On Dec. 18, the Federal Trade Commission (FTC) and Department of Justice (DOJ) jointly issued new merger guidelines (Guidelines), finalizing draft guidelines published in July and replacing the 2010 Horizontal Merger Guidelines. The new Guidelines identify the procedures and enforcement practices the antitrust agencies will most often use to investigate mergers and other transactions, particularly those that are subject to premerger filings under the Hart-Scott-Rodino Act. The Biden administration has repeatedly indicated that it views market concentration via merger as a serious threat to competitive markets in the modern economy. The new Guidelines reflect the heightened scrutiny that the antitrust agencies have already begun to apply to proposed transactions.

There are now 11 guidelines that the FTC and DOJ will look to when evaluating proposed deals. These new Guidelines augur more intense scrutiny of mergers. They set forth rebuttable presumptions that mergers are anticompetitive at lower levels of concentration and lower market shares than set forth by the previous Guidelines. The rebuttal of the anticompetitive presumption as a result of merger efficiencies is narrow but has not been completely discarded. The presumption can also be rebutted by various forms of economic evidence. The new Guidelines are more inclusive than the previous Guidelines, manifesting concerns about horizontal, vertical and conglomerate mergers. They address the potential effects of mergers on labor markets, which has been a focus of numerous Biden administration policy initiatives.

Merging parties can expect close scrutiny if a proposed merger:

1. Expands a firm’s dominant position in the market.
2. Increases concentration in a highly concentrated market, with high concentration having been redefined to lower thresholds.
3. Adds to a trend of increasing concentration in that market.
4. Is one of several acquisitions of competitors in the market by a party to the merger.
5. Eliminates a potential entrant, a significant competitor or significant competition between the merging firms.
6. Consolidates the inputs or outlets that rivals need to compete aggressively (likely as a result of a vertical or conglomerate merger).

With the issuance of the new Guidelines, parties to transactions should consider involving antitrust counsel early and in multiple types of transactions to assess strategies for securing clearance and to prepare for potential questions or objections from the antitrust agencies. Should the agencies challenge a transaction, it will be important to keep in mind that the Guidelines are not law, and the extent to which the FTC and DOJ can persuade courts or administrative tribunals to adopt their interpretations of them remains to be seen. To date, the Biden administration antitrust agencies have had, at best, mixed success in their challenges to mergers.

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