The Federal Trade Commission is reviewing its guidelines on vertical mergers, or a company’s acquisition of other components in its supply chain. But these guidelines jeopardize national security, according to Gen. Herbert “Hawk” Carlisle (USAF, Ret.), president and chief executive officer of the National Defense Industrial Association.
- Carlisle said preventing small, innovative startups from merging with larger companies that have the ability to scale technology inhibits the innovation ecosystem.
- Supporting startups in the defense industrial base is essential for national security as it strengthens the United States’ ability to compete with China, explained Carlisle.
- While vertical mergers can potentially limit competition in cases where competitors are all buying from the same supplier, there are ways to mitigate risks, such as access agreements, said Carlisle.