The battle over UnitedHealth's acquisition of Change Healthcare is underway.
The trial over the $13 billion deal began Monday in District of Columbia federal court. The Department of Justice (DOJ) filed suit to block the merger in February, citing antitrust concerns, a little over a year after it was first announced in January 2021.
Should the deal close, Change Healthcare will be folded into UnitedHealth Group's sprawling Optum subsidiary, joining its data analytics capabilities to the company's Optum Insight arm.
With the trial officially beginning, here are three things to know about the proceedings:
The proceedings will be lengthy—and it's not the only antitrust trial on deck
Though the first day of the trial is on the books, the hearings are set to continue over the next three weeks into mid- to late August. Multiple notable names are set to testify, including both current UnitedHealth CEO Andrew Witty and former chief David Wichmann, the Minneapolis Business Journal reported.
In addition, the trial isn't the only major antitrust case beginning this week. DOJ's attempt to block Penguin Random House from acquiring Simon & Schuster for $2.2 billion also kicked off Monday, The Wall Street Journal reported.
Both of these antitrust efforts highlight the Biden administration's heightened focus on enforcement. Experts told the WSJ that the lawsuits are a clear sign the DOJ is aiming to "expand the frontiers of merger enforcement."
Feds, critics argue that the deal will stifle competition
Shortly after the merger was announced, industry critics came out to argue that merging UnitedHealth and Change Healthcare would lead to a significant consolidation of data in healthcare. The American Hospital Association was one of the prevailing voices in this argument, pushing the DOJ to step in.
The DOJ lawsuit alleges that the merger would give Optum access to significant amounts of data on other insurers, which UnitedHealthcare could use to get a leg up on the competition. In a pretrial brief, the agency says the healthcare giant has failed to prove the potential positives of the merger outweigh the competitive challenges.
The "vaguely claimed efficiencies cannot save this transaction," the DOJ wrote in the brief.
"Defendants fail, however, to provide a reliable basis to verify these supposed efficiencies or to show that they are merger specific," the DOJ said. "Such generalities offered by defendants fall far short of rebutting Plaintiffs’ showing of harm to competition."
UnitedHealth counters that Optum already has access to competitors' data
While the feds' central criticism of the merger is that UHC could gain access to data from other health plans through Optum, UnitedHealth Group says that Optum already has access to data on competitors through Optum Insight and Optum Health's services.
Those data are not being misused, and to do so would lead Optum to lose a massive part of its business, the company said.
In its pretrial brief, UnitedHealth says plaintiffs must find a way to prove that it would disregard years of firewall policies that protect key parts of its business.
"With respect to innovation, Plaintiffs must prove that post-merger, Optum would withhold innovations from its payer customers—despite years of selling multi-payer solutions— and that failing to share such innovations would harm competition in the alleged large group and national account markets," the company wrote in the brief.