In a quest to extend the crackdown on illegal mergers and acquisitions, the Biden administration’s antitrust agencies have rolled out a thorough revamp of rules that the government uses to determine whether deals go against competition law. This enforcement is part of broader efforts to curtail anticompetitive practices.
The Justice Department and Federal Trade Commission have issued 11 new guidelines, designed to hinder attempts by firms to dominate their industries through the acquisition of competitors. These guidelines bear a notable similarity to a proposal that was introduced in July, although the final version excluded a suggested guideline concerning vertical deals – transactions between companies that aren’t immediate competitors but function within the same supply chain.
The final version eased off on another proposed guideline on how mergers contribute to concentration trends. Instead, elements of the omitted rules were incorporated into other sections as a response to public feedback. In addition, the changes aim to address comments regarding the use of economics, specific case citations, and instances where agencies will consider a deal as anticompetitive due to its size.
This decisive move by the US authorities supports the continuing effort to block more mergers after decades of a more lenient governmental approach. Both Assistant Attorney General for Antitrust Jonathan Kanter, and FTC Chair Lina Khan, have voiced their concerns about previous administrations being excessive in their allowance, leading to increased corporate concentration that narrowed consumer choices and led to heightened prices.
These guidelines come in the wake of two significant triumphs by the agencies. Earlier in the week, Adobe Inc. had to give up its attempt to take over Figma Inc. due to regulatory clashes on both sides of the Atlantic. Simultaneously, Illumina Inc. agreed to divest its cancer startup, Grail Inc., thereby marking the FTC’s successful litigation to prevent a vertical deal.
Originally posted on Bloomberg Law.