WASHINGTON – The Justice Department is expected on Thursday to sue to block the $13 billion acquisition of a health technology company by a subsidiary of UnitedHealth Group, said two people familiar with the matter. This thread said, in the latest move by the Biden administration to rein in the company. consolidation.
The agency plans to argue that UnitedHealth’s deal to buy health technology company Change Healthcare will provide UnitedHealth with sensitive data it can use against competitors in the business. insurance business, the two were not authorized to discuss the matter publicly. The lawsuit is expected to be filed in the US District Court for the District of Columbia.
A Justice Department spokesman declined to comment. The companies did not immediately respond to a request for comment.
The deal would be the latest to face resistance from the Biden administration, which has made combating corporate consolidation a central part of its economic agenda. President Biden signed an executive order last year to promote competition in various industries. He also specified Lina Khana prominent critic of tech giants, leader of the Federal Trade Commission, and Jonathan Kanteran attorney who has represented large companies, as head of antitrust efforts at the Department of Justice.
Since then, the FTC has Lockheed Martin is blocked from buying a rocket propulsion system manufacturer and chip giant Nvidia buys Arm design company. Even before Mr. Kanter was confirmed, the Justice Department filed a lawsuit to block the merger of two large insurance brokerage firms; the buy Simon & Schuster of the publisher Penguin Random House; and an agreement that would combine some of JetBlue’s operations with American Airlines.
The lawsuit is scheduled for Thursday to challenge a settlement made by Optum, a subsidiary of UnitedHealth that said last year it would buy Change Healthcare, which provides technology services to companies insurance. UnitedHealth is one of the largest healthcare groups in the country, with revenue of $287.6 billion in 2021. In addition to its healthcare information technology business, its Optum unit also owns facilities physician practice, a large chain of surgical centers and one of the nation’s largest pharmacies. benefit managers.
At the heart of the DOJ’s planned lawsuit is the data that Change Healthcare collects when it helps process insurance claims. The Justice Department plans to argue that the deal would allow UnitedHealth to see the rules its competitors use to handle claims and cut them down. UnitedHealth may also collect data on patients at other insurers to gain a competitive advantage, the lawsuit is expected to say, according to two people familiar with the matter.
The lawsuit is also expected to say that UnitedHealth could keep Change Healthcare products – which are used by other insurers – from its competitors or save some of the new innovation for itself. , these people said. The Justice Department plans to add that the deal will give UnitedHealth exclusive rights to a type of service used to screen insurance claims for errors and speed up processing, the two people said.
The companies have said that the acquisition will improve efficiency in the industry. They also explored the sale of a portion of Change Healthcare that the Justice Department said would give UnitedHealth a new monopoly.
Legislators and regulators are increasingly worried that big businesses could use the vast array of data to hurt their rivals. For example, a congressional committee investigated whether Amazon uses data from outside merchants who use its platform to develop competing products. Critics of Facebook also argue that the company’s years of user data make it difficult for an emerging service to challenge its dominance.
Since Mr. Kanter joined the antitrust division at the Justice Department, critics have said he should not oversee lawsuits against rival companies he represents in private practice. According to a financial disclosure form he filed last year, he had previously represented Cigna, a large insurance company that competes with UnitedHealth and telehealth company Teladoc.
Mr. Kanter was not involved in the UnitedHealth case, said one of the Justice Department’s people with knowledge of the case.
Reed Abelson contribution report.
https://www.nytimes.com/2022/02/24/business/doj-antitrust-lawsuit-unitedhealth.html Justice Department plans to block UnitedHealth Group’s $13 billion deal