The Federal Trade Commission (FTC) and Department of Justice (DOJ) are working together to transform their merger guidelines, with the new rules likely to significantly affect the Tech industry through new limits, guidelines and oversight over digital mergers, mergers with potential or nascent competitors, and vertical mergers between suppliers and their customers, reported Reuters.
The antitrust watchdogs are expected to hand down their new guidelines by the end of this year, according to a Reuters report released on Monday, March 7. President Joe Biden’s Executive Order on Promoting Competition, signed on July 9th 2021, urged the FTC and DOJ to revise their joint merger guidelines as part of a wide-ranging effort to increase antitrust protections and rein in what some see as excessive concentration and the accumulation of market – and political – power by a handful of dominant companies.
The merger guidelines “describe the principal analytical techniques and the main types of evidence” the agencies rely on to determine whether a merger may “substantially lessen competition,” the report said.
The Horizontal Merger Guidelines were last revised in August 2010, while the Vertical Merger Guidelines were updated in June 2020, replacing their 1984 predecessor. The new document was withdrawn by FTC leadership in September 2021, however, because significant changes were deemed to be based on “unsound economic theories that are unsupported by the law or market realities,” according to the report.
FTC Chair Lina Khan said in January that the FTC and DOJ need to “ensure that our merger guidelines reflect modern realities and equip us to forcefully enforce the law against unlawful deals,” while Assistant Attorney General Jonathan Kanter said the agencies “need to understand why so many industries have too few competitors, and to think carefully about how to ensure our merger enforcement tools are fit for the purpose in the modern economy.”
The FTC and DOJ will close their public comment period on March 21. The agencies are requesting comments from attorneys, economists, and academics, as well as consumers, entrepreneurs, startups, investors, farmers, workers and independent businesses in order to help shape the new guidelines.
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