The Federal Trade Commission and the Department of Justice have unveiled their 2023 merger guidelines, which break down the agencies' factors and frameworks that are utilized when going over merger and acquisition approvals.
With an initial draft released of 13 guidelines in mid-July, the now 11 updated guidelines are the product of an almost two-year process that focuses on economics and law advancements, market participant diverse experiences, public engagement, and modern market realities, according to the FTC.
"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," U.S. Attorney General Merrick Garland said in the report. "Since releasing the Draft Merger Guidelines earlier this summer, we have engaged with stakeholders across the country, and the Guidelines are stronger as a result. The Justice Department will continue to vigorously enforce the laws that safeguard competition and protect all Americans."
The newly modified guidelines, which were approved in a 3-0 commission vote, aim to address comments taken from the agencies' three Merger Guidelines Workshops, with responses from the public including economists, academics, enforcers, additional policy makers, and extensive engagement from attorneys.
Additionally, the guidelines highlight the competition from price, employment terms and conditions, and platform.This allow the agencies assessment of U.S. modern economy commercial realities when enforcement decisions are being made to ensure that competitions in all forms are being protected by merger enforcement.
Here are the 11 guidelines:
1. Mergers raise a presumption of illegality when they significantly increase concentration in a highly concentrated market.
2. Mergers can violate the law when they eliminate substantial competition between firms.
3. Mergers can violate the law when they increase the risk of coordination.
4. Mergers can violate the law when they eliminate a potential entrant in a concentrated market.
5. Mergers can violate the law when they create a firm that may limit access to products or services that its rivals use to compete.
6. Mergers can violate the law when they entrench or extend a dominant position.
7. When an industry undergoes a trend toward consolidation, the agencies consider whether it increases the risk a merger may substantially lessen competition or tend to create a monopoly.
8. When a merger is part of a series of multiple acquisitions, the agencies may examine the whole series.
9. When a merger involves a multi-sided platform, the agencies examine competition between platforms, on a platform, or to displace a platform.
10. When a merger involves competing buyers, the agencies examine whether it may substantially lessen competition for workers, creators, suppliers, or other providers.
11. When an acquisition involves partial ownership or minority interests, the agencies examine its impact on competition.
To read the 51 page document, click here.