July 25, 2023
More on “Antitrust: DOJ & FTC Issue Draft Merger Guidelines”
Last week, John shared an excerpt from the Fact Sheet highlighting the key provisions of the DOJ & FTC’s proposed 2023 Draft Merger Guidelines. This S&C memo provides some color commentary on the ideology underlying these guidelines and their impact on antitrust law. Here’s an excerpt:
The skepticism about mergers reflected in the Draft Merger Guidelines is in keeping with public statements of the Biden administration’s appointees, who have been sharply critical of prior enforcement efforts. Although guidelines are not law but rather statements of enforcement intention which are not entitled to judicial deference, prior versions of the guidelines have nevertheless played a significant role in shaping antitrust law because courts have found their analytical frameworks to be persuasive.
It is uncertain whether and to what extent courts will similarly embrace the new framework advanced in the Draft Merger Guidelines, which deviate in important respects from established law. The Draft Merger Guidelines instead harken back to 1950s and 60s Supreme Court precedent, disregarding material developments from district courts, appellate courts, and the Supreme Court itself over the intervening decades. The long-term effect on non-U.S. enforcers and state attorneys general, many of which have modelled their own policies on prior versions of the U.S. guidelines, also remains to be seen.
Although the Draft Merger Guidelines do not change the underlying law, businesses planning merger activity must evaluate their positions and potential transactions carefully in view of the announced changes in the clearance and enforcement environment. Given their potential to influence non-U.S. antitrust authorities, even businesses without a U.S. nexus should review the Draft Merger Guidelines and their potential relevance to their, and their competitors’, individual circumstances and potential transactions.
For more resources, we’re posting memos and other materials in our “Antitrust” Practice Area here on DealLawyers.com.
– Meredith Ervine