The Biden administration's Federal Trade Commission (FTC) has used its regulatory authority on numerous occasions in recent years to challenge proposed mergers and acquisitions.
The FTC's Bureau of Competition is responsible for enforcing antitrust laws and examines proposed mergers and acquisitions that it believes may have a negative impact on consumers due to businesses buying up their competition.
When the agency believes a merger or acquisition will undermine competition in the marketplace, it can investigate the pending deal which may result in companies revising the terms to address concerns raised, or file suit to halt the merger. It also works with the Justice Department on investigating and litigating proposed mergers.
"The FTC is committed to fully enforcing the nation’s antitrust laws by using the tools Congress gave the Commission to block anticompetitive mergers that threaten free and fair competition," an FTC spokesperson told FOX Business. "Mergers or acquisitions can pose competition concerns in a variety of ways, either by seeking to stifle innovation, raise prices, deny rivals access to a product or service, or degrade quality, all of which can harm consumers, workers, and emerging businesses."
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The FTC's efforts to investigate and challenge proposed mergers have prompted criticism from industry, with companies arguing that they can help smaller companies better compete in the global economy and that challenges by regulators can undermine innovation and incentives for entrepreneurs to pursue the acquisition of their companies.
Here's a look at some of the notable mergers and acquisitions the FTC has investigated or sued to block in recent years:
Grocery store chain Kroger announced in Oct. 2022 that it would acquire Albertsons for $24.6 billion – the largest supermarket merger in U.S. history. The companies later announced plans to sell more than 500 of their stores to C&S Wholesale to address regulatory concerns and give those locations an opportunity to continue to operate.
The FTC filed a lawsuit in Feb. 2024 to block the proposed merger, arguing that it would eliminate the competition between the two supermarket giants and result in higher prices for consumers and undercut demand for workers.
The dispute is currently pending in federal court.
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Tech giant Microsoft announced in Jan. 2022 that it reached a $68.7 billion deal to acquire video game studio Activision Blizzard, which develops the Call of Duty franchise, in the largest proposed merger in the history of the video game industry.
The FTC filed suit to block the merger in Dec. 2022, alleging it would let Microsoft stifle competition from video game platforms that rival Microsoft's Xbox by denying them access to the popular video game franchise.
In July 2023, a federal judge in the Northern District of California denied the FTC's request that the merger be blocked, which allowed the merger to proceed.
The deal closed in Oct. 2023, although the FTC filed an appeal with the Ninth Circuit Court of Appeals in December that remains pending.
FTC SUES TO BLOCK $4B MERGER OF MATTRESS FIRMS
Mattress maker Tempur Sealy announced a deal to buy retailer Mattress Firm for $4 billion in May 2023.
In June 2024, the FTC announced that it will file a lawsuit over concerns that it would undermine competition with rivals Serta Simmons Bedding and Purple Innovation by cutting off their access to the market, while raising prices and lowering product quality for consumers.
Mattress Firm told FOX Business last month that it "continues to believe the transaction with Tempur Sealy will be beneficial to consumers and employees as well as the overall bedding and furniture industry," adding it will continue to offer both Tempur Sealy and non-Tempur Sealy branded products.
Tempur Sealy said on investor call this week that it believes the merger is "consistent with the law" and that it believes a "successful litigation process can be completed in the coming months" so that the transaction can close in late 2024 or early 2025.
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Tapestry, the parent company of Coach and Kate Spade brands, announced in Aug. 2023 that it would acquire Capri, which owns the Michael Kors brand, in a deal valued at $8.5 billion that would bring several luxury brands under one company.
The FTC sued to block the acquisition in April 2024, arguing that the merger would "deprive millions of American consumers of the benefits of Tapestry and Capri's head-to-head competition," citing prices, discounts and promotions, designs, marketing and advertising as areas in which the two companies compete.
The case is expected to go to court this September.
AMAZON TERMINATES IROBOT ACQUISITION DUE TO REGULATORY HURDLES
Tech giant Amazon announced in Aug. 2022 that it would acquire robotics firm iRobot in a $1.4 billion deal that faced scrutiny from U.S. and European regulators.
The FTC investigated the proposed merger amid concerns about Amazon's growing market power. Although it didn't file a lawsuit, Amazon and iRobot announced that they would terminate the merger in Jan. 2024 in the face of regulatory scrutiny.
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"Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren't subject to the same regulatory requirements in fast-moving technology segments like robotics," Amazon general counsel David Zapolsky said in announcing the termination of the merger.
"Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition – the very things that regulators say they're trying to protect," Zapolsky added.
