Judge locates loopholes in DOJ lawsuit to block UnitedHealth deal
Federal regulators failed to show that UnitedHealth Group’s purchase of tech company Change Healthcare would likely harm competition, a judge explained in a memo outlining his dismissal of a lawsuit over the deal.
The US Department of Justice filed a lawsuit in February to block the nearly $8 billion acquisitionwith regulators noting at the time that they feared it would put too much healthcare claims information into the hands of one company.
But US District Judge Carl Nichols issued an order earlier this week to deny the government’s request to end the deal. The case was the subject of a trial in August.
UnitedHealth Group operates the nation’s largest health insurance company and operates a rapidly growing business that processes pharmacy claims and provides care.
Justice Department officials said in February that the deal would give UnitedHealth control of a “critical data highway through which about half of Americans’ health insurance claims pass each year.”
They added that the company could then use that sensitive information from competitors for its own commercial purposes.
Nichols noted in a 58-page memo filed on Wednesday that UnitedHealth’s incentives to protect customer data as its business grows outweighs motivations for information misuse.
The judge also noted that UnitedHealth has agreed to sell part of the Change business to a private equity firm that it will then invest in, likely keeping competition alive.
Assistant Attorney General Jonathan Kanter said in a statement Monday that the Department of Justice is reviewing options for next steps and that they “respectfully decline” the decision.