FTC, DOJ draft merger guidelines to revamp antitrust enforcement

Merger guidelines overview: 

• Who: The Federal Trade Commission and United States Department of Justice issued draft merger guidelines. 
• Why: The groups wanted the guidelines used to determine if a merger is fair under the Sherman Antitrust Act and Clayton Act to be readily available for courts and the public.
• Where: Both federal departments are based in Washington, D.C.

The Federal Trade Commission and United States Department of Justice jointly released draft merger guidelines on how they will see to the enforcement of antitrust laws related to company mergers.

The draft guidelines were released so that businesses, the public and courts can understand how the groups will investigate business mergers and how it will enforce the Sherman Antitrust and Clayton Act regulations in their antitrust enforcement process.

The first eight merger guidelines look at how the agencies will evaluate the risk that could occur if the companies were to merge and if it would lessen competition or create a monopoly.

The merger guidelines are to make sure mergers don’t increase competition in highly concentrated markets, eliminate substantial competition between firms, increase the risk of anti-competitive coordination, eliminate new entrants into a concentrated market or allow a merger where a company can control the products a competitor uses to compete.

The groups also make sure mergers don’t become vertical mergers that create structures that limit competition, extend or entrench a dominant competitive position or further a trend toward concentration in a market.

“These guidelines consolidate, revise, and replace the various versions of Merger Guidelines issued by the agencies since the Department of Justice’s first Merger Guidelines in 1968,” the antitrust enforcement draft guidelines say. “This revision builds on the learning and experience reflected in those prior Guidelines and successive revisions. These Guidelines reflect the collected experience of the Agencies over many years of merger review in a changing economy.”

Merger guidelines look at entire series of acquisitions in merger and all parts of multisided platforms and minority ownership

The merger guidelines also state that mergers that are part of a series of acquisitions can be looked at as a full series and if it’s part of a multi-sided platform, competition on all sides of that platform will be looked at. If the merger is between competitors, the groups look at if the merger decreases competition for workers or sellers and a deal that includes minority or part owners, the groups look at the impact of that on competition.

The final guideline is an all-encompassing one stating that mergers should not lessen competition or create a monopoly in ways that weren’t explained in the first 12 guidelines.

A 9th Circuit panel did not grant the Federal Trade Commission’s last-minute request to block Microsoft’s $69 billion purchase of video game company Activision Blizzard recently. 

Do you think it’s a consumer benefit to block large company mergers? Let us know in the comments.

Read About More Class Action Lawsuits & Class Action Settlements:

• Live Nation, Ticketmaster’s seek arbitration in antirust claims over merger
• JetBlue exits American Airlines pact following antitrust ruling
• PGA Tour, LIV announce merger, ending litigation
• FTC seeks to block Amgen-Horizon pharmaceutical merger