The Federal Trade Commission and U.S. Department of Justice plan to work jointly to toughen the government's merger guidelines. Regulators are concerned about how mergers, now at a record high, hurt competition and lead to layoffs.
In a joint press conference Tuesday, FTC Chair Lina Khan said in 2021 the federal antitrust enforcement agencies received more than double the number of merger filings received on average during the last five years. The increase in mergers coupled with President Joe Biden's 2021 executive order on marketplace competition prompted the agencies to press forward with a review of merger guidelines.
The merger guidelines serve as the basis for the government's ability to challenge potentially anti-competitive mergers.
The FTC and DOJ have issued a request for information (RFI) and are seeking public input that will inform potential revisions and updates to the merger guidelines. The document will be available for public comment until March 21.
"Ever since issuing the first merger guidelines in 1968, the antitrust agencies have sought to ensure these documents accurately set forth current enforcement policies and identify the techniques we use to detect and assess unlawful mergers," Khan said during the press conference.
After the initial comment period, the FTC and DOJ will release a merger guidelines draft and seek further comment before finalizing any updates or revisions, said Jonathan Kanter, assistant attorney general for the DOJ's antitrust division. The agencies hope to have the merger guidelines review completed by the end of 2022, he said.
Changes to merger guidelines
In September 2021, the FTC rescinded its 2020 vertical merger guidelines which were issued jointly by the FTC and DOJ. The 2020 vertical merger guidelines were the first update to vertical merger guidance since 1984.
After voting to rescind the 2020 vertical merger guidelines, Khan said the merger guidelines had "serious deficiencies" and that the FTC would work with the DOJ to create a new set of merger guidelines to ensure they better scrutinize potentially harmful mergers – something the FTC has been facing mounting pressure to do under the Biden administration.
Jonathan KanterAssistant attorney general, DOJ antitrust division
During Tuesday's press call, Kanter said the framing of vertical versus horizontal merger analysis narrows modern markets, which he said are often "multi-dimensional" and something he said the merger guidelines review will take into account.
"We absolutely need to ensure that our tools today allow us to fully understand the markets of today and the realities of how our markets function," he said.
Khan cited three topics in particular the RFI will be seeking feedback on:
- Are the guidelines adequately attentive to the range of business strategies and incentives that might drive acquisitions; how should the guidelines analyze whether a merger may tend to create a monopoly.
- Do the guidelines adequately assess whether mergers may lessen competition in labor markets; when a merger is expected to produce layoffs, should the government treat this elimination of jobs as an identifiable need for more information about the merger.
- Are the guidelines unduly limited in their focus on particular types of evidence; are there certain markets where the guidelines should provide a framework to assess direct evidence of market power.
Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.