Corporate & Securities Law

Coming Soon: New Merger Guidelines

The possibility of new Merger Guidelines has been much discussed in the antitrust community, particularly in light of appointment of the two new chief agency economists, Carl Shapiro and Joe Farrell, who have done substantial work on the economics of horizontal mergers and market definition.  Today, the FTC and DOJ announced a series of workshops and period for public comment to explore potential revision of the Guidelines:

The agencies will issue a set of questions about the current Guidelines and possible revisions. Following receipt of public comments and original research addressing those questions or other issues related to the Guidelines, the agencies will host a series of five workshops. The workshops, which are open to the public and press, will take place in December 2009 and January 2010. The first workshop will be held in Washington, D.C., on Dec. 3, 2009, followed by workshops in Chicago, New York City and San Francisco. A final workshop also will be held in Washington, D.C.

“In light of legal and economic developments that have occurred since the last major revision of the guidelines, it is an appropriate time for the antitrust agencies to conduct a review of the guidelines to determine whether any revisions should be made to better protect American consumers and businesses from anticompetitive mergers,” said Christine A. Varney, Assistant Attorney General in charge of the Department’s Antitrust Division. “Having guidelines that offer more clarity and better reflect agency practice provides for enhanced transparency and gives businesses greater certainty when making merger decisions, resulting in a more competitive marketplace that benefits consumers.”

“The bulk of the Merger Guidelines is over 17 years old,” said FTC Chairman Jon Leibowitz. “The 1992 Guidelines explicitly stated that they would be revised from time to time. We think the time has come to do that.”

The FTC will post a set of questions on its Web site later today to begin the discussion on the Guidelines. The agencies are interested in receiving written comments from attorneys, economists, academics, consumer groups, the business community and other interested parties. The questions can be found at: http://www.ftc.gov/bc/workshops/hmg/hmg-questions.pdf.

Horizontal Merger Guidelines topics to be discussed include: the overall method of analysis used by the agencies; the use of more direct forms of evidence of competitive effects; market definition; market shares and market concentration; unilateral effects, especially in markets with differentiated products; price discrimination; geographic market definition; the relevance of large buyers; the distinction between uncommitted and committed entry; the distinction between efficiencies involving fixed and marginal cost savings; the non-price effects of mergers, especially the effects of mergers on innovation; and remedies. Public comments are also invited on whether to incorporate aspects of the 2006 Commentary on the Horizontal Merger Guidelines into the Guidelines themselves.

Additional information about the date, time, and exact location of the workshops will be provided at a later date. Speakers at the workshops will be drawn principally from those filing comments with the agencies. Interested parties should submit comments in accord with the procedures and time frame set forth on the FTC’s Web site.

More on this when the agency questions are posted.  For now, interested readers can start their homework here and here and here.  If readers are interested, perhaps we can put together a blog symposium on the potential revisions to the Guidelines.

Full post as published by Truth on the Market on September 22, 2009 (boomark / email).