Revamping the Rules
The business world is buzzing after the Federal Trade Commission (FTC) and the Department of Justice (DOJ) unveiled fresh draft guidelines on how they plan to scrutinize mergers. This recent revelation marks a shift in policy towards a more comprehensive evaluation of these corporate unions.
The new draft revolves around a 13-point checklist that the agencies plan to utilize to determine whether a potential merger gets the green or red light. This framework not only applies to parallel (horizontal) mergers but also extends to the less-talked-about vertical mergers.
The public has until September 18 to weigh in on these draft guidelines before they’re up for final review.
Refocusing the Lens
The FTC, led by Chair Lina Khan, has made aggressive strides to thwart further expansion by Big Tech companies. At the same time, the DOJ’s Antitrust Division, with Assistant Attorney General Jonathan Kanter at the helm, has also ramped up its activity.
The new proposed guidelines emphasize the importance of evaluating a deal’s impact on competition for workers and how a series of acquisitions, rather than one-offs, could potentially disrupt market health. The FTC and DOJ are working to adapt the traditional merger-evaluation criteria to the evolving digital economy.
The Consumer Compass
With these new guidelines, the agencies appear to be moving away from the established “consumer welfare standard,” a principle that historically guided regulators to prioritize outcomes that offer maximum consumer benefits. Instead, they have adopted a broader rule around what constitutes “unfair methods of competition.”
Critics have expressed concerns that this shift could reduce the focus on consumer benefits. The new approach, however, aims to promote a more competitive market, which could lead to more choices and better prices for consumers.
Ultimately, proponents of this new approach hope this change will achieve balanced growth and innovation.
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