Federal regulators want the public’s input into new guidelines governing mergers.
The Federal Trade Commission (FTC) and Department of Justice (DOJ) on Wednesday (July 19) unveiled long-awaited updates to the government’s merger rules, representing the first updates to the way officials review corporate tie-ups in years.
“Open, competitive, resilient markets have been a bedrock of America’s economic success and dynamism throughout our nation’s history. Faithful and vigorous enforcement of the antitrust laws is key to maintaining that success,” FTC Chair Lina M. Khan said in a news release.
Assistant Attorney General Jonathan Kanter added, “As markets and commercial realities change, it is vital that we adapt our law enforcement tools to keep pace so that we can protect competition in a manner that reflects the intricacies of our modern economy. Simply put, competition today looks different than it did 50 — or even 15 — years ago.”
The guidelines identify a number of frameworks that regulators use to determine if a merger can lessen competition or create monopolies, while also discussing issues that often arise when agencies “apply those frameworks in several common settings.”
The government’s original merger guidelines were written in 1968, but have been updated in the years since. Members of the public have until Sept. 18 to comment on the proposal.
As noted here earlier this month, the government’s proposed changes to one aspect of merger laws — the Hart-Scott-Rodino (HSR) form, which companies use to notify regulators about large mergers before they take place — has drawn scrutiny from some antitrust experts.
They say these changes would force buyout firms to disclose substantially more information early in the deal and could lead to more mergers being blocked or add months to the process.
“This is breathtaking and astonishing in its reach and potential impact to deals,” James Langston, a partner at Cleary Gottlieb in New York, told the Financial Times in a July 1 report. “There’s nothing about the existing process that was broken.”
The new rule would require companies to provide more detailed information to the FTC and DOJ about the players involved, their respective markets and how the companies operate before an initial 30-day assessment.
Khan said recently that “much has changed” since the HSR was first created, including the increasing complexity and number of mergers.
“The information currently collected by the HSR form is insufficient for our teams to determine, in the initial 30 days, whether a proposed deal may violate the antitrust laws,” she said.
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