Uncharted Territory Ahead: FTC And DOJ Issue Draft Merger Guidelines

On July 19, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) proposed updated antitrust merger guidelines. While the stated goal of the proposed guidelines is to "better reflect how the agencies determine a merger's effect on competition in the modern economy and evaluate proposed mergers under the law," the likely effect of the guidelines, if adopted as written, will be to increase costs to the parties and increase the number of transactions subject to additional information requests, and to possible challenge.

For the first time, the agencies propose consolidating the policies governing horizontal and vertical mergers — including acquisitions and joint ventures — into a single set of guidelines. The new proposed guidelines set forth 13 principles the agencies will apply in determining whether a merger violates the antitrust laws. Of particular note, these principles signal an increased concern with mergers resulting in market shares as low