FTC, DOJ Release Long-Awaited Merger Guidelines

Merger guidelines released Monday will provide greater transparency into FTC and DOJ antitrust enforcement, but regulators will continue to base cases on facts and the law, the agencies said Monday.

The FTC and DOJ released 2023 merger guidelines, a nonbinding document completed after a nearly two-year process with multiple rounds of public comment (see 2311140072). Tech groups said the document's language unfairly targets tech companies and will disadvantage them by lowering the bar for antitrust scrutiny and increasing compliance costs.

The guidelines “are faithful to the law and reflect how competition plays out in our modern markets,” DOJ Antitrust Division Chief Jonathan Kanter said. “Ensuring that our merger enforcement protects that competition is our North Star.” FTC Chair Lina Khan said the guidelines “reflect the new realities of how firms do business in the modern economy and ensure fidelity to statutory text and precedent.” The agency voted 3-0 to approve the document.

The agencies said the guidelines are a “non-binding statement that provides transparency on aspects of the deliberations the Agencies undertake in individual cases under the antitrust laws.” Enforcers will “continue to make decisions in particular matters based on the law and the facts applicable to each case,” they said.

The guidelines wrongly reject the consumer welfare standard and “decades of antitrust precedent,” CTA Vice President-Regulatory Affairs David Grossman said in a statement Monday. Despite a “robust public comment period,” the merger guidelines “forgot the consumer,” he said: FTC leadership is continuing “down a path that will have a chilling effect on procompetitive transactions, hitting smaller companies, including startups, that drive consumer-benefiting innovation the hardest.”

The guidelines “lower the bar for what mergers would be presumptively illegal” and move the U.S. closer to “European style competition rules by protecting some competitors from competition,” the Computer & Communications Industry Association said in a statement. The document singles out digital platforms with a focus on whether a deal harms competition “between platforms, on a platform or to displace a platform,” said CCIA. The new guidelines “risk chilling valuable transactions in ways that would weaken U.S. exporters’ ability to compete globally,” said President Matt Schruers.

Public Knowledge welcomed the document and urged courts to use it to protect consumers from “anti-competitive mergers.” Vice President Charlotte Slaiman said the guidelines have “the potential to usher in a new economy where competition thrives, to the benefit of consumers, workers, and small businesses.” The document includes “important clarifications” and incorporates feedback from an unprecedented amount of public comment, she said.

Enforcers softened “guilty until proven innocent" language from the draft guidelines, but the final document remains “problematic,” said Jessica Melugin, who directs the Competitive Enterprise Institute's Center for Technology and Innovation. “Stricter structural presumptions remain, threatening to ensnare too many pro-competitive deals in red tape,” she said. “The resulting delays, increased compliance costs and abandoned mergers may end up hurting consumers in the form of less innovation, higher prices, and decreased overall efficiencies.”

Courts and prior administrations “rightly rejected” the approach the FTC and DOJ take in this new document, said Joseph Coniglio, Information Technology and Innovation Foundation antitrust and innovation policy director. “The guidelines demonstrate the DOJ and FTC’s continued intransigence in support of a failed merger policy that views competition and innovation as inherently tethered to structural factors like the number of firms in a market," he said in a statement Monday. ITIF credited the agencies for correcting “several glaring errors” in the draft guidelines. These included changing language treating the existence of a trend to concentration as “inherently suspect and inconsistent with an efficiencies defense.” The agencies also rightly altered language that “inexplicably” applied a “structural presumption in vertical merger cases,” he said. Overall, the new document represents a radical regression toward acquisition policies of the 1960s, he said: “To make matters worse, the DOJ and FTC expressly target the 'platform' business models that are creating tremendous value for American consumers and driving innovation across the economy.”

CTA, CCIA, NetChoice and the U.S. Chamber of Commerce were among several groups that filed comments critical of the draft guidelines in September (see 2309180059).