Antitrust: The FTC Knows If You’ve Been Bad or Good. . .
I never thought that the FTC had anything in common with Santa Claus until I read this recent bit of guidance from the Bureau of Competition. It turns out that, like Ol’ Saint Nick, the FTC knows if you’ve been bad or good — and they take it into account when conducting a merger review:
The FTC’s Bureau of Competition sometimes reviews proposed mergers against the backdrop of civil and criminal antitrust investigations or litigations leveled in the same industry. And at times, such investigations and litigations are leveled against the merger parties themselves. Those ongoing matters may affect our analysis of a merger, as well as the vetting of divestiture packages and proposed divestiture buyers. Even if details of such investigations are not public, Bureau staff are likely to discover their existence during our own investigation of a merger.
To be clear: an ongoing government or private antitrust probe involving the companies or the industry does not necessarily signal that a merger is anticompetitive. Still, such probes may be relevant to the Bureau’s analysis of the merger. Concurrent investigations or litigations regarding party conduct may undermine parties’ arguments about the adequacy of the number of players in the market, the possibility of tacit coordination, or a party’s market position or lack of monopoly power. While the Bureau does not take as proven an allegation that one of the parties has violated the antitrust laws, we cannot ignore such allegations, either.
The FTC highlights the fact that companies and individuals facing criminal probes or civil antitrust claims alleging collusion or coordinated behavior are likely to face heightened scrutiny during the merger review process. It points out that this scrutiny is consistent with both Section 7.2 of the Horizontal Merger Guidelines and relevant case law. The same concerns also may come into play when the FTC vets buyers in connection with proposed divestitures.
-John Jenkins, DealLawyers.com August 6, 2020
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