Scott Sperling, co-CEO of private equity firm THL Partners, sat down with Yahoo Finance's Seana Smith and discussed how regulations and antitrust action around the merger process at Yahoo Finance Invest. Sperling says the Biden administration has made the review process "tougher all around" for dealmaking all around, highlighting the recent court case tied to the Microsoft (MSFT) and ActivisionBlizzard deal. He acknowledges the difficult balance between fighting antitrust regulations in court, which can be costly and time-consuming, versus agreeing to concessions demanded by regulators, which can affect businesses' costs and long-term sustainability.

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Video Transcript

SEANA SMITH: Let's talk a little bit more about what has been happening down in DC, when you talk about some of the proposed changes that have been put forward from the DOJ and the FTC in terms of some of the changes that they would like to see made for the merger review process.

I'm curious from your perspective, in regards to the Biden administration, have they made it tougher for P/E?

SCOTT SPERLING: Yes. They made it tougher all around.

SEANA SMITH: To what extent?

SCOTT SPERLING: I think in a significant way, obviously, the debate is, are you doing this and braking effectively creating new law that was not authorized by Congress? And therefore, we need to go to the court system in order to do what Microsoft just did, which is to basically make the appropriate argument that this was inappropriate law.

But the reality is there's a significant cost to that. And I think that's what the antitrust regulators are betting on, which is whether or not they get overturned, there's significant costs that may cause people to not do deals that, quite frankly, I think, are probably better for the country, if they were done in terms of bringing the cost down for consumers and the long-term sustainability of businesses that may otherwise be subpar competitors, particularly, with foreign competition.

But, nonetheless, I think there's a strong belief on the part of the people leading the FTC and DOJ antitrust that what they're doing is the right thing to do, regardless of whether or not it's consistent with past antitrust practice.

SEANA SMITH: Has that caused you to reevaluate how you are potentially looking at various investment opportunities?

SCOTT SPERLING: I think we have to keep it in mind. We, generally, are not doing things that would trigger the issues that they've focused upon. I think there are situations. Obviously, we've seen a couple of situations where private equity firms strategy of buying a platform, and then building on it by doing some consolidations has now come under scrutiny by those authorities.

And so I think we all just need to be mindful of that in private equity, as we look at investments we're making. But it's definitely a significant factor. And it's one of the re-regulations that I think increase the cost of doing business in the country. That, again, is more inflationary than certainly not disinflationary.