Well, it was fun while it lasted – a little more than a year after adopting the first overhaul of its Vertical Merger Guidelines in 40 years, the FTC voted to rescind them. Here’s an excerpt from this Cadwalader memo:
On September 16, 2021, the FTC voted 3-2 to withdraw its support for the Vertical Merger Guidelines, which were jointly adopted by the FTC and the Antitrust Division of the U.S. Department of Justice (“DOJ”), and the Commission’s commentary on vertical merger enforcement. The FTC’s rescinding of policies without issuing new guidance, coupled with the destabilizing blows to the premerger notification filing program under the Hart-Scott-Rodino Act that we discussed recently, leaves merging parties in the lurch, forcing them to navigate the merger review process in the dark.
To add to the confusion, the FTC and DOJ may be applying different policies with regard to vertical mergers, as the DOJ Acting Assistant Attorney General Richard A. Powers issued a statement hours after the FTC’s vote that, although the Department is reviewing the Vertical Merger Guidelines, they currently remain in place at the DOJ.
The memo notes that the DOJ is currently reviewing both the Horizontal Merger Guidelines and the Vertical Merger Guidelines “to ensure they are appropriately skeptical of harmful mergers,” and says that while significant policy changes may be deferred until after Jonathan Kanter is confirmed to head the Antitrust Division of the DOJ, it already has identified several aspects of the Vertical Merger Guidelines that “deserve close scrutiny” and has pledged to work closely with the FTC to revise them as appropriate.
– John Jenkins