Changes To Vertical M&A Transactions: Will Digital Start-Ups Feel The Effects?

Executive Summary

While antitrust enforcers in the United States and abroad traditionally have approached vertical M&A transactions with relatively lenient scrutiny, recent actions by U.S. authorities signal that this attitude is changing. "Vertical Transactions" are mergers between suppliers or input providers and customers. Last year, the Federal Trade Commission ("FTC") withdrew its Vertical Merger Guidelines and started to increase its enforcement against vertical transactions. The change in position creates uncertainty for certain kinds of transactions that, in the past, would have closed without any, or very little, challenge. The new approach may be especially significant to acquisitions of start-ups within the digital platform market.