As part of a flurry of activity in anticipation of the imminent change in administration, the Federal Trade Commission announced a unanimous approval of a consent order settling its enforcement action against Welsh Carson, the private equity backer of U.S. Anesthesia Partners (“USAP”). Outgoing FTC leadership heralded the settlement as novel enforcement of the new Merger Guidelines and a win against private equity, whereas potential future FTC Chair, Commissioner Andrew Ferguson, characterized the result as a straightforward application of well-established antitrust law.
Welsh Carson had been accused of engaging in anticompetitive acquisitions of anesthesia practices through its portfolio company. Initially, the FTC sued both Welsh Carson and USAP in federal court, but after Welsh Carson was dismissed on procedural grounds, the FTC threatened the private equity firm with an administrative complaint under Section 5 of the FTC Act on grounds that by serially acquiring previously independent anesthesia practices, Welsh Carson harmed competition for anesthesia services. According to the FTC, by “rolling up” independent practices, Welsh Carson was able to increase the prices charged by each practice to match the highest rate that any of the practices garnered, thus harming consumers.
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