For two years, a rising drumbeat in Washington has called for increasingly dramatic action to weaken the power of big companies in pharmaceuticals, agriculture, and especially technology. This week, the Federal Trade Commission acted, but with a surprising target — Big Razor.
In a lawsuit Monday, the FTC sued to stop Edgewell, the company that owns Schick, from buying Harry’s, a mostly direct-to-consumer e-commerce razor company that in just a few years has helped to upend the multibillion-dollar shaving industry. It’s a massive blow to both the seven-year-old startup, co-founded by one of the Warby Parker co-founders, and the consumer product goods company, which owns staid brands including Hawaiian Tropic and Playtex. The marriage would have meant a financial exit and path for growth for the venture-backed startup, and fresh leadership at Edgewell, which was planning to anoint Harry’s’ co-founders as co-presidents of the company’s entire U.S. operations.
The move appears to signal that the federal government is back in the anti-merger game after some four decades of lax antitrust enforcement. In a report today, the Wall Street Journal described an expanding Justice Department antitrust probe of Google, too. But analysts say they are skeptical about any far-reaching action by the FTC or the Justice Department against the large technology companies, which numerous politicians, especially Democrats, have urged be broken up, or other large prey.
“Hopefully this is the start of a revival of merger law,” Sandeep Vaheesan, legal director at the Open Markets Institute, an anti-monopoly advocacy group, said of the FTC suit on Harry’s. But the Trump administration has so far taken a relatively passive approach to the tech giants, Vaheesan said. By comparison, most of the states last September joined forces to investigate Google. On Tuesday, representatives of the states met with Justice Department officials in a possible plan to combine efforts, but Vaheesan said the initiative remains outside Washington. “It is possible they join forces but the states are acting mainly because they see DOJ and FTC as sitting on their hands,” he said in an email.