By Kirell Lakhman
A California court last week told the Federal Trade Commission to take a hike after hearing the agency's complaints that LabCorp should not be allowed to buy Westcliff Medical Laboratories.
As I wrote last December, the FTC challenged the acquisition by saying it "would harm competition in Southern California." The acquisition was announced last May.
Seeking a preliminary injunction barring the buy, the FTC Dec. 1 said the deal "violates antitrust laws and would lead to higher prices and lower quality in the Southern California market for the sale of clinical laboratory testing services to physician groups."
“We find reason to believe that the acquisition of Westcliff by LabCorp will raise prices for health care for millions of people in Southern California,” the agency added. “We should not lose sight of the critical fact with which we all agree: this merger merits further scrutiny.”
Will it now jump on Quest, too, for trying to strangle competition in eastern Massachusetts?
But enough of that. Last week, Judge Andrew Guilford of the United States District Court for the Central District of California rejected that notion.
As I've said in the past, the FTC is overreaching here. It said the deal would "harm competition," but we're talking about SoCal, one of the nation's largest health-care clusters where you can't walk a block without bumping into a clinical lab, whether private, academic, or reference.
That's the way the court saw it. Writing in its decision, it said there was enough competition in that market for clinical lab services, and asked whether the relevant geographic market could be larger than Southern California."
It added that there are at least 16 other companies providing clinical lab services in the region.
Though the FTC has said it plans to appeal the District Court's ruling, the odds are not in its favor. With the exception of one case, US regulatory agencies charged with overseeing mergers and acquisitions have not won a preliminary injunction request since 2003.
Let's hope this one dies a swift death.
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