Over the last two months, the FTC’s merger enforcement bureau has been a busy group. The FTC has litigated three merger-related preliminary injunction applications during the period, winning one (FTC v. Staples1) and losing two (FTC v. Penn State Hershey Medical Center2 and FTC v. Advocate Health Care3). And while the FTC’s victory in Staples reflects what can now fairly be called a “string” of victories in cases involving highly concentrated industries within relatively static marketplaces, the two hospital decisions sit at the other end of that spectrum.
There is, however, learning to be found for antitrust practitioners in comparing these cases and outcomes. What we see are the challenges that must be overcome when the FTC (or Department of Justice) can persuade a court that it is dealing with a merger in an industry with very little entry, expansion, or repositioning by competitors (and, of course, the challenges when the parties decide not to put in a defense); conversely, the hospital losses serve as good examples of the difficulties the FTC faces when parties can demonstrate such competitive dynamics, in which case any presumption of anticompetitive effects based on market structure is lost.
