The U.S. Federal Trade Commission has put a brake on mergers and acquisitions of U.S. fashion companies. When Tapestry, the parent company of well-known fashion brand Coach, tried to acquire Capri Holdings, which owns Michael Kors, the company filed a lawsuit against the company, claiming that only product prices would rise. Analysts say that FTC Chairman Lina Khan, who has been targeting big tech companies since her inauguration, has once again pulled out the anti-trust knife by trying to stop them from becoming fashion dinosaurs.
Analysts say that Khan, who has led anti-trust lawsuits against tech giants, has expanded the scope of regulations to fashion companies this time. Khan, who became the youngest head of the FTC at the age of 32 in June 2021, has been wielding anti-trust swords against big tech companies such as Amazon, Microsoft, and Meta for three years since his inauguration. This is why he is called the “Big Tech Grim Reaper.” The Guardian said that he is the representative of the Biden administration that has put the brakes on big tech monopolies. He was critical of the monopoly of dinosaur companies, which have grown in size even before his inauguration. A 2017 Yale Law School doctoral dissertation was also a paradox of Amazon antitrust.
According to Bloomberg News on the 22nd (local time), the FTC filed a lawsuit against Tapestry’s plan to acquire Capri Holdings for $8.5 billion as a violation of antitrust laws. Henry Liu, director of the FTC’s competition bureau, explained, “The deal takes away competition for consumers to buy reasonably priced handbags and prevents part-time workers from benefiting from high wages and favorable working conditions.” This means that the merger of the two companies will prevent price competition as well as manpower competition between companies, resulting in damage to both consumers and workers.
Analysts say that the suit targeting fashion companies is unusual in the U.S. “This is the first time that the Joe Biden administration has used anti-monopoly law enforcement to prevent mergers and acquisitions in the fashion sector,” Bloomberg said. Tapestry announced in August last year that it would acquire Capri Holdings, which has grown into a popular luxury brand strategy with Michael Kors, Versace, and Jimmy Choo. Back then, it was expected that it would become a representative fashion company in the U.S. against Louis Vuitton-Hennessey, a European luxury goods empire that has grown its size by buying various brands.
U.S. Federal Trade Commission Chairman Rina Khan’s filing of anti-trust laws against her own company is too much of a regulation. A merger within her own country could provide protection from companies in other countries. Before she files an anti-trust law against companies, she will have to think about her own people and companies.
JENNIFER KIM
US ASIA JOURNAL
