Accept All Cookies
Proposing a radically different conception of government enforcement merger guidelines, the Federal Trade Commission (“FTC”) and the Department of Justice (“DOJ”), on July 19, 2023, jointly issued draft merger guidelines (“Draft Guidelines”) that would replace current Merger Guidelines, which were revised last in 2010. Stating that the “goal of this update is to better reflect how the agencies determine a merger’s effect on competition in the modern economy,” the structure of the Draft Guidelines replaces the step-by-step economically analytical approach to merger analysis with a manifesto of 13 doctrinaire statements that will instead guide the Agencies’ analysis. See FTC/DOJ Press Release dated July 19, 2023.
The Draft Guidelines will apply to all mergers, horizontal and vertical, but specifically call out mergers of tech platforms and PE roll-up strategies and include other novel and throw-back merger enforcement concepts.
The “thirteen guidelines” that the Agencies propose to govern a transaction’s competitive analysis are as follows:
Guideline 1: Mergers Should Not Significantly Increase Concentration in Highly Concentrated Markets.
Guideline 2: Mergers Should Not Eliminate Substantial Competition between Firms.
Guideline 3: Mergers Should Not Increase the Risk of Coordination.
Guideline 4: Mergers Should Not Eliminate a Potential Entrant in a Concentrated Market.
Guideline 5: Mergers Should Not Substantially Lessen Competition by Creating a Firm That controls Products or Services That Its Rivals May Use to Compete.
Guideline 6: Vertical Mergers Should Not create Market Structures That Foreclose Competition.
Guideline 7: Mergers Should Not Entrench or Extend a Dominant Position.
Guideline 8: Mergers Should Not Further a Trend Toward Concentration.
Guideline 9: When a Merger is Part of a Series of Multiple Acquisitions, the Agencies May Examine the Whole Series.
Guideline 10: When a merger Involves a Multi-Sided Platform, the Agencies Examine Competition Between Platforms, on a Platform, or to Displace a Platform.
Guideline 11: When a Merger Involves Competing Buyers, the Agencies Examine Whether It May Substantially lessen Competition for Workers or other Sellers.
Guideline 12: When an Acquisition Involves Partial Ownership or Minority Interests, the Agencies Examine Its Impact on Competition.
Guideline 13: Mergers Should Not Otherwise Substantially Lessen Competition or Tend to Create a Monopoly.
The Draft Guidelines will be open for public comments until September 18, 2023 (60 days). Thereafter, the Agencies will evaluate whether to make changes to the Draft Guidelines before finalizing them.