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Axinn Antitrust Insight: New Proposed Merger Guidelines Reflect DOJ and FTC’s Anti-merger Policy, Signal Continued Aggressive Enforcement
July 27, 2023

The U.S. Department of Justice, Antitrust Division (DOJ), and the Federal Trade Commission (FTC) (and together, the “Agencies”) have released long-anticipated draft merger guidelines (the “2023 Draft Guidelines”) that articulate the Agencies’ policies in reviewing proposed mergers. The 2023 Draft Guidelines adopt an approach that is generally skeptical – even hostile – to mergers. Coupled with the recent announcement of proposed massive changes to the HSR Form, the 2023 Draft Guidelines augur longer, more involved merger reviews, and appear aimed at discouraging merger activity. This is not surprising in light of the Agencies’ rhetoric and enforcement activity during the Biden Administration.

The 2023 Draft Guidelines lay out 13 high-level principles, citing the text of the antitrust laws as well as Supreme Court cases interpreting those laws, and rely much less on economic tests compared to prior Guidelines. Tellingly, a majority of the citations are to cases that pre-date the shift in U.S. antitrust jurisprudence in the 1970s with Supreme Court decisions in cases like General Dynamics and Sylvania. See United States v. Gen. Dynamics Corp., 415 U.S. 486 (1974); Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36 (1977). In particular, the Agencies not only underscore the so-called “structural presumption” (as discussed below under Guideline 1) – aiming to make it easier to block mergers on the basis of market shares alone – they also express deep skepticism toward “rebuttal” evidence often cited by merging parties, and accepted by courts for decades, showing that market shares do not accurately reflect the merger’s impact on competition. Under modern antitrust precedent and economic thinking, this evidence – relating, for example, to the declining position of one of the merging firms, entry and repositioning, and procompetitive efficiencies – is critical to the proper assessment of a merger’s competitive effects.

Superficially, the top-level principles (such as, “Mergers should not eliminate substantial competition between firms”) appear conventional and largely consistent with prior Guidelines. The Agencies’ further articulation of these principles, however, represents a significant break with recent past practice. In addition, the 2023 Draft Guidelines provide fewer specific guideposts and illustrative examples to help companies and practitioners predict enforcement outcomes.

There is significant reason to doubt that the Agencies’ policies – reflected in the 2023 Draft Guidelines – will be embraced by the courts, especially today’s Supreme Court. But the Agencies have been pursuing investigations and litigation advancing these principles throughout the Biden Administration, making the 2023 Draft Guidelines an important document for understanding the Agencies’ priorities and likely investigative paths.

The 13 Guidelines are listed here, together with our reactions to the impact of each:

The Agencies are accepting public comments through September 18, 2023. Link to 2023 Draft Guidelines:

If you have any questions about the draft Guidelines, are interested in potentially submitting comments, or would like to discuss any other issue raised in this Insight, please contact James Hunsberger, or any of Axinn's antitrust partners.

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