Settlement Suggests Continuity In FTC’s Private Equity Stance

Katten reports that in January 2025, the Federal Trade Commission (FTC) reached a settlement with private equity firm Welsh, Carson, Anderson, and Rowe to resolve allegations of antitrust violations without initiating an administrative action.

The FTC accused Welsh Carson of executing a “roll-up” scheme from 2012 by systematically acquiring anesthesiology practices in Texas to establish a dominant provider, in violation of the Clayton Act, Sherman Act, and FTC Act.

The settlement, which the Commission unanimously approved, restricts Welsh Carson’s control over its portfolio company, US Anesthesia Partners, Inc. (USAP), and mandates FTC oversight for future acquisitions.

Welsh Carson created and controlled USAP to acquire anesthesiology practices in Texas.

In 2023, the FTC filed a lawsuit in federal court under Section 13(b) of the FTC Act to stop the roll-up. However, the court dismissed the case, citing its reduced, non-controlling 23% stake in USAP.

The court did not comment on potential past violations. The FTC then prepared to pursue an administrative case against Welsh Carson, which was preempted by the settlement.

The settlement includes three main provisions: freezing Welsh Carson’s stake in USAP, requiring FTC approval for future anesthesia-related acquisitions, and mandating notice for other physician practice acquisitions.

The settlement sparked debate among commissioners about its implications for private equity regulation. While Democratic commissioners praised it as a novel approach to private equity oversight, Republican commissioners, including Commissioner Ferguson, who became the Trump Administration’s newly appointed FTC Chairman just a few days after this settlement, argued against singling out private equity.

The FTC’s separate case against USAP continues and is expected to set significant antitrust precedents regarding serial acquisitions. Katten writes that under the Trump administration, private equity may not be a target, but if a private equity firm actively participates in roll-up acquisitions that substantially lessen competition or tend to create a monopoly, it may well face scrutiny.

Commissioner Ferguson, joined by Republican Commissioner Holyoak, issued a concurring statement asserting that there is “no reason for the Commission to single out private equity for special treatment.”