2010 Horizontal Merger Guidelines: Changes in Policy, Transparency, & Predictability
James Langenfeld, Oct 28, 2010
The Federal Trade Commission ("FTC") and the Department of Justice ("DOJ") issued revised Horizontal Merger Guidelines ("HMGs") on August 19, 2010. The HMGs resulted from a process that obtained comments about revising the 1992 Horizontal Merger Guidelines (1992 HMGs), held workshops, issued proposed HMGs, and received comments on the proposed HMGs before finalization. The stated purposes of the HMGs are:
[to] describe the principal analytical techniques and the main types of evidence on which the Agencies usually rely to predict whether a horizontal merger may substantially lessen competition[,] . . . to assist the business community and antitrust practitioners by increasing the transparency of the analytical process underlying the Agencies' enforcement decisions[, and to] assist the courts in developing an appropriate framework for interpreting and applying the antitrust laws in the horizontal merger context.
This article discusses how well the HMGs achieve the first two of these goals, and offers some thoughts related to third. First, the HMGs change the landscape for evaluating mergers in several potentially important ways, at least compared to the 1992 HMGs and many typical past practices. These changes in part reflect Agency practices since the 1992 HMGs, and in part reflect an increased emphasis on certain types of analysis and reduced emphasis on others. Second, the HMGs offer many more details of the analyses and types of evidence considered by the Agencies, and in this way may help practitioners and the business community understand merger review by "increasing the transparency." At the same time, however, the HMGs may reduce the predictability of merger review by removing most of the simple benchmarks and not providing benchmarks for the newly described analyses. Third, it remains to be seen whether the courts will give the HMGs and their new analyses as much (or more) weight as they have given the 1992 HMGs.
The following section discusses the related, but distinct, concepts of transparency and predictability. The next section summarizes some of the major changes in the HMGs from the 1992 HMGs, followed by a section that describes the HMGs' elimination of many benchmarks, sections that discuss many of the specific analytic techniques in the HMGS, and a section the potential impact of the HMGs on the courts.