Feds Debut Kinder, Gentler Horizontal Merger Guidelines
On August 19, 2010 – after 18 years, including a year-long revision process – the DOJ and FTC finally released a new – and kinder, gentler – version of the Horizontal Merger Guidelines.
The Guidelines, originally adopted in 1968 and previously revised in 1992, “outline the principal analytical techniques, practices and the enforcement policy of the [DOJ and FTC] with respect to mergers . . . involving actual or potential competitors . . . under the antitrust laws.”
The revision process, started in September 2009, involved a series of workshops, public comment and proposed refinements. The result is a set of revamped Guidelines that differ from the 1992 version in several ways. In general, they reflect a more tolerant approach to mergers, stressing the need to “avoid unnecessary interference with . . . competitively beneficial” mergers; raising the concentration thresholds (HHI’s) that warrant further scrutiny of a merger; and explicitly clarifying that coordinated effects can, in fact, be legal.
The revised guidelines also include several new features. One, “Evidence of Adverse Competitive Effects,” identifies evidence helpful in evaluating mergers. It includes effects of consummated mergers; direct comparisons to events such as mergers, exit, expansion or entry that have occurred in the relevant market; competition between the merging firms; and a merger’s impact on “disruptive” firms that benefit consumers, e.g., through price cutting or innovation. Other additions include discussions of how the agencies evaluate monopsony power, mergers of competing buyers, and partial acquisitions.
The 2010 Merger Guidelines replace the 1992 Guidelines. They do not, however, replace the agencies’ Commentary on the Guidelines issued in 2006. Nor do they replace the Bank Merger Competitive Review guidelines developed in 1995.
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