Tagged: Mergers

Ten months into the Biden Administration, the President’s choice to lead the Antitrust Division of the Department of Justice (DOJ), former Federal Trade Commission (FTC) attorney and antitrust law practitioner Jonathan Kanter, has received Senate confirmation by a vote of 68-29. Time will tell whether Assistant Attorney General Kanter’s reputation in the legal community as an advocate for vigorous antitrust enforcement spills over into his new role, as many expect it will. In the meantime, recent developments on the merger enforcement front signal tighter oversight and will almost certainly impact merger review going forward. The first change implicates the 30-day waiting period that begins to run when parties to a reportable transaction notify the FTC and DOJ of their intended merger, as required by the Hart-Scott-Rodino (HSR) Act. It used to be that parties could request so-called early termination of the waiting period, which on occasion the Government would grant if it was clear the merger did not trigger anti-competitive concerns, thereby obviating the need for further review. But that all changed in February, when the FTC announced it was suspending the practice of early termination, citing the transition to the new Administration and the unprecedented volume of HSR filings for the start of a fiscal year. What was initially termed a temporary suspension has...

On June 30, 2020, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) finalized their much-anticipated Vertical Merger Guidelines. The new Guidelines, which were last updated in 1984, seek to increase transparency around the analytical techniques, practices, and enforcement policies that U.S. antitrust authorities use to regulate mergers between firms at different stages of the supply chain (e.g., a furniture maker that acquires a producer of timber). Vertical mergers generally raise fewer anticompetitive concerns than horizontal mergers between direct competitors. This, in part, is because consolidation along the supply chain tends to result in lower prices, as distributors and finished goods manufacturers can source inputs at cost rather than at the markup they would pay to a third-party supplier. But, as the Guidelines make clear, vertical mergers “are not invariably innocuous”: a merged firm could raise the price for – and even withhold – a necessary input from its rivals or exploit sensitive business information about rivals that it obtains as part of the merger. These so-called unilateral effects threaten harm to competition in the relevant market if rivals wind up abandoning the market, leaving consumers with higher prices and less innovation as a result. Per the Guidelines, DOJ and FTC evaluate the extent to which a vertical merger will raise rivals’ costs...