- The Federal Trade Commission (FTC) and Department of Justice (DOJ) Antitrust Division are set to modernize merger law enforcement with their new draft guidelines.
- The proposed guidelines will be used to evaluate both vertical and horizontal mergers, potentially allowing the agencies to scrutinize a series of deals, rather than a single merger.
- Even as the future longevity of these guidelines may hinge on post-2024 political dynamics, their implementation signals a significant step towards keeping pace with the digital age and evolving markets.
In a significant move towards modernizing competition law enforcement, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) Antitrust Division have unveiled their eagerly anticipated guidelines on merger law enforcement on Wednesday. These draft guidelines are designed to modernize the agencies' approaches in a constantly evolving digital landscape, and are applicable to both vertical and horizontal mergers.
The guidelines are the latest effort in the agencies' pursuit to keep up with the digital era. The FTC, led by Chairperson Lina Khan, has been actively striving to put a check on the expanding power of tech giants, while Jonathan Kanter's DOJ Antitrust Division has also significantly amplified its activity.
At the heart of the matter are vertical and horizontal mergers. A vertical merger, for example, could be Microsoft's proposed $68.7 billion acquisition of Activision Blizzard. Microsoft is involved in game distribution via Xbox and streaming services, while Activision Blizzard is a game developer. This was challenged by the FTC on the grounds of being anticompetitive, but the courts recently turned down their request to halt it.
These new draft guidelines include 13 critical points which will be used to scrutinize whether a merger should be blocked or allowed. These range from preventing mergers that would significantly increase market concentration or decrease competition, to examining mergers involving competing buyers or multi-sided platforms. This expands the agencies' reach, potentially allowing them to examine a series of deals rather than a single merger.
The FTC and DOJ have been clear that even with potential case losses, the necessity to update their enforcement strategies to better reflect our modern economy is paramount. These new guidelines are currently open for public comment until September 18. Post that, the agencies will consider the comments for revisions before the final publication. The long-term success of these guidelines, however, might be contingent on political dynamics post the 2024 presidential elections.
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