On Tuesday, January 18, 2022, the United States Department of Justice (DOJ) and Federal Trade Commission (FTC) announced a joint public inquiry to examine potential changes to federal merger guidelines in order to protect against unlawful and anticompetitive deals. The DOJ and FTC are the federal agencies charged with overseeing the regulation of mergers and acquisitions (M&A) and enforcing federal antitrust laws.
These two agencies are seeking public comment with a mission to update current federal merger guidelines “to better detect and prevent illegal, anticompetitive deals….” This joint initiative comes in response to a surge in corporate dealmaking and consolidation that occurred across industries throughout 2020 and 2021.
From early in its tenure, the Biden Administration has allocated considerable attention and resources to antitrust regulation, which includes monitoring M&A transactions and their impact on commerce. As of this writing, the Biden Administration has commenced, or is currently involved in, numerous high-profile lawsuits that span across a wide breadth of industries, including, but not limited to, the sugar industry, the publishing industry, the semiconductor industry and the insurance industry. These suits seek to prevent transactions that the administration believes will substantially lessen competition, would tend to create monopolies or harm consumers.
In the press release from the FTC, both the Chair of the FTC, Lina M. Khan, and the Assistant Attorney General, Jonathan Kanter, issued statements that touched on the importance of ensuring that federal merger guidelines are tailored to the United States’ current industries and economies.
To accomplish the agencies’ objective with this initiative, the DOJ and FTC are soliciting comments from market participants of all backgrounds in order to curate a new set of merger guidelines.
Among the specific areas that the DOJ and FTC are inquiring into include:
- Purpose and scope of merger review.
- Presumptions that certain transactions are anticompetitive.
- Use of market definition in analyzing competitive effects.
- Threats to potential and nascent competition.
- Impact of monopsony power, including in labor markets. [Ed. Note: a “monopsony” occurs when there are too few buyers of labor or goods in an industry or market, versus too few sellers of labor or goods].
- Unique characteristics of digital markets.
The public comment period is open for 60 days, with all comments to be received as of Monday, March 21, 2022.
If you are interested, you can read the FTC’s full press release here.
"The public inquiry launched today seeks comments on developments in the modern economy and new evidence of mergers’ effects on competition to inform potential revisions to the guidelines. The agencies encourage the public, including market participants, government entities, economists, attorneys, academics, unions, employees, farmers, workers, businesses, franchisees, and consumers, to share feedback, evidence, and ideas that may inform revisions to the guidelines."
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