FTC’s Lina Khan Lauds Corporate Focus on Antitrust in Deal-Making

US Federal Trade Commission (FTC) Chair Lina Khan applauded the fact that companies are increasingly considering antitrust issues earlier in their decision-making processes. Speaking at the Council on Foreign Relations in New York on Friday, Khan remarked that the growing scrutiny around mergers is helping deter potentially illegal deals.

According to Reuters, Khan emphasized that increased vigilance over mergers translates into a greater deterrence of unlawful corporate actions. “When you see greater scrutiny of mergers, you can see greater deterrence of illegal mergers,” she said. Khan’s comments were in response to a question regarding the criticism she often faces from some Wall Street investors.

Khan noted that for businesses, thinking about the legal implications of their mergers is a step in the right direction. “As a law enforcer, I want people to be thinking about whether their deal is going to violate the law or not going to violate the law, so that’s progress,” she said. Khan also acknowledged that some may view these developments negatively, especially those focused on financial gains from transactions. “If you’re looking at it from the prism of deal fees and that sort of thing, I can see why it might be upsetting,” she added, prompting laughter from the audience.

The FTC chair has faced pushback from some in the business world, who argue that the heightened focus on antitrust issues from the FTC and the Department of Justice (DOJ) has led to a slowdown in mergers and acquisitions. Per Reuters, some critics claim this scrutiny has made the “merger pipeline” dry up. In July, two prominent Democratic donors even urged Vice President Kamala Harris to replace Khan if Harris were to win the presidency.

Despite these criticisms, Khan highlighted the importance of further empirical research to better understand the impact of antitrust enforcement on areas like venture capital.

Source: Reuters