On January 18, 2022, the United States Department of Justice and Federal Trade Commission announced an intention to reconsider and potentially revise their joint Horizontal and Vertical Merger Guidelines and issued a 60-day window for public comment “on how the agencies can modernize enforcement of the antitrust laws regarding mergers.” The issuance of this “Request for Information on Merger Enforcement” is the latest in a series of efforts by the FTC, under new Chairwoman Lina Khan, and the DOJ’s Antitrust Division, now under the leadership of Assistant Attorney General Jonathan Kanter, to impose greater scrutiny on mergers and to roll back previous moves by the nation’s antitrust enforcers as too permissive of combinations and inadequate to protect competition. Last year, the FTC withdrew the 2020 Vertical Merger Guidelines, and the DOJ now states that it “shares the Commission’s substantive concerns with economic and legal errors in [the 2020 Vertical Merger Guidelines] and seeks to replace them expeditiously with a document better reflecting its current approach.”
Although it remains to be seen what any revisions to the merger guidelines will look like, the questions in the agencies’ Request for Information suggest that the final guidelines will focus on reining in concentration in the U.S. economy, reducing the market share thresholds for presumptions of competitive harm, and altering traditional means of assessing whether a proposed combination may “substantially lessen competition.” For example, the agencies seek input on such questions as:
- Whether mergers involving digital markets should be analyzed differently from those in other industries;
- Whether more emphasis should be given to the potential for a merger involving technology or intellectual property to have a negative impact on innovation;
- The effect of mergers on “aspects of competition the guidelines may underemphasize or neglect, such as labor market effects”;
- The potential for mergers to lessen competition in downstream or upstream markets;
- The effect on markets of serial acquisitions and rollups;
- The effects of mergers in industries that are demonstrating “a trend toward concentration”;
- Whether the guidelines’ traditional distinctions between horizontal and vertical mergers should be revisited “in light of recent economic trends in the modern economy”;
- Whether, and how, the guidelines should consider nonprice effects of a merger; and
Noah J. Phillips and Christine S. Wilson, the two Republican Commissioners who dissented from the FTC’s decision to withdraw the 2020 Vertical Merger Guidelines last year, “welcome[d]” the decision to seek public input on the agencies’ merger guidelines, but they issued a separate statement urging that “merger enforcement should be administrable, predictable, and credible,” and “encourag[ing] the leadership of the FTC and the Antitrust Division to proceed with care and caution.” Eimer Stahl will continue to monitor the agencies’ activities and provide updates on any developments of note.
