Having lost the fight to reinterpret the antitrust laws in court or to amend those laws in Congress, FTC leadership has adopted an in terrorem strategy of bringing causes of action against vertical acquisitions even in the absence of a credible legal or factual basis. Yet regulators have a duty to enforce the law as it exists today, not as regulators would like to rewrite it. In rejecting the vertical merger guidelines that the FTC and the Justice Department had jointly issued in 2020, current FTC leadership advanced the view that federal case law applies excessively demanding standards that overlook the competitive risks posed by vertical acquisitions. The FTC subsequently lost the case against Illumina in its own administrative court, which the commissioners then simply overruled. While the FTC has succeeded in disrupting Illumina’s acquisition of Grail, a cancer-diagnostic startup, that is only because the agency effectively outsourced enforcement to European Union regulators (which asserted jurisdiction and blocked the acquisition even though Grail does no business in Europe).
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