The FTC/ DOJ have released the new proposed horizontal merger guidelines. The public comment period with the Commission ends May 20th. There is a lot to evaluate here. On a quick read through, here are a few of my noted as either changes or interesting as I went through:
- “Market definition is not an end in itself: it is one of the tools the Agencies use to assess whether a merger is likely to lessen competition. Market definition identifies an arena of competition and enables the identification of market participants and the measurement of market shares and market concentration. This exercise is useful to the extent it illuminates the merger’s likely competitive effects.”
- A change in the HHI thresholds (1500, 2000, 2500)
- A new section on Powerful Buyers
- “Rapid entrants” are counted as market participants while other entrants are analyzed in Section 9 under the timely, likely and sufficient standard (this is a change in terminology best I can tell, not substance)
- Section 6.4 explicitly addresses unilateral effects involving reductions in product variety or innovation
- The efficiencies section tacks on the following line after its discussion of the magnitude of cognizable efficiencies necessary to save a merger where there is a significant potential adverse effect: “In adhering to this approach, the Agencies are mindful that the antitrust laws give competition, not internal operational efficiency, primacy in protecting customers.”
Obviously, there will be a lot more to say on this in the coming weeks. For interested readers, a great place to start is comparing the new document to the proposed changes by the participants in our TOTM Merger Guidelines Symposium.