The U.S. Department of Justice’s Antitrust Division and the FTC have issued revised Horizontal Merger Guidelines regarding the evaluation of the likely competitive impact of mergers. The Guidelines were last updated in 1997 and had become increasingly less reflective of the Antitrust Division and the FTC’s current enforcement policies. The new Guidelines note the objectives of “increasing the transparency of the analytical process underlying the agencies’ enforcement decisions” and helping courts interpret and apply antitrust laws to horizontal merger situations. In preparing the revisions, the agencies considered opinions gathered through a series of joint public workshops, as well as hundreds of public comments submitted by attorneys, academics, economists, consumer groups and businesses.
Some of the significant revisions include:
- Addition of a section entitled “Evidence of Adverse Competitive Effects.” This section outlines what type of evidence, and the source of such evidence, that the agencies will consider when analyzing a merger;
- Addition of sections regarding powerful buyers, mergers between competing buyers and partial acquisitions;
- Clarification that merger analysis does not use a single methodology, but is a fact-specific process;
- Explanation that market definition is not necessarily a starting or ending point in merger analysis and market concentration illuminates the merger’s likely competitive effects;
- Update of the concentration thresholds that determine whether a transaction warrants additional scrutiny; and
- Expanded discussion of how the agencies evaluate unilateral competitive effects, updated discussion on coordinated effects, and simplified discussion of the agencies’ evaluation of whether entry into the relevant market is so easy that a merger is not likely to enhance market power.
The 2010 Horizontal Merger Guidelines are available at http://www.justice.gov/atr/public/guidelines/hmg- 2010.html and http://www.ftc.gov/os/2010/08/100819hmg.pdf.