FTC, DOJ launch inquiry into serial acquisitions, PESP responds
September 27, 2024
In May, the Federal Trade Commission (FTC) and the Justice Department’s (DOJ) Antitrust Division jointly launched a public inquiry regarding private equity serial acquisitions and roll-up strategies that have led to consolidation that has harmed competition.[1]
In a joint Request for Information, the agencies sought information from the public on serial acquisitions and roll-up strategies, which are corporate consolidation strategies that occur when a company becomes larger—and potentially dominant—by buying several smaller firms in the same or related business sectors or industries.
Private equity firms have engaged in roll-up strategies across a wide array of industries and markets. Often, businesses do not have to report these deals to the federal antitrust agencies, allowing firms to amass significant control over key products, services, or labor markets without antitrust scrutiny. Roll-up transactions can harm competition to the detriment of consumers, workers, and innovation across an entire industry or business sector.[2]
This RFI follows a March multiagency inquiry that sought to understand how certain health care market transactions by private equity firms and other corporations may increase consolidation and generate profits while threatening patients’ health, workers’ safety, quality of care, and affordable health care for patients and taxpayers.[3]
The Private Equity Stakeholder Project (PESP) submitted a comment letter in response to the roll-up transaction RFI. Serial acquisitions by private equity managers are of great concern to PESP due to their potential to limit competition, which ultimately harms consumers, patients, employees and other stakeholders.[4]
If you would like to know more about the FTC and DOJ’s RFI concerning serial acquisitions and rollups, or about PESP’s responsive comment letter, please contact PESP Policy Director, Chris Noble, at[email protected].
[1]https://www.ftc.gov/news-events/news/press-releases/2024/05/ftc-doj-seek-info-serial-acquisitions-roll-strategies-across-us-economy
[2]Id.
[3]Id.
[4]https://www.whitehouse.gov/cea/written-materials/2021/07/09/the-importance-of-competition-for-the-american-economy/#:~:text=Looking%20across%20these%20kinds%20of,the%20market%20was%20more%20competitive.&text=There%20is%20also%20growing%20evidence%20that%20market%20power%20negatively%20affects%20innovation
