A Glimpse Into Antitrust Merger Review's New Frontier

• Published date: 26 July 2023
• Subject Matter: orporate/Commercial Law, Antitrust/Competition Law, M&A/Private Equity, Corporate and Company Law, Antitrust, EU Competition
• Law Firm: Winston & Strawn LLP
• Author: Ms Neely B. Agin, Richard L. Falek, Kevin B. Goldstein, Conor A. Reidy, Lucas W. McFarland, Nasir Hussain and Anthony Nathan Garg

After a series of withdrawals of key antitrust policy statements and guidance documents and announcing an intention to make changes to the merger guidelines, the Federal Trade Commission and Department of Justice (the Agencies) have released new proposed Merger Guidelines. In a significant departure from the past, the proposed merger guidelines (the Proposed Guidelines) apply to both horizontal and vertical mergers. Although these Proposed Guidelines appear to mark a significant shift from the 2010 merger guidelines, they also effectively formalize the practices followed by the antitrust agencies under the Biden administration, including a previous announcement from the FTC that it would focus on new theories of harm as we discussed here. The Proposed Guidelines provide a more comprehensive examination of potential theories of harm considered by the Agencies rather than focusing on the process for how the Agencies analyze a merger as past iterations have done. The Proposed Guidelines are structured around 13 principles (the 13 Guidelines) that the Agencies will use to determine whether a transaction is anticompetitive. The Proposed Guidelines then discuss at greater length the framework for analyzing a merger with respect to each of the 13 Guidelines.

The Proposed Guidelines also signal a notable change in regulatory philosophy, with an approach and language that appear to be aimed more at non-lawyers. Indeed, in its own press release touting the Proposed Guidelines, the White House highlighted the Proposed Guidelines' use of "simple and straightforward language" that would be accessible to readers who are not "antitrust practitioners."

The Proposed Guidelines also exhibit aspirations of bringing the law back to the 1950s and '60s, citing precedent from that era. This deviation from more recent standards and consumer welfare-based approaches may have far-reaching implications. Although these cases are still legal precedent, they generally are not consistent with how lower courts have analyzed merger challenges for the last 40 years. For example, the Agencies cite United States v. Philadelphia National Bank, 374 U.S. 321, 371 (1963), for the proposition that "possible economies [from a merger] cannot be used as a defense to illegality," but more recent lower court decisions have shown that "while the Supreme Court has traditionally frowned on the use of efficiencies to rebut a prima face case, more recent Circuit Court law has departed from the historic...