The U.S. Federal Trade Commission yesterday sued private equity firm Welsh Carson Anderson & Stowe, accusing it of suppressing competition and driving up prices for anesthesiology services in Texas.

Why it matters: This is the tip of an antitrust spear aimed at private equity, after decades of avoidance.

Backstory: WCAS in 2012 formed U.S. Anesthesia Partners (USAP), a platform that would acquire anesthesia services groups. Its CEO had previously led a different medical services rollup for WCAS.

• USP today reports having over 700 facility partners in eight states that serve over 2 million patients annually,
• Much of its focus has been on Texas, with a particular emphasis on the Houston and Dallas markets.
• Rollups are a very common private equity strategy, particularly in health care.

Lawsuit: The FTC alleges that WCAS and USAP were involved in a "multi-year anticompetitive scheme" that hurt patient pocketbooks for the sake of profits.

• Specifically, it claims that WCAS and USAP first bought up "nearly every large anesthesia practice in Texas," in order to form a dominant provider, and then forged price-setting agreements with providers that had remained independent.
• It also accuses the defendants of "striking a deal" to keep a major competitor out of Texas (most details of this claim were redacted).
• WCAS said in an emailed statement that the case is "unwarranted" and that the complaint will "harm clinicians and patients."
• The FTC didn't allege wrongdoing by WCAS or USAP in markets outside of Texas. It also didn't name private equity investors Berkshire Partners or GIC, both of which now hold minority USAP stakes.

For the defense: Expect WCAS to retain separate counsel from USAP, and to employ a two-pronged defense.

• First, it will argue that FTC has no right to sue WCAS in the first place. Not only because WCAS long been a minority equity owner since 2014 (i.e., no quantitative control), but also because to do so would be piercing the so-called corporate veil.
• If WCAS loses on standing, it then would attack the case's substance. Part of this would be to argue that FTC hasn't pointed to a specific transaction that tipped UTAP into monopoly territory, and also that UTAP's prices haven't increased faster than broader rates of medical services inflation.

For the prosecution: Regulators will argue that WCAS is a valid defendant because it exerted significant control over USAP despite its minority equity position, including devising the very rollup "scheme" to which it objects. In short, it believes the company took direction from WCAS, including when it comes to conspiring with independent providers on pricing.

• The FTC also believes that the Clayton Act allows it to challenge transactions in the aggregate.

The bottom line: This is a major test case for the FTC, whose chair Lina Khan yesterday published an op-ed in the FT about the antitrust dangers of private equity rollups.

• The FTC previously went after a rollup in the veterinary care space, but that case was settled and never litigated. It also involved a new deal, rather than retroactive ones.
• If the FTC is successful against WCAS, it could create a blueprint for future actions.

GGV Capital, a 23-year-old VC firm whose investments have included Airbnb and ByteDance, is spinning off its China operations because of rising geopolitical tensions.

Why it's the BFD: Other than Sequoia Capital, which recently made a similar move, no Silicon Valley venture firm has been more associated with China than has been GGV.

Details: Unlike Sequoia, however, GGV has never raised geography-specific funds. That could make the decoupling more complicated.

• Word is that GGV won't make management changes to its existing funds, including its $1.5 billion eighth flagship vehicle, but doesn't plan to add any new Chinese portfolio companies.
• GGV had been in market with new funds, per SEC and state pension fund disclosures, and it's unclear what happens to that process.
• The firm says its split will be completed by Q1 2024, although its China team and offices have already been removed from its website.
• GGV's non-China team will continue investing in foreign geographies like Israel, Singapore, India, and Latin America.

The bottom line: GGV is heeding the recent words of Rohit Sipahimalani, chief investment officer of Singapore sovereign wealth fund Temasek: "We won't invest in areas that are in the crosshairs of US-China tensions. We'll prefer to invest in companies that have access to large domestic markets."

• As a side note, Singapore-based GGV partner Jenny Lee, who will be part of the spinoff, sits on Temasek's board.

🚑 Diligent Robotics, an Austin, Texas-based developer of robotic automation for health care, raised $25 million. Canaan Partners led and was joined by True Ventures, DNX Ventures, Next Coast Venture and Northwestern Medicine Innovation. https://axios.link/3PMfkAj

• Mammaly, a Berlin-based pet supplements seller, raised €14m in Series A funding from Five Seasons Ventures, Iris Ventures and Attila Balogh. https://axios.link/48oPxFE

• Secoda, a Toronto-based data management platform, raised US$14m in Series A funding. Craft Ventures led, and was joined by Abstract Ventures and insiders YC and Garage Capital. https://axios.link/455wqxD

• Rain, an Alameda, Calif.-based developer of aerial firefighting tech, raised $9.7m in seed funding, per Axios Pro. DBL Partners led, and was joined by VoLo Earth Ventures, Kapor Capital and Convective Capital. https://axios.link/48qL2KG

🚑 Amenities Health, a Dallas-based maker of digital patient engagement tools for hospitals, raised $6.3m in Series A funding. MemorialCare Innovation Fund led, and was joined by Epic Ventures. www.amenitieshealth.com

• GiftPack, a New York-based corporate gifting startup, raised $4.3m in seed funding led by Chang Hai Lin. www.giftpack.ai

• Pliable, an SF-based data management platform, raised $2.5m in seed funding. Resolute Ventures led, and was joined by CEAS and Counterview Capital. www.pliable.co

• Blackstone and Permira made a nonbinding takeover offer for Adevinta (Oslo: ADE), a European classifieds business with a market cap above $9.7b.

• Adevinta bought eBay's classifieds business in 2021 for $9.2b, beating out Blackstone and Permira. But Permira later got a minority stake via a side purchase from eBay (which had retained a position).

• Eldridge, Brightstar Capital Partners and Claure Group agreed to buy a majority stake in Ausenco, an Australian engineering firm focused on mining, from Resource Capital Funds for around US$578m. https://axios.link/46nQvAc

• Coty (NYSE: COTY), a U.S. beauty and fragrances company, is proceeding with a Paris listing that could take place within a month, per Bloomberg. https://axios.link/3RuKygC

• VNG, a Vietnamese gaming company that's since expanded its tech services, is postponing its U.S. IPO, per Bloomberg. https://axios.link/46qetel

• Hainan Sirius Acquisition, a SPAC led by Zhifan Zhou (head of M&A at China's Hainan Winlong Capital), filed for a $60m IPO. https://axios.link/3EQjPDG

• Salesforce (NYSE: CRM) agreed to buy Airkit.ai, a Redwood City, Calif.-based low-code platform for e-commerce customer engagement. Airkit had raised over $65m from firms like Salesforce Ventures, EQT Ventures, Accel, Emergence Capital Partners and Valor Equity Partners. https://axios.link/3RuPli8

• Donerail Group, an activist investor with shares in Stratasys (Nasdaq: SSYS), said it will vote against the 3D printer's proposed $1.8b takeover of Desktop Metal (NYSE: DM). https://axios.link/46md88k

🚑 Glenmark Pharma (NS: GLEN) of India agreed to sell a 75% stake in its life sciences unit to privately held Indian detergent maker Nirma for around $680m. https://axios.link/46nB7Uq

⚡ Magellan Midstream Partners (NYSE: MMP) shareholders approved the pipeline operator's $18.8b takeover by ONEOK (NYSE: OKE). https://axios.link/3PJS5Hb

• Nippon Television Network Corp. (Tokyo: 9404) acquired a control stake in Studio Ghibli, the Japanese animation studio behind "Spirited Away." https://axios.link/3EN13wX

• U.K. antitrust regulators have approved Microsoft's $69b takeover of Activision Blizzard (Nasdaq: ATVI), following deal revisions. https://axios.link/3RwhRAb

• Zegona (LSE: ZEG) said it's in talks to buy Vodafone's (LSE: VOD) Spanish business. https://axios.link/451FovY

• Keensight Capital of Paris raised €2.8b for its latest fund, focused on growth buyouts of European tech and health care companies. https://axios.link/3Rr7o93

🚑 Quadria Capital, a Singapore-based PE firm focused on health care, is targeting $1b for its third fund. https://axios.link/46EJNWX

• Ziad Hindo stepped down as chief investment officer for the Ontario Teachers' Pension Plan Board. He'll be succeeded on an acting basis by Stephen McLennan. www.otpp.com

10-year Treasury yields climbed to a 16-year high yesterday.

Why it matters: This is the most widely followed gauge of long-term interest rates, and also a key input into stock market valuation models, Axios' Matt Phillips writes.