Hill Wellford, Gregory Wells, Oct 28, 2010
The new Horizontal Merger Guidelines, issued by the U.S. antitrust Agencies on August 19, 2010, mark a clear change from their 1992 predecessor.They reduce the importance of traditional market definition, increase Herfindahl-Hirschman Index (“HHI”) thresholds, and expand the types of evidence considered. Most commentary to date has focused on the fact that the new Guidelines largely codify hitherto-unofficial (although widely known) practices of Agency staff, and this is true, with some key exceptions. But such commentary suggests a no-big-deal view of the new Guidelines that misses something important.
The big development of the new Guidelines is that, read as a whole, they embrace three trends with the potential to make merger work significantly longer and less predictable. Those trends are (1) the pursuit of economic-analytical perfection; (2) the identification of ever-smaller groups of customers that might be subject to a discrete, unquantifiable, or even speculative harm; and (3) an indifference to the growing divergence between merger advocacy before the Agencies and merger litigation before the courts. If these trends continue, the 2010 Guidelines will turn out to be a big deal indeed.
The Agencies’ stated goal for the new Guidelines is to increase “clarity and transparency, and provide business with … greater understanding of how we review transactions.” This statement is more complex and controversial than it might