The Federal Trade Commission and the Department of Justice’s Antitrust Division seek public comment on
.
The draft guidelines, open to comment for 30 days, describe how the
federal antitrust agencies review vertical mergers to evaluate whether
the mergers violate antitrust law. Vertical mergers combine two or more
companies that operate at different levels in the same supply chain. The
draft guidelines outline the agencies’ principal analytical techniques,
practices, and enforcement policy for vertical mergers.
The agencies will review and consider the public comments before
issuing final Vertical Merger Guidelines. The agencies cooperated
closely in preparing the draft guidelines, which reflect the agencies’
significant experience in analyzing vertical mergers. The guidelines are
intended to assist the business community and antitrust practitioners
by providing transparency about the agencies’ antitrust enforcement
policy with respect to vertical mergers.
“Challenging anticompetitive vertical mergers is essential to
vigorous enforcement. The agencies’ vertical merger policy has evolved
substantially since the issuance of the 1984 Non-Horizontal Merger
Guidelines, and our guidelines should reflect the current enforcement
approach. Greater transparency about the complex issues surrounding
vertical mergers will benefit the business community, practitioners, and
the courts,” said FTC Chairman Joseph J. Simons. “We invite comments
from all stakeholders to help ensure that the guidelines clearly and
accurately convey the agencies’ antitrust enforcement policy with
respect to vertical mergers.”
“While many vertical mergers are competitively beneficial or neutral,
both the Department and the Federal Trade Commission have recognized
for over 25 years that some vertical transactions can raise serious
concern,” said Assistant Attorney General Makan Delrahim of the
Department of Justice’s Antitrust Division. “The revised draft
guidelines are based on new economic understandings and the agencies’
experience over the past several decades and better reflect the
agencies’ actual practice in evaluating proposed vertical mergers. Once
finalized, the Vertical Merger Guidelines will provide more clarity and
transparency on how we review vertical transactions. I look forward to
receiving comments on these draft guidelines and working with the
Federal Trade Commission in finalizing them.”
“I appreciate the Antitrust Division working to update this
decades-old statement regarding the practices and policies of the
federal enforcement agencies in this critical area, in coordination with
the Federal Trade Commission,” said Deputy Attorney General Jeffrey A.
Rosen. “As this effort demonstrates, the Department of Justice is
committed to principled and transparent antitrust enforcement, which
promotes free enterprise, market competition, and ultimately the welfare
of American consumers. We look forward to public input and finalizing
this important work, along with the FTC.”
The draft guidelines adopt the principles and analytical frameworks in the agencies’
Horizontal Merger Guidelines,
including market definition, the analytic framework for evaluating
entry considerations, the treatment of the acquisition of a failing firm
or its assets, and the acquisition of a partial ownership interest. The
draft guidelines describe the analytical and enforcement considerations
that are specific to vertical mergers.
The draft guidelines:
- describe potential anticompetitive effects resulting from vertical
mergers, which may include both unilateral and coordinated effects;
- identify foreclosure and raising rivals’ costs and access to
competitively sensitive information as potential elements of antitrust
harm under unilateral effects;
- describe an analytic framework for analyzing potential anticompetitive effects of foreclosure and raising rivals’ costs;
- discuss how the elimination of double marginalization may mitigate
or completely neutralize the potential anticompetitive effects of
vertical mergers;
- discuss cognizable merger efficiencies that are specific to vertical mergers;
- provide a number of examples to provide more clarity about the agencies’ analytical methods in evaluating vertical mergers.
Many comments received from the FTC’s
Hearings on Competition and Consumer Protection in the 21st Century called for additional and updated guidance on analysis of vertical mergers, as have reports from the
American Bar Association’s Antitrust Section and the
Antitrust Modernization Commission.
The Commission vote to publish the draft Vertical Merger Guidelines
and solicit public comments was 3-0-2, with Commissioners Rebecca Kelly
Slaughter and Rohit Chopra abstaining.
Commissioner Christine S. Wilson issued a statement. Commissioners
Slaughter and
Chopra also issued statements. Comments on the draft guidelines can be submitted to
VMG Comments, and must be received no later than Feb. 11, 2020.
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Contact Information
MEDIA CONTACT:
Betsy LordanOffice of Public Affairs202-326-3707
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