
US antitrust enforcers are proposing new guidelines for determining whether to approve mergers that combine companies that don’t compete with one another but operate in the same supply chain, reported Bloomberg.
The Justice Department and the Federal Trade Commission announced criteria for how they would evaluate so-called vertical mergers in the future. If finalized, the guidelines would replace rules that haven’t formally been updated since 1984 despite new thinking about how such deals affect competition.
The proposal marks a move by the two agencies to clarify their approach to assessing potential competitive harm from vertical deals. Those mergers had long been seen as mostly benign until 2017, when the Justice Department surprised the antitrust world by suing to block AT&T’s takeover of Time Warner, a case the government ultimately lost.
While the lawsuit was an aggressive move, it was criticized by some who said it was driven by President Donald Trump’s animus toward CNN, which was part of Time Warner. The Justice Department has long denied that there were any political considerations in the case.
“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,” the Justice Department’s antitrust chief, Makan Delrahim, said in a statement. Once finalized, they will provide “more clarity and transparency,” he added.
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