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Antitrust Attacks on Private Equity Harm Consumers


Access to capital and management expertise is essential for fair competition in business. Historically, private equity firms have played an important role, financing innovation and making America’s financial markets the envy of the world.

Yet antitrust authorities at the Federal Trade Commission and the Department of Justice say these companies — which have cash ready to invest as well as management and financial expertise — are inherently suspect as business owners. and should be subject to increased antitrust scrutiny. FTC Chair Lina Khan said in June that “the business models of private equity firms can, in some cases, distort incentives in ways that reduce production capacity, degrade the quality of goods and services and hinder competition”. In a recent speech, Assistant Deputy Attorney General Andre Forman said that because of private equity concerns, the Justice Department’s antitrust division “often looks more favorably on a market participant as a buyer of assets than a private equity firm.”

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