The Federal Trade Commission (FTC) has taken a close look at many high-profile healthcare mergers in the past year, and experts say it's possible the agency could thwart the proposed merger between Amazon and One Medical, Brock E.W. Turner reports for Modern Healthcare.

Why FTC could stop Amazon's One Medical deal

For years, there has been continuous government scrutiny of healthcare mergers. In June, FTC requested more information on UnitedHealth Group's* proposed $5.4 billion deal with LHC Group, and in October, the Department of Justice took a closer look at CVS Health's proposed $8 billion deal with Signify Health.

In September, FTC announced it is investigating Amazon's deal with One Medical.

"These combinations are going to bring up a whole new host of antitrust questions," said Erik Gordon, an assistant professor at the University of Michigan's Ross School of Business.

It's not clear whether Amazon will be the subject of an antitrust lawsuit, but regulators have been taking a close look at the use of health data by tech companies. Earlier this month, FTC said that GoodRx was sharing personal health information with Facebook, Google, and other third parties.

According to Gordon, it's possible that FTC could argue that sharing patient data with third parties is an anti-competitive practice and a reason to halt proposed mergers.

"There's a lot of uncertainty about what kinds of combinations you can do in healthcare," he said. "If you're trying to build a new kind of healthcare provider, how certain can you be that the government will allow it? If I was advising one of these companies, I'd tell them to include a big breakup fee in the contract in case the deal is blocked." If the Amazon deal isn't approved by regulators, $195 million would still be owed to One Medical.

Robert Miller, a partner at the law firm Hooper, Lundy & Bookman, said scrutiny from FTC could have an affect on proposed mergers from big tech companies.

"The [Biden] administration has signaled that it's not only very interested in healthcare, but it's very interested in scrutinizing the role of big tech in the American economy," he said. "This isn't just a merger between two companies operating in healthcare … the FTC may see this is an example of big tech's interest in healthcare."

According to Gordon, FTC Chair Lisa Khan will likely interpret antitrust law differently than her predecessors, which could lead to a stricter review of Amazon and One Medical's deal. In 2017, Khan wrote a legal paper making an antitrust case against Amazon.

"[Khan] has made it clear that she has a much more expansive view of what merger law is, or what merger law should be," Gordon said. "She has put folks on notice that she is going to enforce the law the way she thinks it reads. And she's willing to lose court cases to try and do this." (Turner, Modern Healthcare, 2/13)

*Advisory Board is a subsidiary of Optum, a division of UnitedHealth Group. All Advisory Board research, expert perspectives, and recommendations remain independent.