FTC Proposes Updates to Horizontal Merger Guidelines

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

Following a series of joint public workshops held by the FTC and Department of Justice over the past six months, the FTC is seeking public comment on a proposed revision of the Horizontal Merger Guidelines.

The updated guidelines—which outline how the federal antitrust agencies evaluate the likely competitive impact of mergers and whether those mergers comply with U.S. antitrust law—are being revised jointly by the federal antitrust agencies.

The guidelines were issued by the two agencies in 1992 and were last revised in 1997 (CCH Trade Regulation Reporter ¶13,104). The revisions are designed to more accurately reflect the way the agencies currently conduct merger reviews, according to the FTC’s April 20 announcement.

For instance, the proposed guidelines state that “merger analysis does not consist of uniform application of a single methodology.” Rather, it is a fact-specific process through which the agencies use a variety of tools to analyze the evidence to evaluate competitive concerns. In addition, the proposed guidelines explain that “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.”

Many parts of the proposed guidelines reflect refinements and changes previously identified in the “Commentary on the Horizontal Merger Guidelines, which the agencies jointly issued in 2006 (CCH Trade Regulation Reporter ¶50,208).

According to the FTC, the proposed revision includes an updated section on coordinated effects, an updated explanation of the hypothetical monopolist test, and a simplified discussion of how the agencies evaluate market entry. The proposed guidelines also include new sections on powerful buyers, mergers between competing buyers, and partial acquisitions.

Public comments are being accepted until May 20, 2010. Details appear here at the FTC web site.