FTC Facilitates Lively Debate on the Future of Vertical Merger Enforcement

November 2018

FTC Facilitates Lively Debate on the Future of Vertical Merger Enforcement By Blair Kuykendall (Dechert)¹

The FTC hosted two panels on November 1^st to discuss the future of vertical merger enforcement as part of its “Competition and Consumer Protection in the 21^st Century” series.  A panel of economists moderated by Bruce Kobayashi, Director of the FTC’s Bureau of Economics, discussed the application of economic theories in the vertical-merger context.  A second panel, moderated by Bruce Hoffman, Director of the FTC’s Bureau of Competition, discussed the prospects of revising agency guidance on vertical mergers.

The hearings featured rich discussion on multiple topics, including several that revealed sharp differences of opinion among the panelists.  Among the topics discussed, were: (i) whether and how the 1984 Non-Horizontal Merger Guidelines should be revised, (ii) the market structures under which vertical mergers warrant scrutiny, (iii) whether vertical mergers should receive the same level of scrutiny and be analyzed similarly to horizontal mergers, (iv) the merger-specificity of the elimination of double marginalization, a commonly cited efficiency in vertical mergers, and (v) the appropriateness of behavioral remedies for such mergers.

Revision of the 1984 Non-Horizontal Merger Guidelines

Panelists generally agreed that the 1984 Non-Horizontal Merger Guidelines no longer reflect the agencies’ approach to vertical merger analysis and tha