WASHINGTON — The Justice Division on Thursday sued to dam a $13 billion acquisition of a well being expertise firm by a subsidiary of UnitedHealth Group, within the newest transfer by the Biden administration to clamp down on company consolidation.
The company argued {that a} deal by UnitedHealth to purchase the well being tech agency Change Healthcare would give UnitedHealth delicate knowledge that it might wield in opposition to its opponents within the insurance coverage enterprise. The go well with was filed within the U.S. District Court docket for the District of Columbia. New York and Minnesota additionally joined the lawsuit.
A spokeswoman for Optum, the UnitedHealth subsidiary, mentioned in a press release that the Justice Division’s “deeply flawed place relies on extremely speculative theories that don’t replicate the realities of the well being care system,” and added that the corporate would “defend our case vigorously.” A spokeswoman for Change Healthcare mentioned it was nonetheless “working towards closing the merger as we adjust to our obligations underneath the merger settlement.”
The deal is the most recent transaction to run into opposition from the Biden administration, which has made countering company consolidation a central a part of its financial agenda. President Biden signed an government order final 12 months to spur competitors in several industries. He additionally appointed Lina Khan, a distinguished critic of the tech giants, to guide the Federal Commerce Fee, and Jonathan Kanter, a lawyer who has represented giant corporations, as chief of antitrust efforts on the Justice Division.
Since then, the F.T.C. has blocked Lockheed Martin from shopping for a maker of missile propulsion methods and the chip big Nvidia from buying the design agency Arm. Even earlier than Mr. Kanter was confirmed, the Justice Division sued to dam the merger of two main insurance coverage brokers; the acquisition of Simon & Schuster by the writer Penguin Random Home; and a deal that may have married a few of JetBlue’s operations with American Airways’s.
“It’s half and parcel of this effort to guarantee that markets really are aggressive,” mentioned William Bear, who beforehand served as the top of the Justice Division’s antitrust division.
In a press release, Legal professional Basic Merrick Garland mentioned that the company “is dedicated to difficult anticompetitive mergers, notably these on the intersection of well being care and knowledge.”
The lawsuit on Thursday challenges a deal made by Optum, which mentioned final 12 months that it might purchase Change Healthcare, an organization that provides expertise companies to insurers. UnitedHealth is without doubt one of the largest well being companies within the nation, with $287.6 billion in income in 2021. Along with its well being care info expertise enterprise, its Optum unit owns doctor practices, a big chain of surgical procedure facilities and one of many nation’s largest pharmacy profit managers.
On the middle of the Justice Division’s lawsuit is the information that Change Healthcare gathers when it helps course of insurance coverage claims. The Justice Division argued that the deal would allow UnitedHealth to see the principles that its opponents use to course of claims and undercut them. UnitedHealth might additionally crunch knowledge about sufferers at different insurers to realize a aggressive benefit, the company mentioned.
The lawsuit additionally argued that UnitedHealth might withhold Change Healthcare’s merchandise — that are utilized by different insurers — from its rivals or save a few of its new improvements for itself. The Justice Division added that the deal would give UnitedHealth a monopoly over a sort of service that’s used to display insurance coverage claims for errors and velocity up processing.
The businesses have mentioned that the acquisition will enhance effectivity within the trade. Additionally they explored promoting the a part of Change Healthcare that the Justice Division mentioned would give UnitedHealth a brand new monopoly.
Lawmakers and regulators have more and more apprehensive that massive companies might use troves of information to harm their rivals. A congressional committee has investigated whether or not Amazon makes use of knowledge from exterior retailers who use its platform to develop competing merchandise, for instance. Critics of Fb have additionally argued that the corporate having years of consumer knowledge makes it tough for an upstart service to problem its dominance.
Since Mr. Kanter joined the antitrust division on the Justice Division, critics have mentioned that he shouldn’t oversee instances in opposition to corporations whose rivals he represented whereas in personal apply. In accordance with a monetary disclosure type he filed final 12 months, he as soon as represented Cigna, a serious insurer that competes with UnitedHealth, and the distant well being care firm Teladoc.
Mr. Kanter has not participated within the lawsuit in opposition to UnitedHealth, an individual conversant in the Justice Division’s case mentioned.
Reed Abelson contributed reporting.