acquisition strategies” and describe the impact these strategies have on competition. Citizens have 60 days, but no later than July 22, 2024, to submit reports to Regulation.gov and the data entered will be published on the website. The comments submitted in response to a May 23 request for information could help inform the government’s enforcement priorities and future actions across the U.S. economy in markets and industries that extend well beyond health care.