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The US Federal Trade Commission announced on Monday that it is seeking to halt Coach parent Tapestry's $8.5 billion acquisition of Michael Kors owner Capri, claiming that it will limit competition.

This comes at a time when some US senators have asked the FTC to conduct further investigations into multiple multibillion-dollar transactions that could result in higher pricing and negative consequences for consumers.

Tapestry-Capri Deal Faces Lawsuit From FTC

In December, US antitrust enforcers issued new merger standards in an effort to promote fair, open, and competitive markets, according to CNN.

Tapestry sought to buy Capri in August, intending to build a US fashion juggernaut capable of competing effectively with larger European rivals such as Louis Vuitton parent LVMH and potentially gaining a larger piece of the global luxury market.

However, in November, the FTC requested additional information from the companies on their merger.

In a statement, Tapestry said that "there is no question that this is a pro-competitive, pro-consumer deal and that the FTC fundamentally misunderstands both the marketplace and the way in which consumers shop."

Earlier in April, the firms got regulatory approval from the European Union and Japan for their merger, which would unite prominent luxury brands like Kate Spade and Jimmy Choo under one roof.

Tapestry and Capri both reacted negatively to the FTC's decision. Capri shares were up 0.6% after hours, while Tapestry up 0.4%. The New York Times reported last week that the agency was ready to prohibit the transaction.

The agreement, which the businesses announced in August and intend to complete this year, is the most recent to be targeted by regulators, as increased prices remain a major concern for customers and President Joe Biden's administration in an election year.

In February, the FTC filed a lawsuit to prohibit the merger of grocery companies Kroger Co. and Albertsons Cos Inc.

The Justice Department filed a lawsuit last year to prevent JetBlue Airways Corp.'s acquisition of Spirit Airlines Inc.; the two airlines abandoned the agreement in March.

Luxury Fashion's Largest Merge in Recent Years

Tapestry's purchase of Capri would be one of the fashion industry's largest in recent years. And it would come as increased prices, particularly for less expensive items like food and rent, put a strain on demand for clothing, apparel, and accessories.

The FTC announced on Monday that Tapestry and Capri would combine to employ around 33,000 workers.

It claimed that Tapestry has worked for years to acquire its way into becoming a fashion behemoth, which would make it more difficult for smaller firms to compete.

Tapestry claimed in a statement that the deal would benefit customers and that the FTC misunderstood the fashion industry's severe rivalry.

The company stated that it competed against hundreds of new and old competitors, and it is confident in its capacity to defend the acquisition in court, MarketWatch reported.