Rep. Williams asks FTC, Justice Department to reconsider small business merger guidelines

On Tuesday, U.S. Rep. Roger Williams (R-TX), chairman of the House Committee on Small Business, asked the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice to reconsider their final Merger Guidelines.

In a letter to the FTC Chair Lina Khan, and Assistant Attorney General for the Antitrust Division Johnathan Kanter, Williams said the rule would impact small businesses at a time when they and other entrepreneurs are struggling.

“Nearly every week, this Administration makes a regulation without considering the impacts it will have on our nation’s entrepreneurs,” Williams said. “This rule, which would take an exit strategy off the board for small businesses, comes at a time when Main Street is already struggling. Moreover, the rule would add to the 288 million paperwork hours this Administration has enacted since inauguration.”

Williams said the jointly released Final Merger Guidelines would expand the amount and type of transaction subject to administrative antitrust investigation and challenge. Williams also said the guidelines would have a significant impact on small businesses which frequently use mergers and acquisitions (M&A) to grow. The final guidelines impact small businesses at a time when they are struggling to access capital bother through traditional and alternative means.

“Congress has charged the FTC and DOJ with administering antitrust statutes to promote open and fair competition, including by preventing M&A that would violate these laws,” Williams wrote. “However, the revised set of Guidelines is significantly more hostile toward mergers than the set they replace. The Guidelines include several presumptions that would automatically designate some proposed M&A activity as harmful to competition and would trigger frequent extended review of transactions. By the FTC’s own estimate, these Guidelines could lengthen the process for merger filing by nearly 300 percent.”

Williams said in 2020, nearly 90 percent of venture-backed startups left their venture funding through an acquisition and that the proposed guidelines created a looming threat to that exit strategy and would limit innovation and growth.

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