In a joint press release, the DOJ and FTC withdrew the 1984 DOJ Non-Horizontal Merger Guidelines and released the long-awaited draft for the 2020 Vertical Merger Guidelines on Friday, Jan 10th 2020. The draft guidelines describe how the federal antitrust agencies review vertical mergers to evaluate whether the mergers violate antitrust law. Vertical mergers combine two or more companies that operate at different levels in the same supply chain. The draft guidelines outline the agencies’ principal analytical techniques, practices, and enforcement policy for vertical mergers.
“While many vertical mergers are competitively beneficial or neutral, both the Department and the Federal Trade Commission have recognized for over 25 years that some vertical transactions can raise serious concern,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.
“The revised draft guidelines are based on new economic understandings and the agencies’ experience over the past several decades and better reflect the agencies’ actual practice in evaluating proposed vertical mergers. Once finalized, the Vertical Merger Guidelines will provide more clarity and transparency on how we review vertical transactions.”
The draft guidelines adopt the principles and analytical frameworks in the agencies’ Horizontal Merger Guidelines, including market definition, the analytic framework for evaluating entry considerations, the treatment of the acquisition of a failing firm or its assets, and the acquisition of a partial ownership interest. The draft guidelines describe the analytical and enforcement considerations that are specific to vertical mergers.
The draft guidelines are open for comment until Feb. 11, 2020
