March 31, 2014
A review of federal merger enforcement actions from 2010 through 2013 reveals insights on the antitrust agencies’ approach to merger review since the last amendments to the Horizontal Merger Guidelines, accompanied by an expert Q&A with Laura A. Wilkinson, Partner of Weil, Gotshal & Manges LLP.
The Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ)(together, the antitrust agencies) amended the Horizontal Merger Guidelines in 2010 to clarify the analytical tools and types of evidence currently used by the antitrust agencies to analyze the potential competitive impact of merger transactions. In part, the amendments:
- De-emphasized the importance of defining a relevant market and calculating market share and market concentration levels (measured by the Herfindahl-Hirschman Index (HHI)).
- Placed greater emphasis on analyzing the competitive effects of a merger and, in particular, the loss of competition between the merging parties (known as a unilateral effects analysis).
A review of FTC and DOJ merger enforcement actions from calendar years 2010 through 2013 reveals several enforcement trends and insights on the antitrust agencies’ approach to merger review:
- The antitrust agencies concluded a total of 125 merger enforcement actions, with the majority resulting in consent decrees.
- While the 2010 Guidelines de-emphasized the importance of defining relevant markets and calculating market shares and HHI, generally the antitrust agencies continued to cite to these factors.
- The most common alleged change in market competitors resulting from a merger was three-to-two competitors in the market.
- The majority of deals were analyzed under a unilateral effects analysis, and loss of head-to-head competition was the most common theory of competitive harm used.
- Although the 2010 Guidelines eliminated the two-year threshold to analyze the timeliness of market entry, this threshold remained a part of the FTC’s entry analysis.
- The antitrust agencies continued their increased focus on consummated merger enforcement.
- Several 2013 cases show the willingness by the antitrust agencies to factor in market changes in their merger analysis.
To learn more from the experts, see: Federal Merger Enforcement Actions: A Look at Recent Trends.