The Federal Trade Commission has recently announced that it has authorized legal action to block the merger of the two largest daily fantasy sports sites, DraftKings and FanDuel.  The Commission alleges that the combined entity would control more than 90% of the U.S. market for paid daily fantasy sports contests.

The FTC, together with the Offices of the Attorneys General in the State of California and the District of Columbia, are seeking injuctive relief to put the brakes on the deal and “maintain the status quo” pending an administrative trial. DraftKings and FanDuel are each other’s most significant competitor.  The FTC believes that the proposed merger would create a single provider with the largest share of the United States paid fantasy sports contest market.

“This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel,” said the Acting Director of the FTC’s Bureau of Competition.  “The FTC is committed to the preservation of competitive markets, which offer consumers the best opportunity to obtain innovative products and services at the most favorable prices and terms consistent with the provision of competitive returns to efficient producers.”

The Commission also issued an administrative complaint alleging that the proposed merger violates specific provisions of the Clayton Act and the FTC Act.

Richard B. Newman is an Internet marketing compliance and regulatory defense attorney at Hinch Newman LLP focusing on advertising and digital media matters. His practice includes conducting legal compliance reviews of advertising campaigns, representing clients in investigations and enforcement actions brought by the Federal Trade Commission and state Attorneys General, commercial litigation, advising clients on promotional marketing programs, and negotiating and drafting legal agreements.

ADVERTISING MATERIAL. These materials are provided for informational purposes only and are not to be considered legal advice, nor do they create a lawyer-client relationship. No person should act or rely on any information in this article without seeking the advice of an attorney. Information on previous case results does not guarantee a similar future result. Hinch Newman LLP | 40 Wall St., 35th Floor, New York, NY 10005 | (212) 756-8777.

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