Agency Perspectives on the Merger Guidelines Review

On Jan. 18, 2022, the Federal Trade Commission (FTC) and the Department of Justice’s (DOJ) Antitrust Division announced a joint public inquiry related to the federal merger guidelines, with the goal of “strengthening enforcement against illegal mergers.” Members of the public are encouraged to provide comments pursuant to the joint request for information through March 21, 2022. After considering these public comments and other available evidence, including their own research, the agencies are expected to publish revised proposed guidelines for public comment. In announcing the joint inquiry, the agency heads identified and explained some of their concerns with current antitrust merger enforcement.

Originally issued in 1968, the merger guidelines undergo regular review and scrutiny from the agencies to ensure they reflect current priorities and practices. The agencies last revised the Horizontal Merger Guidelines in 2010, and while the Vertical Merger Guidelines last received an update in 2020, the FTC recently announced that they will no longer follow them (the DOJ—while not outright abandoning the Vertical Merger Guidelines—has indicated that it has significant concerns about them, particularly their treatment of efficiencies and failure to account for certain anticompetitive effects). The current 2022 review follows a period of unprecedented merger filings with the agencies, which amounted to nearly $6 trillion in total deal value—the highest annual valuation of mergers ever recorded. Kaye Wiggins et al., “Dealmaking surges past $5.8tn to highest levels on record,” Fin. Times (Dec. 30, 2021). The agencies’ decision to review the merger guidelines also comes in the wake of the Executive Order on Promoting Competition in the American Economy, issued on July 9, 2021, which expressly called for the review of the federal merger guidelines “to address the consolidation of industry in many markets across the economy.” President Biden just recently echoed the call for increased enforcement to address rising consolidation in his State of the Union address, noting that “[w]hen corporations don’t have to compete, their profits go up, your prices go up” and announcing a “crackdown on these companies overcharging American businesses and consumers.” 2022 State of the Union Address (March 1, 2022). Lawmakers have also turned their attention to consolidation in various sectors including beef processing, technology, and defense. Competition advocates across these sectors (and others) have expressed serious concerns about not only consumer welfare, but also issues like data privacy, innovation, food safety, and more; undoubtedly the agencies face pressure from all directions to better understand consolidation in the contemporary era and to ensure that the merger guidelines reflect the realities and needs of today.