- A record-breaking 3,520 transactions went through antitrust review in fiscal year 2021, a 115% increase from 1,637 in fiscal 2020, a joint report from the Federal Trade Commission and the antitrust division of the Department of Justice says.
- Sixty-five of these Hart-Scott-Rodino (HSR) reviews, named for the 1976 law that created them, went through a document-intensive second review process, and 32 resulted in an enforcement action, 18 from the FTC and 14 from DOJ.
- The “astronomical” increase in filings that led to the reviews demonstrates the need for Congress to step in with more funding and to give agencies more review time, Commissioner Rebecca Kelly Slaughter said in a statement that was joined by FTC Chair Lina Khan and another commissioner, Alvaro Bedoya.
The agency’s capacity issues are a problem of the FTC’s own making, FTC Commissioner Christine Wilson said in a separate statement.
Among other things, the agency took a number of steps that introduced volatility into the process.
“This Administration has taken many steps to appear tough — while merger enforcement numbers plummet,” said Wilson, a frequent critic of the agency’s leadership.
Wilson didn’t identify all the problems the agency created, but in a step late last year that she dissented from, the FTC passed a resolution lowering the threshold under which filings were subject to automatic review.
Khan and others who supported the change said the lower threshold is needed because companies were manipulating debt levels and taking other steps to put their deals under the $101-million deal-size threshold.
Wilson argued the change wasn’t necessary because if a deal raised concerns, the agency had authority to put them under review even if they were below the threshold.
The FTC already has “longstanding and well-functioning (and perfectly expeditious) Commission procedures,” Wilson said at the time in a statement that another commissioner, Noah Joshua Phillips, joined her in.
Filings and reviews
President Biden made antitrust a priority when he took office in early 2021 and the surge in reviews is consistent with his intent to look more closely at deals.
Driving the jump in reviews is an equally big jump in filings, which reached 7,002 in fiscal 2021, up from 3,249 the previous year.
Although the report doesn’t make the connection, more filings would be subject to automatic review under the lower threshold the agency approved last year along with other changes the agency made.
Of the FTC’s 18 enforcement actions, five involved issuance of a final consent order, seven led to abandonment or restructuring of the deal and six ended in litigation.
Of the DOJ’s 14 actions, nine involved issuance of a final consent order, three led to restructuring and two led to litigation.
In a high-profile FTC case, the agency sought a preliminary injunction against the merger of Procter & Gamble (pictured above) and Billie, a consumer products company. The deal was abandoned after the FTC alleged P&G was trying to buy the company because it was shaping up to be a major competitor in the women’s razor market.
In a big DOJ case, the agency challenged Visa’s effort to buy Plaid, the digital payments company. The deal was abandoned after the agency alleged Visa was trying to head off the competitive threat the company posed with its plan to offer an online debit product.
Despite the surge in filings and reviews, the number of second reviews and enforcement actions didn’t go up appreciably.
“The rampant mismanagement shown by [FTC] leadership is concerning and warrants caution before throwing more resources at the problem,” Wilson said in her statement.