September 25, 2023
On September 21, 2023, the Federal Trade Commission sued U.S. Anesthesia Partners, Inc. and private equity firm Welsh, Carson, Anderson & Stowe, alleging a multi-year anticompetitive scheme to consolidate anesthesia practices in Texas, entering into price-setting arrangements with other independent anesthesia practices, and by entering a market allocation agreement with another large anesthesia provider, all of which led to higher prices. The alleged violations of Sherman Act Section 1, Sherman Act Section 2, FTC Act Section 5, and Clayton Act Section 7 come almost a year after it was publicly reported that the FTC was investigating USAP for having "too much power in some regional markets through acquisitions." The complaint informs the fact scenario that could underly an FTC challenge to private equity and portfolio company strategies around "roll-up" and "tuck-in" acquisitions that the agencies have articulated as concerning in the proposed Merger Guidelines. Further, by the FTC taking the unusual step of including both the portfolio company and the private equity firm in its complaint, it appears the FTC is looking to put the larger private equity community on notice. Although the case could prompt private antitrust actions, it is worth noting that the FTC is only seeking an injunction and "other equitable relief" to prohibit the defendants from engaging in similar future conduct.