Feds Open Public Comment Period for Proposed Merger Guideline Changes
The Federal Trade Commission and the Justice Department have opened a month-long public comment period for a proposed revision of Horizontal Merger Guidelines.
The updated guidelines detail how the agencies evaluate the competitive impact of mergers and whether those mergers run afoul of antitrust law. The guidelines were issued in 1992 and were last revised in 1997. The current revisions are designed to reflect the way the FTC and DOJ now conduct merger reviews, the two agencies said in a joint statement.
"Eighteen years have passed since the Horizontal Merger Guidelines were revised. During that time, the agencies' approach has evolved significantly, and the guidelines should reflect that," FTC Chairman Jon Leibowitz said. "The proposed guidelines put out for comment today reflect the current state of merger analysis at the FTC and DOJ, and will help make the process more transparent to American businesses and courts. By inviting comments from all stakeholders, we'll make sure that the final Guidelines are clear and accurate in conveying the agencies' merger enforcement intentions."
The proposed revisions reflect public comments from five public workshops that the two agencies held over the past six months to determine whether an update is needed. Many parts of the proposed guidelines reflect changes identified in the Commentary on the Horizontal Merger Guidelines, which the agencies issued in 2006.
The proposed guideline changes would:
- Clarify that merger analysis is a fact-specific process through which the agencies analyze the evidence to determine whether a merger may lessen competition.
- Create a new section on "Evidence of Adverse Competitive Effects," using past experiences that the agencies have found predict the competitive effects of mergers.
- Explain that market definition is not an end itself or a necessary starting point of merger analysis, but a tool that illuminates a merger's competitive effects.
- Update the hypothetical monopolist test used to define antitrust markets and how the agencies implement that test in practice.
- Expand discussion of how the agencies evaluate unilateral competitive effects, including effects on innovation.
- Clarify that coordinated effects, like unilateral effects, include conduct not otherwise condemned by the antitrust laws.
- Add new sections on powerful buyers, mergers between competing buyers, and partial acquisitions.
Public comments are being accepted until May 20.