New Merger Guidelines ' What Clues Can We Learn From The Public Comments?

• Published date: 19 September 2022
• Subject Matter: orporate/Commercial Law, Antitrust/Competition Law, M&A/Private Equity, Corporate and Company Law, Antitrust, EU Competition
• Law Firm: Morrison & Foerster LLP
• Author: Mr Alexander Paul Okuliar, Aaron Heath Scheinman and David Shaw

The Biden Administration intends to reshape merger enforcement as part of its broader initiative to change U.S. antitrust law.¹ In keeping with the Administration's goals, the Federal Trade Commission (FTC) and the Department of Justice Antitrust Pision (DOJ) (collectively, the "Agencies") are currently evaluating revisions to their Merger Guidelines. While not binding law, Merger Guidelines shape merger enforcement more than any other mechanism because most decision making in contested mergers occurs within the enforcement agency and parties must typically exhaust a lengthy agency review process before they can be heard by a judge.²

Earlier this year, the Agencies issued a request for information (RFI) to inform their work on the new Merger Guidelines. The RFI gives significant clues to the direction the Agencies intend to take.³ The tone of the RFI was not neutral; consistent with rhetoric from Biden administration enforcers, the RFI all but presupposes the insufficiency of the current merger guidelines and, indeed, the past forty years of merger enforcement.⁴

The comment period closed this spring. The Agencies received over 5,800 comments, posting around 1,900 of them.⁵ Hundreds of these comments included detailed analysis and argument that offered a range of opinions on how the Agencies should analyze mergers. In anticipation of the Agencies' issuance of new proposed Merger Guidelines, we evaluate the public comments submitted this spring and provide insight into the deep pergence of viewpoints. We also explain what to expect next in the process.

Trends

The RFI included 15 broad categories, ranging from questions of general approach such as "Purpose, Harms, and Scope" to more targeted issues including "Digital Markets" and "Innovation and IP." By a significant margin, the most frequently commented upon topics were, unsurprisingly, the general topics namely "Purpose, Harms, and Scope" and "Types and Sources of Evidence." Within the more targeted questions, the most popular topics were "Special Characteristics Markets," "Labor and Monopsony," and "Digital Markets." Each of these latter topics received a disproportionate number of comments, reflecting the significant public debate surrounding these issues.

A broad array of inpiduals and organizations from across the political spectrum commented. No clear majority prevailed on any issue. Many comments expressed support for significant changes, including those that argued for deemphasizing (or even abandoning) the consumer welfare standard.⁶ However, there was also a strong (if smaller) contingent of comments arguing against any reforms at all and a similar number that supported limited, incremental changes to the Merger Guidelines. Many of the comments supporting broad change were from progressive advocacy organizations and labor groups, including the Center for American Progress, the American Economic Liberties Project, the American Federation of Teachers, and the Communication Workers of America. Comments opposing sweeping changes originated largely from major industry groups, bar associations, and conservative- or libertarian-leaning think tanks including the United States Council for International Business, PhRMA, the International Bar Association, and Global Antitrust Institute.

Smaller industry groups tended to break both ways, depending on their particular position in the economy. Representatives of smaller entities low on the supply chain, especially within the healthcare and agriculture sectors'for example R-CALF USA, a trade association of live cattle producers, the American College of Emergency Physicians, and the National Community Pharmacists Association'advocated for changes to the guidelines and enforcement priorities that would provide...