Insights

California recently enacted two laws instituting new restrictions and requirements for health care transactions. On October 6, Governor Newsom signed SB 351, which codifies elements of the state’s corporate practice of medicine doctrine and strengthens restrictions against private equity, hedge fund, and other private investor control of health care organizations and operations. On October 11, Newsom signed AB 1415, which expands the scope of parties and relevant transactions that require pre-transaction notice to the state’s Office of Health Care Affordability (OHCA). Both laws are intended to provide the State of California greater oversight of transactions involving health care entities, and raise additional hurdles for parties seeking to acquire or sell health care operations in the state,[1] consistent with a broader trend across the country. The key points of each of the California laws are summarized below:

Federal Trade Commission Chair Andrew Ferguson announced on February 24, 2025, that the FTC will create the agency’s “first-ever” labor task force, signaling the agency’s continued focus on competition in labor markets, answering an open question from companies as to the fate of the agency’s no-poach and non-compete enforcement priorities. On February 26 Chair Ferguson followed up on his announcement with a Directive Regarding Labor Markets Task Force, providing additional details on the task force and the agency’s priorities.

In the latest sign that federal enforcers remain focused on increasing antitrust enforcement, last Thursday, the Justice Department (DOJ), Federal Trade Commission (FTC) and the Department of Health and Human Services (HHS) revealed an online portal, HealthyCompetition.gov, to encourage the public to submit reports on potential anticompetitive and monopolistic conduct in the healthcare sector.  The initiative seeks to address concerns that such behavior may affect healthcare affordability and quality, and employee wages. 

This week, the Federal Trade Commission announced a massive overhaul of the Hart-Scott-Rodino (HSR) Act’s rules and instructions for premerger filings to the U.S. antitrust agencies. The proposed rule represents the most significant revisions to the HSR process since its inception in 1976, vastly expanding the scope of information required to be submitted by parties. The proposed rules would impose significant additional substantive and procedural burdens, substantially increase the time and cost to prepare filings, and raise critical strategic questions for filing parties.

On March 2, 2023, the Federal Trade Commission (“FTC”) announced an enforcement action against California-based online counseling service BetterHelp, Inc. (“BetterHelp”) for allegedly sharing consumers’ health information, including sensitive information about mental health challenges, for advertising purposes in violation of Section 5 of the FTC Act.

On February 1, 2023, the Federal Trade Commission (“FTC”) announced an enforcement action (“Enforcement Action”) against California-based telehealth and prescription drug discount provider GoodRx Holdings, Inc. (“GoodRx”) for allegedly violating section 5 of the FTC Act and the Health Breach Notification Rule (“HBNR”). The proposed order (“Proposed Order”), which was brought by the U.S. Department of Justice on behalf of the FTC, marks the first time the FTC has enforced the HBNR and could signal the beginning of increased scrutiny and enforcement of the HBNR. In addition to imposing a civil penalty of $1.5 million, the Proposed Order prohibits GoodRx from sharing health information for advertising purposes and imposes several requirements on GoodRx, including requirements to (1) obtain user consent for any other sharing of information, (2) seek the deletion of information held by third parties, (3) limit how long it can retain personal and health information, and (4) implement a privacy program.

On January 31, 2023, U.S. District Court Judge Edward Davila (N.D.Cal.) denied the request of the Federal Trade Commission (FTC) for a preliminary injunction to halt Meta’s acquisition of virtual reality (VR) fitness app developer Within.  Because Meta does not compete in the VR dedicated fitness app business, the litigation was a rare example of how a court assesses the “actual” and “perceived” potential competition theories of harm.  Although the court upheld the FTC’s market definition, claims of a highly concentrated market, and the validity of these potential competition theories, the court ultimately held that the FTC failed to demonstrate it was “reasonably probable” Meta would have entered the VR dedicated fitness app business without the Within acquisition, or that VR dedicated fitness app developers’ perception of Meta as a potential entrant had a direct effect on tempering anticompetitive conduct in that market. 

The Antitrust Division recently settled civil antitrust claims against Henry Ford Allegiance Health (Allegiance) for agreeing with a competitor to allocate marketing territories. In a complaint filed in June 2015 in the Eastern District of Michigan (Case No. 5:15-cv-12311), the DOJ and the Michigan Attorney General (the Government Plaintiffs) alleged that four hospital systems agreed not to market their services in each other’s territory. The complaint came after Allegiance’s merger talks with two other health systems (including one of the other defendants in the suit) ended and about five months before Allegiance agreed to be acquired by Henry Ford. This case highlights several important considerations for in-house hospital counsel and their outside legal advisors as hospitals are drawing a lot of scrutiny from federal antitrust enforcers.

In the latest in a string of successful hospital merger challenges, the United States Court of Appeals for the Sixth Circuit recently denied ProMedica's petition for review of the FTC order requiring it to divest St. Luke's hospital.

In a February 19, 2013 unanimous decision in Federal Trade Commission v. Phoebe Putney Health System, Inc., the Supreme Court overturned the 11th Circuit Court of Appeals, holding that an acquisition of a competing hospital by a Hospital Authority created by the State of Georgia was not immune from antitrust scrutiny under the "state-action" doctrine.

The Federal Trade Commission announced today that it would increase the jurisdictional thresholds applicable to both the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") and Section 8 of the Clayton Act. These dollar thresholds are indexed annually based on changes in the U.S. gross national product.