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Friday, May 24, 2024

FTC Colluded w/ Foreign Governments to Challenge Mergers, Records Suggest

'If the FTC doesn’t believe its coordination with foreign officials is improper, why hide it?'

(Ken Silva, Headline USAFederal Trade Commission officials may have colluded with foreign regulators to block corporate mergers and acquisitions, according to internal FTC records released Thursday by the U.S. Chamber of Commerce.

The FTC records, which the Chamber of Commerce obtained through the Freedom of Information Act, detail the commission’s deliberations about biotech company Illumina’s plan to acquire Grail, a startup that specializes in cancer blood-testing.

Illumina announced its planned $8 billion acquisition in September 2020, and FTC officials began corresponding with competition regulators in the U.K, EU, Austria and France about the deal soon thereafter, records show.

The contents of the correspondence are heavily redacted, but the Chamber of Commerce argued that the timing of certain events strongly suggests that the FTC was talking with those regulators about how to block the deal.

In a press release about the records, the Chamber of Commerce noted that FTC initially challenged the deal in U.S. federal court, but “many public experts” predicted that the commission’s challenge would fail.

So instead, the FTC apparently turned to its counterpart in the EU to block the deal. The EU announced its intention to challenge the acquisition in April 2021, and a month later the FTC dismissed its own federal court challenge.

Illumina closed the deal in December 2021, but the acquisition is still uncertain. The Chamber of Commerce said the FTC could still sue to unwind the deal, and that the EU regulators are also still trying to block it.

The Chamber of Commerce said the FTC’s apparent collusion with foreign regulators is highly inappropriate for numerous reasons.

“Mergers are intensely fact specific to the transaction, and the competitive impact in the U.S. will be different than in foreign markets,” the Chamber said. “In the Illumina-Grail transaction, Grail has no business operations and generated no revenues from within the EU. Yet the European Commission decided to upend international norms by manufacturing a reason … to review [the deal].”

The Chamber further noted that the FTC heavily redacted the records it released on the grounds that the EU served as a “consultant,” which makes communications exempt under FOIA’s  “consultant corollary doctrine.”

The Chamber said it will be challenging the FTC’s redactions to fully reveal what commission officials were saying to their counterparts in the other jurisdictions.

The Wall Street Journal published an editorial Thursday about the Chamber’s disclosures, calling for the FTC to release the unredacted communications.

“The emails raise questions about the FTC’s methods, which have become more secretive and suspect under Chair Lina Khan. Have FTC officials solicited foreign counterparts to scuttle other deals they believe they are likely to lose in U.S. courts under the reigning consumer-welfare antitrust standard?” the WSJ editorial board said.

“The U.S. Chamber of Commerce is challenging the FTC redactions. If the FTC doesn’t believe its coordination with foreign officials is improper, why hide it?”

Ken Silva is a staff writer at Headline USA. Follow him at twitter.com/jd_cashless.

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