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DOJ and FTC Sweeping Merger Guidelines Explained

 |  December 19, 2023

In a collaborative effort, the US Department of Justice (DOJ) and the Federal Trade Commission (FTC) have officially released the final version of their comprehensive merger guidelines aimed at evaluating and addressing potential anti-competitive corporate combinations. The guidelines, while not legally binding, serve as a framework to guide agency staff, plaintiffs, and the courts in assessing the impact of mergers on competition within the modern economy.

Covering a broad spectrum of competitive factors, the 11 guidelines, announced in July and now finalized, underscore the agencies’ commitment to scrutinizing mergers that may stifle competition, whether in terms of pricing dynamics, employment conditions, or platform competition. The agencies emphasized their focus on “the dynamic and complex nature of competition” in today’s market landscape.

In a joint press release, the DOJ and FTC highlighted the guidelines’ capacity to address potential harm arising from mergers along “any dimension of competition,” including scenarios where an otherwise competitive merger could diminish opportunities for workers. Attorney General Merrick B. Garland stated, “These finalized guidelines provide transparency into how the Justice Department is protecting the American people from the ways in which unlawful, anticompetitive practices manifest themselves in our modern economy.”

Related: FTC & DOJ Call For Updates For More Efficient Merger Review

The guidelines have garnered support from key figures, including White House economist Lael Brainard, a former vice chair of the Federal Reserve. Brainard commended the guidelines as “an important step to lower costs for consumers, ensure a level playing field for small businesses, and ensure antitrust enforcement is fit for purpose in today’s economy.” She went on to emphasize the historical trend of unchecked consolidation contributing to larger corporations gaining more power, resulting in increased prices for consumers and fewer options.

The release of these guidelines is seen as a crucial development in the ongoing efforts to address concerns related to market consolidation and anti-competitive practices. As the U.S. government takes proactive measures to ensure fair competition and protect consumers, the impact of these guidelines on future mergers and acquisitions will undoubtedly be closely monitored by businesses, legal experts, and industry stakeholders alike.

Source: CFO