The FTC and the DOJ's Antitrust Division proposed draft Vertical Merger Guidelines ("Vertical Guidelines") that would replace the DOJ's 1984 Non-Horizontal Merger Guidelines. The proposed new Vertical Guidelines present an analytical framework that the agencies plan to use in evaluating whether proposed vertical mergers would violate antitrust laws. A vertical merger is a merger between two firms that are in the same supply chain. By contrast, a horizontal merger is a merger between firms that compete for the same customers. The proposed Vertical Guidelines rely on many of the same principles, such as market definition, that may be found in the agencies' joint Horizontal Merger Guidelines. The proposal is subject to a 30-day comment period that expires on February 11, 2020.

Specifically, the draft Vertical Guidelines:

  • describe potential unilateral and coordinated anticompetitive effects resulting from vertical mergers;

  • identify instances of antitrust violations under unilateral effects, such as foreclosure and raising rivals' costs and access to competitively sensitive information;

  • outline an analytic framework for assessing the potential anticompetitive effects of foreclosure and raising rivals' costs;

  • introduce a safe-harbor provision that says the agencies "are unlikely to challenge a merger" where the parties have a combined market share of no more than 20 percent in a relevant market and in the related upstream or downstream market;

  • analyze how eliminating double marginalization may reduce the potential anticompetitive effects of vertical mergers;

  • highlight cognizable merger efficiencies specific to vertical mergers; and

  • provide examples of the agencies' analytical methods for evaluating antitrust violations in vertical mergers.


The proposed Vertical Guidelines essentially codify the existing analytical framework used by the government in evaluating vertical mergers. However, Section 4 of the proposed Vertical Guidelines allows the agencies wide latitude to consider "any reasonably available and reliable evidence" of potential anticompetitive effects, essentially reserving the agencies' abilities to consider new or additional theories of harm as applied to vertical mergers. Expect this provision to be cited frequently in evaluating a vertical merger involving one of the so-called Big Tech companies.

The FTC split along party lines in proposing the Vertical Guidelines, with Republicans favoring the Guidelines and the Democratic appointees either flat-out rejecting them or reserving judgment pending review of the public comments.