FTC and DOJ Seek Public Help Identifying “Serial Acquisition Strategy” Targets

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 businesses using “roll up” strategies to consolidate competitors and reduce competition across the U.S. economy. Previously, the agencies had primarily focused their efforts on the healthcare industry, but this latest joint Request for Information invites members of the public to submit “examples” of companies using a “serial acquisition strategy,” including “a pattern of buying up competing firms,” without regard to the market or industry where those firms compete. 

Previous Enforcement Efforts Limited to Healthcare Industry

The  May 23 Request for Information is the latest in a series of interagency efforts to identify businesses employing “roll up” strategies that could potentially restrain competition.  In a March 2024 Request for Information, the FTC, DOJ, and U.S. Department of Health and Human Services (“HHS”) sought public comment on deals involving healthcare providers, facilities, or ancillary products or services and their impact on competition in the healthcare industry. The FTC, DOJ, and HHS followed that request the following month with the launch of an online reporting portal, HealthyCompetition.gov, for the public to report potentially unfair and anticompetitive healthcare practices.

The FTC has been aggressive in pursuing litigation against serial acquisition strategies in the healthcare industry, as well.  In FTC v. U.S. Anesthesia Partners, Inc., a lawsuit filed in September 2023,  the FTC challenged an alleged scheme by a private equity firm and an entity it controlled to monopolize the anesthesiology market in Texas, including by executing a roll-up scheme to consolidate large anesthesia practices in Texas and driving up prices through agreements with remaining independent practices. The court in that case recently dismissed claims against the private equity firm, but held the FTC could pursue efforts to enjoin the controlled entity from engaging in anticompetitive conduct, including through potential “structural” remedies.

Latest Request for Information Significantly Expands Scope

The May 23 Request for Information is not limited to the healthcare industry, but seeks public comment on any “serial acquisition strategy” employed by any company to restrain competition anywhere in the U.S. economy, without regard to market or industry.  The request echoes skepticism expressed by the agencies in their recently-released 2023 Merger Guidelines toward “multiple mergers at once or in succession by different players in the same industry.” The FTC and DOJ warned in the guidelines that in those cases, the agencies “may examine multiple deals in light of the combined trend toward concentration,” and relying on a 1963 U.S. Supreme Court decision, announced that a merger that creates a firm with a market share of as little as 30% could be presumed to substantially lessen competition in certain circumstances.

 The May 23 Request for Information seeks input from across the spectrum—consumers, businesses, advocacy organizations, professional and trade associations, elected officials, and academics—and invites them to identify specific “examples” of companies using “serial acquisition strategies” and describe the effect those strategies are having on competition.  Members of the public have 60 days, and no later than July 22, 2024, to make submissions to Regulations.gov, and those inputs will be posted to the site. Comments submitted in response to the May 23 Request for Information may inform the government’s enforcement priorities and future actions across the U.S. economy in markets and industries far beyond healthcare.