Tagged: Regulatory

DOJ Updates Merger Remedies Manual

On September 3, 2020, two months after releasing the long-awaited Vertical Merger Guidelines, the Antitrust Division of the U.S. Department of Justice issued an update to its 2004 Policy Guide to Merger Remedies. The focus of the updated (and newly titled) Merger Remedies Manual is on structuring and enforcing remedies, short of full-stop injunctions, designed to cure competitive harms caused by mergers – both horizontal and vertical – that would lessen competition if left unchecked. The Manual begins with a set of guiding principles, among them that remedies should preserve premerger competition, but not create ongoing government regulation of the market; temporary relief should not be used to redress persistent competitive harm; the merging entities, not consumers, should bear the risk of a failed remedy; and a remedy must be enforceable to be effective. From these first principles flow two basic tenets of remedies in merger cases: first, that divestitures (so-called structural remedies) are preferable to conduct remedies aimed at regulating the merged firm’s post-merger operations, which are rarely appropriate, and, second, that settlements designed to rectify competitive harm (so-called consent decrees) must be clear, fully implemented, and strictly complied with. To this end, entire sections of the Manual address various aspects of divestitures: from the characteristics of an acceptable third-party buyer, to the ideal...

DOJ and FTC Issue Final Vertical Merger Guidelines

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...

Assembly Bill Would Bar New Jersey Agencies From Exceeding Federal Standards in Rulemaking

A bill introduced on March 8, 2010, by Assemblyman John J. Burchizelli, and voted out of the Assembly Regulatory Oversight and Gaming Committee would prohibit all State agencies from adopting — or even proposing — regulatory standards tighter than those imposed by the federal government, unless such action is specifically authorized by State law. The measure, Assembly Bill No. 2486, would greatly affect environmental regulation, where federal law often sets nationally applicable requirements, but does not preempt State requirements that go beyond the federal “floor.” The bill does not define the key term “specifically authorized by State law.” It would not apply to regulations in effect on the date of its enactment, or to the readoption of such regulations in the future.