New FTC And DOJ Guidelines Signal Greater Scrutiny Of Proposed Mergers

The Joe Biden-era Federal Trade Commission and the Justice Department have a mixed record in the courts when it comes to fighting mergers, but proposed new guidelines signal a continued effort to slow or block corporate consolidation.

FTC Chairwoman Lina Khan and DOJ antitrust chief Jonathan Kanter are expected to be at the White House on Wednesday as President Joe Biden unveiled the proposals as part of a series of steps to boost competition.

The draft guidelines are not new laws, but are policies for how the FTC and the DOJ evaluate proposed mergers. A senior administration official said that they were updating “our framework to match market realities,” noting that “we’ve seen all too often blind spots that led to missed opportunities” and led to greater corporate concentration.

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Included in the 13 proposed guidelines unveiled on Wednesday was one aimed at tech platforms: “When a merger involved a multi-sided platform, the agencies examine competition between platforms, on a platform, or to displace a platform.”

Other proposals would be to evaluate mergers on whether they would “entrench or extend a dominant position,” and whether they would “further a trend toward consolidation.”

Another guideline would be to examine the competitive impact of multiple acquisitions, while another is aimed at the impact of mergers on the workforce.

The proposed guidelines take a more expansive view of enforcement, amid an ongoing debate over whether the longtime regulatory focus on whether a merger harms consumers failed to stop the massive growth of tech platforms. Lawmakers have decried the power of platforms such as Amazon, Meta and Google, yet major legislation to curb their growth or even break them up has stalled in Congress.

In their 13 guidelines, the FTC and DOJ cited legal precedents in an effort to make the point that the changes are grounded in existing merger laws. The FTC recently suffered a setback in its efforts to block the proposed merger of Microsoft and Activision, as a federal judge last week rejected the agency’s arguments against it. That decision is under appeal.

Lina Khan, the chairwoman of the FTC, said in a statement that the guidelines “contain critical updates while ensuring fidelity to the mandate Congress has given us and the legal precedent on the books.”

One of Khan’s first major merger reviews was Amazon’s purchase of MGM. The FTC opened an investigation into the deal, but ultimately did not try to block it. Antitrust hardliners, including Sen. Elizabeth Warren (D-MA), had urged the FTC to take a broad approach in examining the deal, including how it would enhance Amazon’s dominance in the marketplace.

The Biden administration has been particularly aggressive about examining how transactions impact labor markets. The Justice Department rooted its lawsuit to block Penguin Random House’s merger with Simon & Schuster on the effect that it would have on author advances. A federal judge ultimately sided with the government, and the proposed deal was abandoned.

The guidelines now will go through a public review process before they are finalized.

They guidelines are:

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