When the US Federal Trade Commission cleared the merger of the number two and number 4 rental car companies – Hertz and Dollar Thrifty – regulators did so with the requirement that the combined company divest Advantage Rent A Car.
But four months after clearance was given, Advantage filed for bankruptcy. The development is one that antitrust experts say they saw coming, and is a major failure for the FTC.
One antitrust lawyer, Allen Grunes from GeyerGorey LLP, described the ordeal as a “screw up.”
”It’s a huge embarrassment that it happened this quickly,” he said, referring to the bankruptcy filing of Advantage, the company meant to maintain competition against the combined Hertz/Dollar Thrifty firm.
While some criticize the FTC for inadequately preserving competition in the rental car market, Advantage denies that the move is a failure. Advantage CEO Tom McDonnell told reporters there are plans for the company to be sold to a new buyer.
When the FTC ordered the Advantage spin-off, industry expert Sandy Miller was appointed CEO. But just one month later, he was fired. Reports say Miller warned the FTC when it gave preliminary clearance of the deal about one year ago that the move would backfire.
Full Content: Bloomberg
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