The Federal Trade Commission is suing to block the acquisition of women's razor startup Billie by Procter & Gamble. Its rationale is that P&G is using the acquisition to head off a potential threat to its business in the form of Billie's possible brick-and-mortar presence. By eliminating the competition between the startup and the CPG corporation, the FTC says, the acquisition would hurt consumers, reduce innovation, and drive up prices.
Selene Cruz, founder of Restore, a direct-to-consumer brands services company, says that the FTC's argument is puzzling. Billie's brick-and-mortar success is far from assured, especially in view of the strong competition, and blocking the acquisition will likely have the effect of spooking founders of and investors in DTC brands, who see their exit prospects threatened by interference from regulators.
“If the FTC’s goal is to not kill competition then I’d advise them not to diminish exit prospects for investors and founders,” Cruz added.