December 16, 2022

Antitrust: Adapting to the Merger Enforcement Environment

This Freshfields blog reviews the FTC & DOJ’s merger enforcement litigation efforts during 2022 and provides some suggestions about actions companies thinking about current and future transactions should take to enhance their position.  The entire blog is worth reading, but one section that caught my eye addresses how companies are adapting to the new environment:

First, we are seeing parties to transactions prepare rigorously, both in their initial risk assessments and anticipating probes based on innovative and ambitious theories of harm, for example to counter alleged market definitions that are inconsistent with how the industries operate in practice and with verifiable facts.

Second, we are increasingly seeing parties contemplate “fix-it-first” or “litigate the fix” strategies, whereby parties attempt to remedy potential anticompetitive effects on their own—sometimes before filing for merger clearance when “fixing it first,” or after an investigation in the case of “litigating the fix.”

Third, we observe parties planning for longer timelines in deal documents, with long stop dates that extend for up to 24 months to account for in-depth investigations in both the US and globally, and for litigation. And finally, on the topic of litigation, we see companies not only accept the possibility of merger litigation but also account for it as part of their clearance strategy.

After reviewing 2022 case law, the blog concludes that while the antitrust agencies have taken an aggressive and often innovative approach, courts continue to demand that the agencies convincingly substantiate their allegations of competitive harms, and also continue to uphold established merger control precedents in response to the novel theories advanced by the FTC & DOJ.

John Jenkins