FTC’s Phillips Cautions on M&A Bans Based on Company Size

Congress should be cautious about legislative proposals that threaten to ban transactions from companies of a specific size, FTC Commissioner Noah Phillips told a U.S. Chamber of Commerce livestream Wednesday. Citing $100 billion in market capitalization as a recent example (see 2104120033), he said such bans could end up applying to companies attempting to compete with those often cited in antitrust conversations. Phillips also criticized attempts to ban Hart-Scott-Rodino mergers, acquisitions and transactions due to the pandemic. The stated rationale was an increase in filings, he said, with the expectation that agencies would be “overwhelmed” and anticompetitive deals would go unnoticed. “The strong would prey upon the weak, and the government would sit there and watch it happen,” he said. When economic fortunes decrease, equity values decrease, companies have less money, and they spend less on M&A, he said, meaning less work for the FTC. “The notion of the overwhelmed agency and the wave of mergers and acquisitions simply wasn’t true,” he said. “It speaks volumes to the kinds of extreme skepticism that certain aspects of our political class apply to M&A generally.”