Rationale and implications of Department of Justice and Federal Trade Commission merger guidelines

¶ … New Guidelines Used by the Department of Justice and the Federal Trade Commission for Evaluating Proposed Mergers.

On August 19, 2010, the U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) produced a modified Horizontal Merger Guidelines (2010 Guidelines). These modified Guidelines outlined changes for mergers in compliance with new American standards and marked the first major changes in laws pertaining to mergers in over 18 years (Arp et al., 2010)

Rationale for these new guidelines was to help the above institutions identify and impede competitively harmful mergers (that may substantially lessen competition) whilst avoiding interference with mergers that are either competitively beneficial or will pose no competitive risk to the marketplace (Federal Trade Commission, 2010). In that manner, the guidelines proposed and delineated techniques and evidence that may be used in order to ascertain whether a merger is potentially risky to marketplace competition.

Many of the proposed changes are products of issues previously mentioned in the Department of Justice and the Federal Trade Commission's Commentary on the Horizontal Merger Guidelines (2006). They have been crafted through a series of public workshops, as well as through numerous public comments submitted by individuals and groups such as attorneys, consumer groups, academics, businesses, and economists.

The 2010 guidelines, revisions to the 1992 guidelines (subsequently amended in 1997), intended to not only expand on the original material but also to offer more clarity on the merger process. Doing so, they hoped, would better assist the business community, particularly, parties involved with mergers and acquisitions (Arp et al., 2010).