The Justice Department and Federal Trade Commission (FTC) have initiated a public inquiry to identify serial acquisitions and roll-up strategies across the U.S. economy that have led to consolidation and harmed competition.
Serial acquisitions and roll-ups involve corporate consolidation where a company expands by acquiring several smaller firms in related sectors or industries. In a joint Request for Information (RFI), the agencies are seeking input from consumers, workers, businesses, advocacy organizations, professional and trade associations, elected officials at various levels, academics, and others to understand how these strategies can stifle competition.
Corporate actors, including private equity firms, engage in such acquisitions across numerous markets and industries. These transactions often fall below the minimum filing thresholds for mergers and therefore are not reported to federal antitrust agencies. This allows acquiring companies to gain significant control over key products, services, or labor markets without government scrutiny. Serial acquisitions can reduce competition within an industry or business sector, negatively impacting consumers, workers, and innovation.
“When companies use serial acquisitions and other roll-up strategies to consolidate industries while evading antitrust scrutiny, they deprive the American people of the benefits of competition,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Public input about where these acquisitions have occurred and how they have impacted competition will help us identify and pursue harmful conduct.”
“Firms can use serial acquisitions to roll up markets, consolidate power and undermine fair competition, all while jacking up prices and degrading quality,” said Chair Lina M. Khan of the FTC. “As the FTC scrutinizes these stealth consolidation schemes, we invite the public to submit information about where serial acquisitions have occurred and their effects.”
The agencies seek information on serial acquisitions in all sectors of the U.S. economy including housing, defense, cybersecurity, distribution businesses, agriculture, construction, aftermarket/repair services, and professional services markets. Comments submitted in response to this RFI will inform enforcement priorities and future actions.
This RFI complements a parallel government inquiry examining how certain healthcare market transactions by private equity firms may increase consolidation while threatening patients’ health outcomes as well as workers' safety.
The Justice Department's latest RFI builds on ongoing efforts to ensure federal antitrust enforcement tools keep pace with changes in business practices. The agencies have proposed amending premerger notification forms to require merging companies to disclose more information about their prior acquisition history. Additionally, the department’s 2023 Merger Guidelines recognize that serial acquisitions may violate antitrust laws.
The public has 60 days to submit comments at Regulations.gov by July 22. Once submitted, comments will be posted on Regulations.gov.