Antitrust Enforcers Release Draft Rules to Crack Down on Mergers and Acquisitions
Antitrust enforcers in the US have recently unveiled a draft update of new rules aimed at cracking down on mergers and acquisitions that could potentially reduce competition. The release of the draft guidelines by the Federal Trade Commission (FTC) and the Department of Justice (DOJ) has sparked a fierce debate between those who support and those who oppose the proposed regulations.
Members of the public now have the opportunity to review the draft guidelines for 60 days and submit their comments to the FTC and DOJ before the September 18 deadline. The FTC hopes to gain widespread public support for the updated guidelines, presenting them as common-sense updates in response to recent complex legal questions raised by mergers within the tech industry.
The draft includes 13 guidelines that can be used by the agencies when assessing whether a merger is unlawfully anticompetitive. These guidelines, for the first time, reference case precedents and are specifically designed to address common issues in merger review.
The guidelines cover a wide range of areas such as market concentration, competition between firms, coordination risks, and potential entrants in concentrated markets. They also address the control of products or services by merged firms, market structures created by vertical mergers, and concerns related to the entrenchment or extension of a dominant market position. Additionally, the guidelines touch on trends towards concentration, multiple acquisitions in a series, competition between buyers, minority ownership or partial interests, and competition concerns that are not addressed by other guidelines.
The first eight guidelines help agencies assess the risk of reduced competition or the creation of a monopoly, while the next four address issues that often arise during the assessment of the first eight guidelines. The final guideline explains how to consider mergers and acquisitions that raise competitive concerns not addressed by the other guidelines.
To provide additional clarity, the draft guidelines also include appendices which describe the evidentiary and analytical tools that have been used by agencies in the past. They also offer overviews of rebuttals and legal tests for invalidating defenses raised by companies.
The FTC’s core goals in drafting these guidelines were to preserve legal precedent, increase transparency and accessibility, and provide meaningful updates that reflect the realities of the modern economy. Attorney General Merrick B. Garland emphasized the importance of these guidelines, stating that unchecked consolidation poses a threat to free and fair markets. He believes that the updated guidelines will enable transparent and effective protection against anticompetitive mergers.
With the public review phase underway, it remains to be seen how these draft guidelines will shape the future of merger and acquisition regulation in the US.
