January 19, 2022

Antitrust: DOJ & FTC Look to Revamp Merger Guidelines

Yesterday, the DOJ & FTC announced that in order to address “mounting concerns” about the impact of mergers on competition, they are “soliciting public input on ways to modernize federal merger guidelines to better detect and prevent illegal, anticompetitive deals in today’s modern markets.”  This Cleary Gottlieb’s memo addresses comments from FTC Chair Lina Kahn & Assistant AG Jonathan Kanter during a joint press conference announcing the initiative. Here are some of the highlights from their remarks, which suggest that some big changes may be in store:

– The new guidelines may combine horizontal and vertical merger analysis into a single set of guidelines. Notably, while the DOJ is not yet withdrawing from the Vertical Merger Guidelines, AAG Kanter expressed skepticism about those Guidelines and suggested that they may receive limited weight in internal review and may not reflect how DOJ litigates cases with vertical issues.

– Areas of particular interest included multiple references to labor markets, labor issues, and the effect of mergers on labor, as well as to monopsony power more broadly.

– Chair Khan also specifically referenced “private equity roll-ups” as an area for assessment during the review process.

– AAG Kanter called out the section of the Clayton Act that refers to mergers that “tend to create a monopoly” as an area for potential development. Some discussion suggested that this might involve some sort of assessment of whether sheer company size, separate and apart from market power, might be considered for a role in the guidelines.

Kahn & Kanter also emphasized that potential harms from a merger will be evaluated in a “broad and holistic way, including looking beyond impact on end consumers.” Public comments are due by March 21, 2022, and the agencies seem to be on a fast track.  According to the Cleary memo, Chair Kahn & AAG Kanter both expressed a desire to have new Merger Guidelines in place before year end.

John Jenkins