Federal Trade Commission Chairman Andrew Ferguson announced to FTC staff on February 18 that the FTC would retain the 2023 Merger Guidelines as the framework for reviewing mergers and acquisitions. Citing the need for stability between presidential administrations, Chairman Ferguson rejected calls to set aside the 2023 Merger Guidelines to draft new ones or reinstate
Days before President Trump’s inauguration, the Federal Trade Commission (FTC) and Antitrust Division of the U.S. Department of Justice (DOJ) replaced their Antitrust Guidance for Human Resources Professionals (“2016 Guidance”), which had been in place since 2016. The Antitrust Guidelines for Business Activities Affecting Workers covers similar ground as the prior guidance, but expands its reach to a few areas emphasized by the Biden Administration. For example, where the 2016 Guidance primarily covered 1) naked agreements between employers not to poach workers or fix wages and 2) information-sharing arrangements between competing employers, the replacement guidance expands its coverage to other areas, including restrictions in the franchise and independent contractor contexts, non-competition agreements, ancillary agreements such as non-disclosure agreements, non-solicitation agreements, liquidated damages provisions, and conduct such as false earnings claims.Continue Reading DOJ and FTC Release Replacement Human Resources Guidelines to an Uncertain Future
The Federal Trade Commission (FTC) secured a record consent penalty of $5.6 million against two merging parties on January 7, 2025 for improper pre-merger coordination, marking the agency’s first gun-jumping action in over a quarter century. Verdun Oil Company and XCL Resources Holdings had agreed to acquire EP Energy LLC in a transaction requiring prior notification to the FTC and the U.S. Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”). In the substantive antitrust investigation that followed the parties’ HSR Act notifications, the FTC secured a commitment for Verdun and XCL to divest assets as a condition of FTC approval for the transaction. The FTC also discovered that the parties had violated the HSR Act.Continue Reading FTC Secures Record Gun-Jumping Penalty in a Case with Several Lessons for Merging Parties
On November 12, 2024, the Antitrust Division of the United States Department of Justice (DOJ) published updated guidance for its Evaluation of Corporate Compliance Programs in Antitrust Investigations. First published in 2019, the DOJ has updated its guidance several times since. The guidance is intended to educate the public and to guide prosecutors in making charging decisions and sentencing recommendations for criminal antitrust violations. Continue Reading Takeaways from the Department of Justice’s November 2024 Corporate Compliance Program Guidelines
On May 9, 2024, the Department of Justice (“DOJ”) announced the formation of the Antitrust Division’s Task Force on Health Care Monopolies and Collusion (“HCMC”). The HCMC “will guide the division’s enforcement strategy and policy approach in health care, including by facilitating policy advocacy, investigations and, where warranted, civil and criminal enforcement in health care markets.” Continue Reading DOJ Focus on Health Care Marches Forward with Formation of Task Force
With the advent of messaging apps such as Slack, Microsoft Teams, and Signal, the ways in which employees are able to communicate and collaborate with each other are rapidly expanding. At the same time, companies have increased use of document collaboration platforms such as Microsoft SharePoint and eRooms to supplement or replace traditional closed-system document management systems. Message and document retention within these platforms is uneven and, in some cases (such as in the popular messaging app SnapChat), speedy message erasure is not a bug, but a feature. On Friday, January 26, the Federal Trade Commission (“FTC”) and Department of Justice Antitrust Division (“DOJ”) announced that the two agencies are updating the standard preservation obligation guidance to keep pace with the expanded use of collaboration tools that do not otherwise prioritize message retention.Continue Reading FTC and DOJ Update Preservation Obligation Guidance
On Monday December 18, the Federal Trade Commission (“FTC”) and the Department of Justice (“DOJ”) released the final version of their Merger Guidelines (“Guidelines”), capping a nearly two-year effort to implement a policy capturing the Biden Administration’s aggressive enforcement stance in merger reviews. The Guidelines are intended to provide transparency into how the agencies evaluate whether a merger or acquisition may lessen competition in violation of the Clayton Act. After the agencies released the draft merger guidelines in July (“Draft Guidelines”), the agencies received over 3,000 public comments, many of them criticizing the Draft Guidelines for being too aggressive and departing too radically from controlling case law and practice. The final Guidelines reflect the agencies’ consideration of the comments received.
While the final Guidelines largely maintain the same aggressive positions of the draft, they introduce more nuanced language that signals more openness to rebuttal evidence than the Draft Guidelines. The most apparent change is an across-the-board shift away from a flat prohibition on certain effects and toward a more traditional warning about the possible consequences when those effects are present. This is an important change to the draft language, which had come under fire for appearing to set forth several rules of per se illegality. For example, in Guideline 2, the draft language stated that “mergers should not eliminate substantial competition between firms,” (emphasis added), signaling the possibility that the agencies would challenge any merger between rivals even when remaining competitors would discipline any post-merger attempt to raise prices or reduce output or quality. In contrast, the final language states that “mergers can violate the law when they eliminate substantial competition between firms” (emphasis added), affirming what has always been the case.Continue Reading FTC and DOJ Publish 2023 Merger Guidelines
On November 13, 2023, the DOJ Antitrust Division moved to dismiss its last remaining no-poach indictment. In 2021, a Texas grand jury indicted Surgical Care Affiliates (“SCA”) and a related company for conspiring with competitors not to solicit each other’s senior-level employees. While a motion to dismiss was pending in that case, a district court in Connecticut entered a judgment of acquittal (“JOA”) on labor market allocation charges brought against several engineering firms, ruling in United States v. Patel that, among other things, ample evidence of employees moving between the defendant companies meant that any conspiracy to restrict such movement could have had no “meaningful” effect on competition and was not illegal per se. Continue Reading An Uncertain Future for DOJ’s No-Poach Prosecutions
The Antitrust Division of the U.S. Department of Justice (“DOJ”) announced on August 16 that two directors of Pinterest Inc. and Nextdoor Holdings Inc. have resigned in response to an investigation into whether the corporations shared directors in violation of Section 8 of the Clayton Act, 15 U.S.C. § 19. Section 8 prohibits director and
On July 19, 2023, the Federal Trade Commission (FTC) and Department of Justice (DOJ) released for comment proposed joint merger guidelines which seek to replace the agencies’ vertical merger guidelines released in 2020 and horizontal merger guidelines released in 2010. The proposals introduce significant changes to both the ways in which the agencies define markets and competition, and the evidence and metrics they would use to assess a merger’s competitive effects.
Among the more significant proposed changes are the following:
They would materially change how relevant geographic and product markets are defined, and when to consider those markets “highly concentrated.”
Market definition: The proposals would significantly change how product and geographic markets within which competitive effects of a merger would be defined. Under current law, to define the boundaries of relevant product and geographic markets, the agencies apply the “hypothetical monopolist test,” in which firms or products that would prevent the merged firm from increasing price by a small but significant and non-transitory amount are considered to be within the “relevant market.” The agencies propose to include in this calculus not only price but other “terms” such as “quality, service, capacity investment, choice of product variety or features, or innovative effort,” raising the possibility that the agencies may exclude from the market rivals who could discipline overt attempts to increase price but not more opaque reductions in service, quality, or R&D efforts, to which consumers may be much less sensitive.
Market concentration: The current guidelines recognize that the anticompetitive effects of a merger generally increase in more concentrated markets in which fewer significant firms compete. The proposed guidelines would lower the standard for a “highly concentrated market” (a trigger for a presumption of a merger’s illegality) to a level that the current guidelines consider to be only a “moderately concentrated market.” In addition, the proposals would introduce a market share-based test as a trigger for raising an “impermissible threat of undue concentration,” when the merged firm’s market share will exceed 30 percent and concentration would increase modestly.Continue Reading DOJ and FTC Propose Draft Revised Merger Guidelines