DOJ and FTC Announce Draft Vertical Merger Guidelines

When?  Friday, January 10, 2020.

What?  The Department of Justice (DOJ) and the Federal Trade Commission (FTC) released new draft Vertical Merger Guidelines and sought public comment for the next thirty (30) days. (Vertical mergers are combinations of two or more business entities operating at different levels of the same or a similar supply chain.) The relevant statutory provisions are Section 7 of the Clayton Act, 15 U.S.C § 18, Sections 1 and 2 of the Sherman Act, 15 U.S.C §§ 1-2, and Section 5 of the Federal Trade Commission Act, 15 U.S.C § 45.

Why?  Once finalized, after the thirty (30) day comment period, the Vertical Merger Guidelines will provide greater clarity and transparency on how the DOJ and FTC analyze vertical merger transactions. In addition, on January 10 the DOJ withdrew the 1984 DOJ Non‑Horizontal Merger Guidelines.

Click here to view the draft Guidelines.

Three Key Takeaways:

1.  The draft Guidelines detail anti‑competitive economic effects observed over the last couple decades relative to vertical mergers.

2.  The draft Guidelines utilize modern economic analysis to improve enforcement policy for vertical mergers.

3.  The public comment period provides a short window for offering suggested improvements before issuance of the final Vertical Merger Guidelines.