With the Federal Trade Commission's move Tuesday to block DNA-sequencing company Illumina's proposed $1.2 billion takeover of PacBio, both U.S. antitrust agencies are now in the unusual position of trying to stop a big company from scooping up a nascent competitor.
The FTC's action comes on the heels of a U.S. Department of Justice lawsuit challenging Sabre Corp.'s planned $360 million acquisition of airline booking company Farelogix Inc. Challenges of so-called killer acquisitions are relatively rare, but now each federal antitrust enforcer is pursuing one amid heated criticism that the agencies have stood by while dominant firms buy out potential rivals before they can become meaningful competitive threats.
The FTC and DOJ challenges, brought in an administrative process and in federal court respectively, may ultimately feed into the larger debate about nascent competitor enforcement. But experts caution that the overlapped timing of the cases is likely a coincidence rather than a reaction to criticism.
"It's probably fair to say that the agencies are taking a harder look at tech mergers in response to criticism about how concentrated certain technology spaces have become, but each of these challenges appears to stand up on its own merits," Daniel McCuaig, a former longtime DOJ antitrust litigator who is now a partner at Cohen Milstein Sellers & Toll PLLC, told Law360.
In both cases, McCuaig said, dominant players in "concentrated" markets are trying to buy a small competitor. U.S. enforcers have successfully blocked that kind of mergers for decades, he said.
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