The Federal Trade Commission has begun sending letters to businesses that have filed for mergers with a warning: If they proceed with a merger before the FTC has completed its review, the commission may later find that those mergers were unlawful.
The FTC is sending the letters in response to what it called a "tidal wave" of merger filings this year that have strained its ability to investigate deals in the standard 30-day time frame.
"For deals that we cannot fully investigate within the requisite timelines, we have begun to send standard form letters alerting companies that the FTC's investigation remains open and reminding companies that the agency may subsequently determine that the deal was unlawful," Holly Vedova, acting director of the Bureau of Competition, wrote in a blog post Tuesday. "Companies that choose to proceed with transactions that have not been fully investigated are doing so at their own risk."
The FTC posted a sample letter, which warns that companies "cannot stop the investigation or avoid an enforcement action by consummating" their merger. "To the contrary, and in keeping with its commitment to aggressive enforcement, the Commission may challenge transactions — before or after their consummation — that threaten to reduce competition and harm consumers, workers, and honest businesses," the letter reads.
The FTC's ability to retroactively review mergers has been the subject of criticism by Facebook, which accused the FTC of trying to rewrite history with its antitrust lawsuit against the company. "Years after the FTC cleared our acquisitions, the government now wants a do-over with no regard for the impact that precedent would have on the broader business community or the people who choose our products every day," Facebook tweeted last December.
A district court has since dismissed the FTC's Facebook complaint, but said the commission could amend its complaint and try again.