- Antitrust regulators said Tuesday they are looking to modernize merger guidelines in an effort to crack down on tie-ups amid a flood of merger filings that has more than doubled in the past year.
- Leaders of the Federal Trade Commission and Department of Justice are launching a review of the current guidelines that are used to detect and analyze potentially unlawful mergers. Those policing guidelines have not been updated in 12 years, potentially excluding realities of a modern economy, leaders said.
- To bring the guidelines up to date, the FTC and DOJ are calling on the public to submit information and new evidence, about the potential effects of mergers so the agencies can ultimately beef up tools to block anticompetitive deals.
The news sparked reaction and headlines about an attempt by regulators to target big tech, but it could have serious implications for the healthcare sector for years to come.
The announcement tees up the start of a process that could ultimately change how mergers are policed for years to come, Jim Burns, an antitrust attorney and member with law firm Dykema, said.
"What this announcement categorically demonstrates is that interest in changing merger analysis is real. Change is coming. Mergers in healthcare, and in every industry, are going to be getting a much more careful and much more thorough review than they might have in the past," Burns said.
Regulators are specifically interested in obtaining feedback on a handful of areas, and not just from research experts. The agencies are calling on unions, employees, farmers, franchisees and consumers to submit feedback.
The areas of interest, and one in particular, may signal a potential shift away from the arguments around healthcare prices that enforcers have used to challenge hospital deals in the past.
The FTC has long leaned on the argument that in certain healthcare mergers, patients will face steeper prices. In its RFI, regulators are asking for more information about mergers' effects on labor markets, a line of inquiry that has gained greater traction at the agency.
The FTC previously signaled nurses' wages in particular will become an important measure in antitrust enforcement when it sent a letter to Texas regulators in 2020, warning them that allowing a hospital to acquire its only competitor in West Texas would result in muted wage growth for nurses. The agency did not mention nurses' wages in a similar letter sent to Tennessee regulators a few years before. (The Texas deal was shielded from federal antitrust enforcement due to Certificates of Public Advantage legislation.)
In Tuesday's press conference, agency representatives acknowledged they have become increasingly focused on labor market issues, and believe the merger guidelines should reflect that.
The guidelines are an important policing tool as the courts look to them for direction on whether a tie-up is unlawful.
Furthering underscoring the importance, second requests by the agency of merging parties have increasingly included issues around labor markets, adding to the time and complexity of the review and posing challenges for the merging entities, Burns said.
It's just the latest step in the Biden administration's attempt to get tough on anticompetitive deals.
Biden issued an executive order last summer calling on regulators "to enforce the antitrust laws vigorously," and he called out healthcare, specifically, as an area lacking competition which can result in harmful effects for patients.