Antitrust: State AGs Want Scrutiny of M&A’s Labor Market Impact
A Jenner & Block memo discusses a recent comment letter submitted to the FTC by 18 state AGs. The letter argues for greater emphasis on labor and workforce issues in antitrust investigations. In addition to expressing concern about “no-poaching” & non-compete agreements, the letter addresses the merger review process. It argues that antitrust regulators should scrutinize a deal’s potential impact on the labor market as well as on consumers. This excerpt from the memo summarizes the state AGs’ position:
As to mergers, the signatories argue that antitrust scrutiny should be applied to merger activity not only with respect to the effects on the end consumer, but also to the effects on the entities that themselves are consumers in the labor market (i.e., employers).
The signatories note that mergers involving entities that do not compete in downstream product or service markets nevertheless might compete for labor, and their consolidation could drive down competition and demand for workers, not all that unlike the effects of a horizontal no-poaching agreement. While the attorneys general do not purport to identify a clear solution or recommendation for how to address mergers, they make clear that current approaches to evaluating merger activity do not adequately take all relevant factors into consideration.
Nearly a third of U.S. states & half the population are represented by the signatories to the letter, and while its impact on federal antitrust regulation remains to be seen, the memo points out that the letter makes it clear that “many state enforcers are acutely interested in trying to regulate a wide variety of business activities and practices on workers.”
-John Jenkins, DealLawyers.com August 20, 2019
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