U.S. Court in New York Temporarily Blocks Merger of Health Care Advertisers
- January 12, 2024
The U.S. District Court for the Southern District of New York issued January 8 a preliminary injunction preventing IQVIA Holdings Inc., the world’s largest health care data provider, from acquiring Propel Media, Inc. while Federal Trade Commission (FTC) administrative proceedings are pending.
In July 2023, the FTC issued an administrative complaint to permanently block the deal, alleging that the proposed acquisition would give IQVIA a market-leading position in programmatic advertising for health care products. The FTC also filed an action in court to prevent the parties from consummating the merger.
Since the COVID-19 pandemic, the multi-billion-dollar-a-year industry for advertising pharmaceuticals and other health care products has shifted to so-called “programmatic advertising,” which allows advertisers using an automated process to target health care professionals (HCPs) with specific ads on websites across the internet, the court noted.
The FTC alleged the merger of IQVIA’s Lasso Marketing division with Propel’s DeepIntent, two of the three leading HCP programmatic advertising firms, would substantially lessen competition in the burgeoning industry. According to the FTC, vigorous competition between Lasso, DeepIntent, and a third major player, PulsePoint, has resulted in lower prices and driven technological innovation.
In the court action, the FTC argued both horizontal—eliminating head-to-head competition between Lasso and DeepIntent—and vertical—foreclosing other industry participants from accessing IQVIA's data, which is a key input for HCP programmatic advertising—theories of harm.
Defendants argued that the FTC defined the market for HCP programmatic advertising too narrowly, pointing to other adertising channels such as social media and endemic websites as reasonably interchangeable alternatives. Defendants also contended that IQVIA lacked the ability or the incentive to foreclose other companies from accessing HCP data.
Following accelerated discovery, an eight-day evidentiary hearing, and thousands of exhibits, the court found the FTC likely to succeed on its horizontal challenge.
In a statement, Bureau of Competition Director Henry Liu hailed the ruling for temporarily blocking “an anticompetitive merger that would raise health care prices for consumers.” Liu also called the decision “a win for the FTC as it continues to challenge anticompetitive deals involving health care and emerging technology platforms.”
IQVIA and DeepIntent represented to the court that they likely would not proceed with the deal if a preliminary injunction was issued.
In an open letter posted January 4, DeepIntent Founder and CEO Chris Paquette confirmed the two companies agreed to abandon merger plans.
Paquett noted that the court’s ruling “was not a final decision on the merits of the FTC’s position that our acquisition would reduce competition.” However, “it now clears the road ahead for an administrative court trial that would require significantly more time, energy and resources from our teams.”
Fed. Trade Comm’n v. IQVIA Holdings, Inc., No. 23 Civ. 06188 (ER) (S.D.N.Y. Jan. 8, 2024).