The Federal Trade Commission (FTC) has pulled out of the 2020 Vertical Merger Guidelines, leaving the Justice Department to clean up the mess.
Acting Assistant Attorney General Richard A. Powers issued a statement saying the DOJ is conducting a thorough review of the guidelines to ensure they’re not allowing harmful mergers to slip through the cracks.
‘The DOJ is conducting a careful review of the Horizontal Merger Guidelines and the Vertical Merger Guidelines to ensure they are appropriately skeptical of harmful mergers,’ Powers said. ‘Both documents are designed to provide increased transparency and guidance to the public on how the department makes law enforcement decisions.’
Powers revealed that the review has already identified several areas that need scrutiny, including whether the Vertical Merger Guidelines create confusion about the burden on merging parties to prove that the elimination of double marginalization is verifiable, merger-specific, and will likely be passed through to consumers.
The DOJ is also looking into whether the guidelines unduly emphasize the quantification of price effects, which is not the only means to determine whether a vertical merger is unlawful. The department is seeking public comment on ways to improve the guidelines, including addressing concerns about the traditional burden-shifting framework applied by U.S. courts in merger reviews.
Some have suggested that the guidelines deviate from the prevailing legal framework in which the DOJ may establish a prima facie case based on evidence of harm alone. The DOJ is also considering whether the guidelines should more fully explain the range of circumstances that can lead to a concern that a merger may have anticompetitive effects.
The FTC’s withdrawal from the guidelines has raised concerns about the lack of transparency and guidance in merger reviews. The DOJ is working closely with the FTC to update the guidelines and ensure that they are effective in preventing harmful mergers.
As the review continues, the DOJ is seeking public comment on the Vertical Merger Guidelines. The deadline for comments has not been announced.
This is a developing story, and we will provide updates as more information becomes available.
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Key Facts
- State: Federal
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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