US Federal Trade Commission (FTC) Chair Lina Khan welcomed the fact that companies are considering antitrust issues earlier in their decision-making processes. Speaking to the Council on Foreign Relations in New York on Friday, Khan noted that increasing scrutiny of mergers helps prevent potentially illegal deals.

According to Reuters Khan stressed that increased vigilance around mergers leads to greater deterrence of illegal corporate actions. “When mergers are more closely scrutinized, you can see greater deterrence of illegal mergers,” she said. Khan’s comments were in response to a question about the criticism she often faces from some Wall Street investors.

Khan noted that it was a step in the right direction for companies to think about the legal implications of their mergers. “As a law enforcer, I want people to think about whether or not their business is breaking the law. This is progress,” she said. Khan also acknowledged that some might view these developments negatively, particularly those focused on financial gains from transactions. “If you look at it from the perspective of transaction fees and the like, I can understand why it might be upsetting,” she added, eliciting laughter from the audience.

The FTC chairman has faced opposition from the business community, arguing that the FTC and Department of Justice’s (DOJ) increased focus on antitrust issues has led to a slowdown in mergers and acquisitions. According to Reuters, some critics claim that this scrutiny has dried up the “merger pipeline.” In July, two prominent Democratic donors even called on Vice President Kamala Harris to replace Khan if Harris wins the presidency.

Despite these criticisms, Khan stressed that further empirical research is crucial to better understand the impact of antitrust enforcement on areas such as venture capital.

Source: Reuters