By: Daniel J. Gilman (Truth On The Market)
In this piece, author Daniel J. Gilman notes the anticipation surrounding the release of new merger guidelines by US antitrust regulators, which materialized on December 18, 2023. The Federal Trade Commission (FTC) and U.S. Justice Department (DOJ) jointly released these guidelines, superseding the 2023 draft, the 2010 Horizontal Merger Guidelines, and the partially withdrawn 2020 Vertical Merger Guidelines.
Among recent developments, the agencies have achieved some victories. The FTC obtained a preliminary injunction against the proposed IQVIA Holdings/Propel Media merger in the U.S. District Court for the Southern District of New York. Additionally, it successfully prevented the Illumina/Grail merger from proceeding, securing partial victory in the 5th U.S. Circuit Court of Appeals. The court rejected certain constitutional claims by Illumina, deferred others to the U.S. Supreme Court, and acknowledged the FTC’s establishment of a prima facie case under the burden-shifting framework attributed to Baker Hughes.
However, the outcome wasn’t a complete success for the FTC. The court determined that the FTC had used an incorrect legal standard in assessing Illumina’s “open offer,” which was a contractual mechanism designed to mitigate alleged harm. Contrary to the FTC’s approach, the court ruled that the open offer should have been assessed during the liability phase rather than the remedy phase. Consequently, the case was remanded to the FTC. Illumina subsequently withdrew from the dispute, likely due to various factors including the anticipation of a favorable outcome upon reconsideration by the FTC.
The FTC also highlighted its resolution of the Amgen/Horizon matter, although it was previously explained in December that the core of the consent order, agreed upon just before trial, had been proposed by Amgen from the outset. The settlement of a case that should not have been pursued appears to be an appropriate resolution. Conversely, the thwarting of the Illumina/Grail merger appears to be an incorrect outcome. It’s noteworthy that the FTC’s case relied on an established harm theory and did not hinge on any particularly innovative aspects from the new merger guidelines or the FTC’s expansive interpretation of Section 5, which some might consider imaginative…