FTC Releases Commentary on Horizintal Merger Guidelines

On March 27th, the Federal Trade Commission and the U.S. Department of Justice jointly released a “Commentary on the Horizontal Merger Guidelines” that continues the agencies' ongoing efforts to increase the transparency of their decision-making processes – in this case, with regard to federal antitrust review of “horizontal” mergers between competing firms. The analytical framework and standards used to scrutinize the likely competitive effects of such mergers are embodied in the Horizontal Merger Guidelines, which the agencies jointly issued in 1992, and revised, in part, in 1997. The Commentary, which is available now on both agencies' Web sites, explains how the FTC and DOJ have applied particular Guidelines' principles, in the context of actual merger investigations.
The Commentary contains an introductory chapter that describes the fundamental legal principles that govern the agencies' law enforcement approach to merger analysis, noting that “[t]he core concern of the antitrust laws, including as they pertain to mergers between rivals, is the creation or enhancement of market power.” It follows with an overview of the Guidelines' central focus – the likely competitive effects of mergers – and of the intensively fact-driven nature of merger investigations, as well as the use of evidence in addressing multiple analytical elements within the Guidelines' framework. In separate chapters, the Commentary addresses key Guidelines' elements including market definition and concentration; the potential adverse competitive effects of mergers, including coordinated interaction and unilateral effects; entry conditions; and efficiencies. Throughout the Commentary there are short summaries of actual investigations into proposed mergers that one of the agencies conducted. These cases are included illustratively to enhance understanding of particular points under discussion in the narrative.