FTC chair targets deals that have fallen in agency's 'blind spots'

FTC chair Lina Khan has her sights focused on challenging mergers & acquisitions in the healthcare and tech sectors, specifically those valued under $100 million. Khan argues that these mergers can snowball into larger monopolies when left unchecked. Senior Reporter for Yahoo Finance Anjalee Khemlani joins to breakdown Lina Khan's recent statement at the Oliver Wyman Health Innovation Summit in Chicago.

Video transcript

JOSH LIPTON: Moving on mergers and acquisitions in the health care space is a target for the Federal Trade Commission, its chair has said. An event in Chicago Monday, Lina Khan outlined how data the FTC has been analyzing showed below the radar deals worth millions over time has created monopolies. Yahoo's Anjalee khemlani was at the event. What can you tell us?

ANJALEE KHEMLANI: That's right. We all know that, of course, the FTC released some guidelines, proposed guidelines, earlier this year. And that came to an end in terms of public comments on Monday, the same day that FTC chair Lina Khan was talking about just what prompted that change. We know that of course, the company-- the agency has been looking at breaking up monopolies or at least challenging some of these acquisitions. We saw earlier this year, of course, the Amgen and Horizon Therapeutics deal, which did get to finally go through and is slated to close later this year.

But at the event, talking about the DOJ and FTC looking at how they're going to start scrutinizing mergers, FTC Chair Khan said, quote, "We've seen a whole lot of deals that are below our radar, that are kind of slowly and incrementally consolidating a market. And then five years in, 10 years in, you have two to three players that have come to dominate. And that below the radar deal, she's referring to, is those that are under $100 million. And that's because both the agencies do not have to get notified of every single deal that comes through.

And so in these proposal forms that the companies have to file, they're going to start looking at collecting data on what these past deals have been for the merging companies, whether or not that includes some of these below-radar deals, and start to collect and accumulate more data that tells the tale. Retrospective studies have shown that, in fact, these are the kinds of deals that have been causing what we see as current day, you know, larger firms monopolies. And of course, that has been largely hospitals and major deals in the health care space.

But this goes beyond that. Now, with other players like the tech industry also involved in health care, it's going to be opening the door for greater scrutiny of these deals.