FTC Secures Settlement with Private Equity Firm in Antitrust Roll-Up Scheme Case

The Federal Trade Commission today announced a settlement with private equity firm Welsh, Carson, Anderson, and Stowe and its affiliates (collectively referred to as “Welsh Carson”) that resolves a potential second, administrative antitrust case against Welsh Carson.

According to the complaint, the Commission alleges Welsh Carson, through its portfolio company U.S. Anesthesia Partners (USAP), engaged in anticompetitive acquisitions to suppress competition and drive up prices for anesthesiology services across Texas.

Under a proposed consent order resolving the FTC’s concerns, Welsh Carson will be required to limit its involvement with USAP and notify the FTC of specified future acquisitions and investments in anesthesia and other hospital-based physician practices.

The settlement follows an initial September 2023 federal court complaint in which the Commission alleged that USAP and Welsh Carson, which created USAP in 2012, engaged in a roll-up scheme by systemically buying up nearly every large anesthesia practice in Texas to create a single dominant provider with the power to demand higher prices.

In May 2024, the district court dismissed Welsh Carson from the FTC’s federal challenge on procedural grounds, finding that the FTC lacked authority to bring the case against Welsh Carson in federal court because the complaint did not allege that Welsh Carson was currently violating the law, as required under Section 13(b) of the FTC Act. The Commission’s antitrust case against USAP continues to proceed in federal court.

The Commission’s latest action underscores that the common corporate tactic of seeking dismissal of a federal case on Section 13(b) grounds may delay—but will not deny—the FTC’s efforts to challenge anticompetitive conduct. If necessary, the Commission will bring suit in administrative court to protect consumers from anticompetitive conduct. The settlement here avoids the Commission bringing such an administrative action.

Proposed Order

The FTC’s consent order outlines a variety of terms that protect the public from Welsh Carson’s potential future anticompetitive conduct and deter others from engaging in similar anticompetitive conduct.

The FTC’s proposed consent agreement, among several other provisions, requires that Welsh Carson:

• Limit its ongoing ownership rights and entanglements with USAP by freezing its investment in USAP at current levels and reducing its board representation to a single, non-chair seat. This will prevent Welsh Carson and its affiliates from retaking control over USAP and will reduce Welsh Carson’s ability to benefit from USAP’s monopoly position in Texas;
• Obtain prior approval for any future investments in anesthesia nationwide, as well as prior approval for certain acquisitions by any majority-owned Welsh Carson anesthesia group nationwide; and
• Provide 30-days advance notice for certain transactions involving other hospital-based physician practices nationwide.

The Commission vote to accept the consent agreement for public comment was 5-0. Chair Lina M. Khan issued a statement joined by Commissioners Rebecca Kelly Slaughter and Alvaro M. Bedoya. Commissioner Andrew N. Ferguson issued a statement joined by Commissioner Melissa Holyoak.

Further details about the proposed consent order can be found in the analysis to aid public comment. The FTC will publish the consent agreement package in the Federal Register shortly. Instructions for filing comments appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions.